On June 12, 2018, CCI passed an order under Section 27 of the Act imposing penalties on certain chemists and druggists in Gujarat, and pharmaceutical companies for mandating a No-Objection Certificate (‘NOC’) to be obtained by dealers and distributors from local chemists and druggists associations as a prerequisite to undertake business activities [1].In its investigation, the DG found that sub-clause (a) of Clause 28 of the Drugs (Price Control) Order, 2013 created an obligation on a pharmaceutical company/ distributor to sell drugs unless there was a ‘good and sufficient reason’ to refuse sale. On the basis of the responses and documentary evidences furnished by the pharmaceutical companies during the investigation, the DG noted some of the pharmaceutical companies and their clearing and forwarding (‘C&F’) agents did not fall foul of the provisions of the Act, as the refusal for not granting NOC was justified.CCI observed that the practice of mandating NOCs from stockists prior to their appointment resulted in limiting drug supply in the market, a contravention of Section 3(3)(b) read with Section 3(1) of the Competition Act. Moreover, the parties were not able to provide any evidence to establish any benefits in the distribution channel on account of the NOC requirement. In light of above, CCI concluded that such practice amounted to an anti-competitive agreement under the provisions of the Competition Act, and imposed a penalty of ₹ 0.9 million on Federation of Gujarat State Chemists and Druggists Associations, ₹ 0.1 million on Amdavad Chemists Association, ₹ 0.1 million on Surat Chemists and Druggists Association, and ₹ 0.6 million on Chemists and Druggists Association of Baroda (calculated at the rate of 10% of the income recorded in the financial years from 2011 to 2016). Penalty was imposed at the same rate on the individual office-bearers of these associations as well. CCI also imposed penalty to the tune of 1% of the total average income as recorded in the financial years between 2013 and 2016 on Glenmark Pharmaceutical Limited (₹ 450 million), B.M. Thakkar & Co. (₹ 0.02 million), and Divine Savior Private Limited (₹ 0.5 million), and their individual office bearers.[1]Cases 65 of 2014, 71 of 2014, 72 of 2014 & 68 of 2015.