The life sciences and pharmaceutical industry in India is of great significance globally as well as domestically, being the third largest (by volume) in the world. In addition to supplying more than half of the global vaccine demand, Indian pharmaceutical companies also supply around 40 per cent of the US demand for generics and around 25 per cent of all medicines consumed in the UK.^[2] It is, therefore, clear why the sector has been a priority for the Competition Commission of India (CCI), with various policy initiatives, advocacy efforts and enforcement to identify and address potential competition concerns in the industry.

The CCI has already issued orders in about 71 cases in this sector alone in its 15 years of enforcement of the law; more than 24 orders have resulted in findings of contravention and the imposition of heavy penalties. Most of these cases relate to the traditional anticompetitive practices of trade associations and their members, with some cases relating to hospitals. The CCI is expected to continue its enforcement action to ensure a competitive market and protect consumer interests, especially with regard to the recent enhanced penal and investigate powers reinstated in the Competition Act, 2002 (the Competition Act).

The CCI has also been supportive of deal-making activity in the country, having reviewed more than 65 transactions in the sector, and requiring divestments in only a single transaction consolidating two of the largest drug manufacturers in India. Keeping a close watch on any resultant anticompetitive effects of a transaction, the CCI identified concerns rising out of common ownership, requiring modifications by parties in two transactions. With the newly introduced ‘deal value’ thresholds, the CCI now has the ability to identify ‘killer acquisitions’ in the sector.

For background, a brief overview of the relevant regulatory framework governing the Indian healthcare sector is set out below.

Regulatory framework

The life sciences and pharmaceutical industry in India is heavily regulated, with a robust framework established to ensure the safety, efficacy and quality of drugs. The Drugs and Cosmetics Act, 1940 (DCA) and the rules framed thereunder, including the Drugs and Cosmetics Rules, 1945 (DCR) and the New Drugs and Clinical Trial Rules, 2019 (the CT Rules) form the primary governance framework for the industry. The DCA regulates medicines that are meant for internal and external use including substances, components of drugs and medical devices used for the diagnosis, treatment or prevention of disease.^[3] The DCA’s ambit includes the entire life cycle of pharmaceutical products including the drug approval processes, clinical trials, manufacturing practices, distribution and sale of drugs. Under the DCR, specific quality standards and marketing, prescription and sales restrictions are outlined for drugs. Under the Medical Device Rules, medical devices are categorised into one of four classes on the basis of increasing risk from Class A to Class D, with the regulatory compliance requirements being the most stringent for Class D devices. A broad overview of the applicable regulatory framework for the manufacturing, pricing and marketing of pharmaceutical products is set out below.

Manufacturing

Licensing of both the premises and the drug that has to be manufactured is a prerequisite to manufacturing any drug in India. ‘Manufacturing’ is defined comprehensively under the DCA to include any process (or part) for making, altering, ornamenting, finishing, packing, labelling, breaking up or otherwise treating or adopting any drug with a view to selling or distributing it. The manufacturer is also required to conduct clinical trials if it is dealing with a new drug (i.e., a drug that has not been used in India to any significant extent and has not been approved by the central licensing authority).^[4] Once granted, these manufacturing licences are evergreen and only require payment of a retention fee every five years. Manufacturers must comply with ‘good manufacturing practices’ prescribed under the DCR to ensure that the drugs meet international quality standards.

Pricing regulations

Drug prices in India are regulated by the Drug Price Control Order 2013 (DPCO), issued under the Essential Commodities Act, 1955. Medicines that satisfy the priority healthcare needs of majority of the population are brought within price control regulations by being included in the National List of Essential Medicines (NLEM).^[5] The prices of drugs included in the NLEM are regulated by the National Pharmaceutical Pricing Authority (NPPA) as per the provisions of the DPCO, by fixing ceiling prices for the drugs. The pricing of other drugs is left to market forces and only monitored by the NPPA to ensure that the annual increase in their maximum retail price is no more than 10 per cent. Moreover, drugs used to treat rare diseases and patented drugs are not immediately subject to price control, with patented drugs entitled to a five-year exemption from the date of marketing.

