On October 14, 2022, the CCI dismissed a complaint filed by one Mr. Pinesh S. Doriwala (‘Informant’) against Sanofi India Limited (‘Sanofi’) alleging anti-competitive conduct in contravention of Section 3(4)(d) of the Competition Act.^[1]

The Informant is a partner in Shri Shriman Narayan Rahat Dava Centre (‘SSNRDC’), a firm that deals in pharmaceutical products at a special discount rate of 20%-35% of the Maximum Retail Price (‘MRP’) for Indian Army, senior citizens, disabled individuals and NRIs and others. SSNRDC delivers pharmaceutical products at doorsteps without any advance payment.

Sanofi is primarily engaged in the business of manufacturing and trading of pharmaceutical products of leading brands in therapeutic uses for diabetes, cardiology, thrombosis, antihistamines, and central nervous system to the consumers in India.

The Informant contended that SSNRDS requested Sanofi to supply some pharmaceutical products at wholesale prices. Sanofi refused to supply to SSNRDC and asked SSNRDC to contact its existing distributors. The Informant alleged that Sanofi indulged in refusal to deal with SSNRDC, and even though Sanofi asked SSNRDC to contact its distributors, there exist a de facto vertical agreement between Sanofi and its distributors which restricts them to sell Sanofi’s products as a wholesale price to SSNRDC (constructive refusal to deal). SSNRDC averred that its ability to give higher discounts to the consumers was hampered due to Sanofi’s constructive refusal to deal with them which will ultimately cost the consumers as it will not squeeze profit margins of wholesalers and retailers.

The CCI observed that in cases of refusal to deal, the same should be manifested to have or likely to have AAEC in the market, to be held to be anti-competitive. The CCI held that the Informant failed to demonstrate that Sanofi’s refusal to deal with SSNRDC caused AAEC or was likely to cause AAEC in the market, except for the Informant getting lesser margins. Moreover, the drugs that SSNRDC wished to purchase from Sanofi appeared to have generics/substitutes in the market which are sold by other manufacturers and the Informant was not foreclosed absolutely in dealing in such products. The CCI ultimately observed that manufacturers have some autonomy to deal with their goods the way they want and there is no absolute right to deal with a particular business.

Therefore, the CCI dismissed the allegations.

[1] Case No. 31 of 2022.