On November 8, 2018, the CCI dismissed allegations of contravention of Section 3 of the Act filed by Shri Nadie Jauhari (‘Informant’) against Retail & Dispensing Chemists Association (‘RDCA’).[1] The allegations were with respect to the collection of Product Information Service (‘PIS’) charges by the RDCA from the manufacturers of pharmaceutical products. PIS is a fee charged by chemists and druggists associations for advertising a new product/drug of a pharmaceutical company in the publications of such associations. In this regard, CCI had issued a public notice in 2014, calling trade associations to cease and desist from inter alia compulsory payment of PIS charges by pharmaceutical firms.

In assessing the allegation of the Informant, CCI was of the view that the decisive factor for holding a PIS charge as anti-competitive is the nature of such a charge, that is, if the PIS charge is mandatory (in the sense that absence of payment will lead to the new drugs not being introduced in the market), the practice will be found to be anti-competitive. However, an independent decision of manufacturers/ pharmaceutical companies to avail the PIS charge on a voluntary basis makes it fall outside the purview of the Act.

CCI examined the responses of various pharmaceutical companies, which indicated that the companies found the RDCA’s publications useful in spreading awareness on their new products. Moreover, none of the companies indicated that the PIS charge was forced by the RDCA in any manner. Therefore, since the PIS charge met the test of voluntariness, CCI concluded that it was not anti-competitive under the Act.

[1] Case No. 60 of 2015.