Marketing and labelling

Given the sensitive nature of this industry, marketers of drugs also have stringent obligations placed upon them to ensure that drugs sold in the Indian market meet specified safety and quality standards. Under the DCR, the manufacturer and the marketer of the drug share liability for the quality of the drug and other regulatory compliances. Labelling and branding of drugs is also regulated by the DCR, with each product required to be labelled according to specifications for its particular drug category, setting out details such as net contents, ingredients, manufacturer name, expiry date, potency and warnings.

Advertisement and sales promotion

Advertising, promotion and sale of drugs is primarily regulated by the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 (DMRA), which seeks to prohibit advertisements that are false, misleading or relate to drugs and remedies that claim to possess magical qualities. Apart from the DMRA, marketing practices in the pharmaceutical industry are also governed by the Uniform Code for Pharmaceutical Marketing Practices, 2024 (UCPMP), which is a self-regulatory code notified by the Department of Pharmaceuticals to discourage unethical marketing practices such as providing gifts, hospitality or incentives to doctors to influence their prescription decisions. However, the government is expected to adopt a stricter approach towards implementation of the UCPMP to ensure compliance by pharmaceutical companies. Recently, the government also notified a uniform code to regulate marketing practices in the medical device industry mandating all medical device associations to ensure that promotion of medical devices is not undertaken until the distribution of the product is approved by the regulatory authority.

Upcoming legislation

In 2022, the Indian government released a draft Drugs, Medical Devices and Cosmetics Bill, 2022, which seeks to revamp the existing DCA to address evolving practices and technological advancements and serve as comprehensive legislation regulating drugs, medical devices, cosmetics, clinical trials and online pharmacies. Currently, it is unclear when the proposed bill will be enacted and in what form.

CCI and the life sciences sector

Market studies and advocacy

Taking a keen interest in ensuring competitive markets in the pharmaceutical and life sciences sector, the CCI conducted several market studies to assess the state of competition. This was followed by press releases and advertisements in leading daily newspapers (to explain what amounts to anticompetitive conduct in the industry) and policy notes advocating reforms in the sector. Some of the more impactful efforts are described below.

• In July 2010, the CCI commissioned a study titled ‘Competition Law and Indian Pharmaceutical Industry’. The study concluded that there was limited price competition among retailers in the pharmaceuticals industry, owing to the various problems that plague the supply chain, such as information asymmetry between patients and doctors and strong preference for innovator brands.
• In February 2014, the CCI issued a press release directing trade associations of chemists and druggists (distributors of pharmaceutical products) across India to cease and desist from various anticompetitive practices. These practices included the issuance of no objection certificates (NOCs) as a precondition for appointment of stockists, compulsory payment of product information service (PIS) charges by pharmaceutical companies for release of new products, the fixing of trade margins by the associations and the boycott of enterprises not following the directions of the associations.
• In October 2018, the CCI issued a policy note titled ‘Making Markets Work for Affordable Healthcare’. The issues highlighted in the note included the lack of transparency in the pricing of drugs and medical devices; significant mark-ups by intermediaries; and the influence of pharmaceutical companies over prescribing practices of doctors. Asymmetric information between healthcare providers and patients has led to inefficiencies and higher costs in the market; therefore, the CCI advocated for generic drug prescriptions by doctors, promotion of e-pharmacies and encouraging consumers to buy pharmaceutical products in the open market rather than from the in-house pharmacies of hospitals.
• In October 2020, the CCI launched a market study focused on the supply chain of pharmaceutical products. The report, published in November 2021, elaborated on the competition issues highlighted in the policy note released in 2018 (see above). The CCI observed that the market was largely dominated by ‘branded generics’ (i.e., generics manufactured by major pharmaceutical companies). The CCI also noted that these branded generics were pushed into the market by providing healthy trade margins to the distributors. Further, customers also preferred paying a premium for such branded generics. The CCI also reiterated its concerns about the practices of the trade associations and urged them to adopt effective competition compliance programmes.

These efforts of the CCI are inextricably linked and run parallel to its enforcement and merger regulation in the sector. Indeed, the knowledge gained from the above studies was instrumental in informing the regulator of industry issues while examining cases.

Dealmaking in life sciences

Given the extent of manufacturing in India, along with the presence of a large domestic population and proportionately large healthcare system to support it, the CCI has been very active in regulating transactions in the pharmaceutical and life sciences sector. The merger control regime in India is mandatory in nature, in other words, transactions that meet the thresholds and are not exempt from notification must be notified to the CCI for its prior approval. The Competition Act prescribes eight alternate jurisdictional thresholds (and a de minimis exemption) based on the financials of the parties to a transaction. A new threshold for ‘deal value’ has now been introduced: transactions with a deal value of over 20 billion rupees also need to be notified to the CCI, subject to the target having ‘substantial business operations’ in India.

Typically, the CCI clears no-issues transactions within the Phase I review period, although it can initiate a Phase II investigation for problematic transactions. The CCI must form its prima facie opinion on the potential competition concerns arising from a transaction within 30 calendar days of its notification.^[6]

So far, there has only been a focus on the traditional theories of harm on consolidation of market power and foreclosure. The first Phase II investigation in the Indian competition law regime was launched in the life sciences sector: the consolidation of two of the largest Indian pharmaceutical companies (Sun/Ranbaxy). In addition, the CCI has evaluated issues of information exchange and collusion through common ownership and interlocking directors. The introduction of the deal value threshold is expected to significantly increase the remit of the CCI, with high-value transactions in the pharmaceutical sector that may have otherwise benefited from the de minimis exemption (due to low turnover) now requiring competition review.

Assessment of relevant market

The pharmaceutical drug supply chain comprises intermediates, active pharmaceutical ingredients (APIs) and finished dosage form products (FDFs). Intermediates are the chemical compounds that serve as the building block for APIs; APIs are the key or primary molecules used in the making of any drug, which are then used as a primary ingredient to manufacture FDFs consumed by customers.^[7]

For relevant market delineation, the CCI relies upon the IQVIA-IMS India database, which adopts the European Pharmaceutical Marketing Research Association’s anatomical therapeutic chemical (ATC) classification of medicines. The ATC system denotes a hierarchical and coded four-level system that categorises medicinal products based on the anatomical and therapeutic main and subgroups.^[8] Typically, the CCI assesses relevant market delineation at both the ATC-3 level (therapeutic indications) and ATC-4 level (chemical, pharmacological, therapeutic subgroups). However, in cases with significant overlaps such as in Sun/Ranbaxy, the CCI may evaluate the relevant markets even at the molecular level.

Separately, it has been clarified that Ayurvedic^[9] medicines are not direct substitutes of allopathic medicines, and therefore constitute a separate, distinct relevant market.^[10]

Remedies for transactions in the life sciences sector

The CCI’s keen scrutiny of transactions in the life sciences sector has resulted in several conditional approval orders. In Sun/Ranbaxy, the CCI initiated its first Phase II investigation, noting that the merger of two of the largest pharmaceutical companies in India could result in substantial anticompetitive effects in several FDF markets. Based on a review of the market shares of the combining parties and their competitors, seven FDF product markets were identified where the parties had significantly high market shares (in some markets as high as 90–95 per cent); the parties were directed to divest those FDFs to a competitor.

In Abbott Laboratories/St Jude Medical, the CCI identified consolidation concerns regarding small-hole vascular closure devices (VCDs) as the parties had a combined market share of 90–100 per cent in the relevant market for small-hole VCDs in India. The parties voluntarily submitted a (global) remedy proposing the sale of St Jude Medical’s small-hole VCD business to the Terumo Corporation, Japan (Terumo) on a worldwide basis, which was accepted by the CCI while observing the expertise of Terumo and its well-developed cardiovascular marketing and sales team in India.

Separately, in Canary Investment/Link Investment II,^[11] the CCI analysed the potential concerns arising out of common ownership and interlocking directorships in competing pharmaceutical entities. The combination involved ChrysCapital’s proposed acquisition of an additional minority shareholding (along with board representation and affirmative veto rights) in Intas, a leading Indian pharmaceuticals manufacturer. The CCI noted that ChrysCapital already held similar rights (to influence business affairs and management) in other pharmaceutical companies (such as Mankind), which could potentially lead to anticompetitive outcomes. Accordingly, ChrysCapital offered certain voluntary modifications such as the removal of its director from the board of Mankind, a commitment to not exercise certain veto rights in Mankind and a restriction on the use of information obtained from such pharmaceutical companies. Similar voluntary remedies were accepted in Northern TK Ventures Pte Ltd/Fortis Healthcare Limited,^[12] where the CCI had identified information exchange concerns arising out of Northern TK Venture’s structural links with two competing national hospital chains.

Investigations of anticompetitive behaviour in the sector

Under the Competition Act, agreements among competitors (cartels) regarding price-fixing, market sharing, bid rigging, etc, are presumed to cause an appreciable adverse effect on competition (AAEC). Pursuant to changes under the Competition (Amendment) Act, 2023, ‘hubs’ to a cartel can also now be held guilty of collusion. On the other hand, agreements for supply, distribution and marketing are not presumed to cause an AAEC and their anticompetitive nature must be proved by the CCI to establish a contravention. Further, agreements that are not strictly horizontal or vertical in nature can also be proceeded against, subject to the CCI proving their anticompetitive effects in the market. The Competition Act also prohibits abuse of dominant position by an enterprise. Establishing abuse of dominance requires an effects analysis, which includes assessing whether the conduct adversely affects competition without any objective justification.^[13]

The penal and investigative powers of the CCI have also been enhanced recently, allowing penalties up to 10 per cent of the average global turnover of the erring parties for the preceding three financial years.^[14] This is a significant revision of the penal powers that were previously watered down by the Supreme Court of India in 2019, whereby a maximum penalty of only 10 per cent of the average relevant turnover (i.e., based solely on the turnover derived from the business or product relating to the parties’ contravention) could be imposed.^[15] Additionally, the CCI may impose fines on individuals responsible for anticompetitive conduct. Further, the Office of the Director General (the DG Office) is now empowered to retain documents, information, books, papers, etc, seized by it for a period of up to 360 days. The investigation arm of the CCI is also empowered to examine third parties and agents under oath (only those professionals that are employed by the parties), as well as to seek the assistance of police officers when conducting dawn raids.

To offer some respite to erring parties, settlement and commitment procedures have been introduced to the CCI’s enforcement toolkit. Parties under the CCI’s inquiry (except for cartel conduct) may propose to enter into a settlement or offer commitments (as applicable) to close the inquiry. Parties under investigation by the DG Office may propose commitments to remedy their behaviour under scrutiny. There would be no finding of guilt or imposition of penalties upon such parties. Further, where the DG Office has already submitted its investigation report to the CCI, parties can propose a settlement in exchange for a reduction of up to 15 per cent in their penalty. They may also propose some behavioural modifications to address their conduct. A finding of guilt would be determined by the CCI on a case-by-case basis. These mechanisms are welcome as they aim to improve administrative efficiency and reduce litigation costs. Separately, the CCI also overhauled its leniency regime to further strengthen its enforcement against cartels. Leniency applications under a cartel investigation can now benefit from additional penalty reductions (in both existing and new cartel investigations) by disclosing new cartel conduct to the CCI.

As mentioned earlier in this chapter, the CCI’s enforcement in the life sciences sector has largely focused on anticompetitive practices in the distribution market, with the majority of orders pertaining to the conduct of associations for chemists and druggists. Public procurement of pharmaceutical products has also been an area of focus for the regulator in India. The CCI has launched investigations against hospitals for the imposition of unfair terms upon patients and excessive pricing in hospital aftermarkets. The CCI has also reviewed complaints on abusive patent conduct, although in light of a Delhi High Court judgment, the jurisdiction to review such conduct is currently being debated.

Regulating anticompetitive distribution practices

As mentioned above, the CCI has made significant attempts to regulate the stranglehold of associations of chemists and druggists in the distribution of pharmaceutical products in India. To date, there have been around 24 orders pertaining to the conduct of such associations and it is understood that several inquiries are pending.

One of the first enforcement actions in this regard was against the All India Organisation of Chemists and Druggists (AIOCD), the national body for state-level trade associations.^[16] The CCI noted that AIOCD required pharmaceutical companies to seek its approval before appointing new distributors, with evidence showing that stockists without NOCs were denied access to pharmaceutical products. The CCI’s investigative arm, the DG Office, found that pharmaceutical companies often complied with such demands to avoid boycotts and disruptions in the supply chain. In addition, the DG Office found that pharmaceutical companies were also compelled to pay PIS charges. A penalty of 4.7 million rupees was imposed on AIOCD although this was perhaps not high enough to have the requisite deterrent effect. Directions to cease and desist from such practices were also issued by the CCI, including a specific direction to issue circulars to the state and local associations and pharmaceutical companies to clarify that PIS charges were not mandatory.

Despite the CCI’s efforts in a string of cases against such associations, these practices continued unabated at state and local level for many years. Penalties were also imposed on office bearers in their individual capacity to deter such anticompetitive conduct; however, none of these enforcement actions seemed to impact the practices in the market. This, perhaps, led to the CCI also taking enforcement action against pharmaceutical companies because of their role in enabling the behaviour of the trade associations.^[17] Interestingly, enforcement action against the pharmaceutical companies has perhaps led to the desired outcome, with no new investigations launched against trade associations and pharmaceutical companies in the past few years.^[18] In fact, in 2023, the CCI dismissed a complaint filed against Lupin Ltd and Dr Reddy’s Laboratories for similar NOC requirements, for lack of evidence.^[19] This is perhaps an indication that the pharmaceutical companies have indeed made efforts to comply with and take into account the CCI’s intense enforcement and advocacy efforts in the distribution market.^[20]

Punishing bid rigging and cartel conduct

Public procurement accounts for over 30 per cent of the GDP of India^[21] and is typically undertaken through tenders. Given that public procurement is undertaken at the taxpayers’ expense, the CCI has come down heavily on bid rigging and bid rotation among market players for such tenders. Evidently, this remains true for the life sciences sector as well.

In Biomed/GSK-Sanofi,^[22] the CCI examined allegations of bid rigging by two leading multinational pharmaceutical companies, GSK and Sanofi, for the public tender of the meningitis vaccine supplied to Haj pilgrims from India. The complainant, a rival indigenous manufacturer of the vaccine inter alia alleged that GSK and Sanofi divided the tender supplies among themselves through bid rotations and coordinated price strategies. While relying on purely circumstantial evidence, the CCI rejected the claims of the parties that their respective bids were based on individual business considerations such as supply constraints and production timelines. The CCI imposed a penalty of 604 million rupees on GSK and 30.4 million rupees on Sanofi. However, the appellate tribunal overturned the CCI’s findings, noting that both parties gave plausible rationale to justify their pricing and decision to participate in certain tenders, which was not considered. Interestingly, the Supreme Court declined to interfere with the decision of the appellate tribunal, noting that its conclusion was based on the facts of the case and there was no question of law for it to determine, to merit intervention.

The CCI is yet to issue a final order in relation to the alleged cartel agreement between Novartis, Abbott, USV and Emcure in relation to alleged price fixing of anti-diabetic drugs containing the API Vildagliptin.^[23] In 2018, Abbott’s challenge against the CCI’s order of investigation was dismissed by the Delhi High Court.

Regulating abusive use of patents

A careful approach has been followed while evaluating the exercise of patent rights by pharmaceutical companies. In Biocon Limited v. F Hoffmann-La Roche AG & Ors,^[24] the CCI assessed allegations of abusive conduct against Roche with respect to preventing the entry and growth of biosimilar Trastuzumab in India, used for the treatment of HER-2 positive breast cancer. The CCI delineated the relevant market as the ‘market for biological drugs based on Trastuzumab, including its biosimilars in India’. It noted that, despite biosimilars not being identical to reference biological drugs, they are sufficiently similar in safety, efficacy and intended use, forming a competitive constraint. Further, the CCI prima facie observed that Roche was a dominant entity in the relevant market with a significant market share of 61 per cent. It also highlighted high entry barriers, consumer dependence on Trastuzumab and the lack of countervailing buying power in a prescription-driven market that consolidated Roche’s dominant position. The CCI, however, declined to hold that Roche had indulged in ‘abusive’ or sham litigation against its competitors to prevent the launch of the biosimilar products in the market. Noting the protracted legal battle between the parties and the pending adjudication by the Division Bench of the Delhi High Court, the CCI observed that it could not conclude that such legal recourse by Roche was without any objective basis.^[25] Nonetheless, the CCI prima facie found Roche to have denied market access to its competitors by making several representations, communications and advertisements to various authorities and the public to denigrate the safety and efficacy of the biosimilars. The matter is currently pending final adjudication by the CCI.

In a significant development, however, the Division Bench of the Delhi High Court recently struck down the jurisdiction of the CCI to review the conduct of patent holders. It held that, under the Patents Act, 1970, the Controller had all the necessary power to undertake the same determination as the CCI to assess the reasonableness of the restrictions imposed by the patent holder.^[26] The CCI has appealed the judgment before the Supreme Court of India. It will be interesting to see how the apex court determines the issue given that, typically, competition authorities across the world are empowered to adjudicate upon allegations of anticompetitive or abusive conduct arising out of exercise of patent rights.

Regulating anticompetitive practices of hospitals

The CCI has also received several complaints on the conduct of hospitals, perhaps because the hospital sector lacks a dedicated regulatory body.^[27] In Ramakant Kini v. Hiranandani Hospital,^[28] the CCI was asked to intervene in the practices of a large multi-speciality hospital in Mumbai, Hiranandani Hospital, which had a one-year exclusive arrangement with Cryobank to supply stem cell banking services to the hospital’s patients. The CCI found such an exclusive arrangement to be anticompetitive as it foreclosed an important market (i.e., the Hiranandani Hospital) for stem cell banking service providers. In addition, the CCI noted that the arrangement adversely impacted consumer choice and could also cause potential harm to consumers in the future if Cryobank exited the market. Accordingly, the CCI imposed a penalty of 38.20 million rupees on Hiranandani Hospital. Interestingly, the appellate tribunal overturned the CCI’s decision, noting that the regulator erred in its assessment of the potential anticompetitive effects of the exclusive arrangement by considering stem cell banking to be an essential aspect of maternity services. It also noted that the CCI failed to consider that patients could procure services from 13 alternate suppliers in the market at other hospitals. The matter is currently under appeal before the Supreme Court.

In Vivek Sharma v. Becton Dickinson India & Ors,^[29] the CCI assessed allegations of abusive conduct by another large multi-speciality hospital in Delhi, Max Hospitals, for charging excessive prices for disposable syringes sold by Becton Dickinson India to the hospital’s in-patients. The CCI prima facie noted that Max Hospitals was dominant in the market for provision of healthcare services by super speciality hospitals in Delhi, on account of its size, resources and number of such hospitals present in Delhi. The hospital was prima facie held to have engaged in abusive conduct as the price of the syringe in the open market was half of what was charged to the hospital’s patients. Interestingly, in 2018, the CCI reviewed the initial investigation report of the DG Office but found it wanting and directed it to undertake a supplementary investigation. The CCI observed that patients admitted to a hospital become ‘locked-in’ and dependent on the hospital for subsequent services and products, even if available at discounted prices elsewhere. Such ‘lock-in’ effect may enable hospitals to abuse their dominance over in-patients in the aftermarkets of pharmaceutical products and healthcare services. Accordingly, the CCI asked the DG Office to widen the scope of the investigation by focusing on the abuses in potential aftermarkets by all super-speciality hospitals in Delhi pertaining to all relevant medical products that could be reasonably obtained by patients from the open market. The final decision in the matter is currently pending, although it is understood that the investigation by the DG Office has indicated there is abusive conduct by several super-specialty hospitals.^[30]

Outlook

India continues to play a major role in the global pharmaceutical industry. It is one of the largest exporters of pharmaceutical products in the world, with many countries reliant on India’s supply of vaccines, generics and contract research and manufacturing services. At the same time, access to affordable medicines and healthcare will remain a priority for the Indian government. This puts significant responsibility upon the regulatory bodies overseeing the sector, including the CCI, to ensure a healthy and competitive market for the growth of the industry and the protection of its consumers in India. In the absence of a national regulator for the pharmaceutical sector, the CCI must assume a more vigilant role, particularly in relation to competition in the market. It is, therefore, expected that the CCI will maintain its focus on regulating the distribution and supply chains and busting cartel conduct. Results of certain ongoing inquiries such as the one assessing excessive pricing by super-speciality hospitals and the alleged anti-diabetes drug cartel are awaited. Further, the Supreme Court’s determination on the CCI’s jurisdiction to regulate patent abuse will be critical for multinational pharmaceutical companies operating in India. A greater number of transactions in the sector may, in any case, invite the CCI’s scrutiny given the introduction of the deal value thresholds. With the maturing regulator blessed with a refreshed regulatory framework, and significant penal and investigative powers, stakeholders can expect greater enforcement action and heightened scrutiny of combinations in the future.

Endnotes

^[1] Authors: Sonam Mathur – Partner; Shubhang Joshi and Rebha Dakshini – Managing Associates. The authors would like to thank Samiksha Kothari and Srivaishnavi R – Associates at the firm, for their contribution to this chapter.

^[2] Government of India, Study On CRO sector in India conducted by Department of Pharmaceuticals Ministry of Chemicals & Fertilizers, August 2023, available at: https://pharmaceuticals.gov.in/sites/default/files/CRO%20Market%20Report_High%20Resolution.pdf.

^[3] The DCA, Section 3(b).

^[4] The CT Rules, Rule 2(1)(w)(iv). Approved drugs that are proposed to be marketed with modified or new claims including indication, route of administration, dosage and dosage form, as well as modified or sustained release form of a drug or novel drug delivery system are also considered as ‘new drugs’.

^[5] The list is revised from time to time by the Ministry of Health and Family Welfare. The NLEM 2022 is currently in force and includes a wide range of drugs and devices including anti-cancer drugs, patented drugs, fixed dose combinations, modified release dosage forms, etc. In the public interest, the NPPA is also empowered to fix the price of drugs not included in the NLEM.

^[6] The CCI can, however, issue requests for information to ‘stop the clock’ if it believes that the information submitted by the parties is incomplete or deficient.

^[7] Synthimed Labs Private Limited/Ind Swift Laboratories Limited (Combination Registration No. C-2023/10/1069).

^[8] Mylan NV/Upjohn Inc (Combination Registration No. C-2020/01/720).

^[9] Ayurvedic drugs are Indian medicines described in the authoritative books of the Ayurvedic system of medicines, used for diagnosis, treatment, mitigation or prevention of a disease in human beings or animals. Ayurvedic drugs are defined in Section 3(a) of the Drugs and Cosmetics Act 1940 to include ‘all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, and manufactured exclusively in accordance with the formulae described in, the authoritative books of Ayurvedic, Siddha and Unani Tibb system of medicine’.

^[10] GlaxoSmithKline plc/Pfizer Inc (Combination Registration No. C-2019/03/654).

^[11] Canary Investment/Link Investment II (Combination Registration No. C-2020/04/741).

^[12] Canary Investment/Link Investment II/Northern and Fortis Healthcare Limited (Combination Registration No. C-2018/09/601).

^[13] Google LLC v. Competition Commission of India and Ors (Competition Appeal (Appellate Tribunal) No.1 of 2023).

^[14] In the case of cartels, the CCI can impose a fine of up to three times the profit made for each year for which the cartel was in existence, or 10 per cent of the global turnover for each year of continuance of the cartel, whichever is higher. See Section 27(b) of the Competition Act. The CCI also issued guidelines on the determination of penalties under the Competition Act, CCI (Determination of Monetary Penalty Guidelines) 2024.

^[15] Excel Crop Care Limited v. Competition Commission on India and Anr (Civil Appeal No. 2480 of 2024).

^[16] Santuka Associates v. AIOCD and Ors (Case No. 20 of 2011).

^[17] Mr PK Krishnan, Proprietor, Vinayaka Pharma v. Mr Paul Madavana, Divisional Sales Manager M/s Alkem Laboratories Limited (Case No. 28 of 2014); M/s Maruti & Company, Bangalore v. Karnataka Chemists & Druggists Association (Case No. 71 of 2013); M/s Alis Medical Agency v. Federation of Gujarat State Chemists and Druggists Association and Others (Case No. 65 of 2014), along with M/s Stockwell Pharma v. Federation of Gujarat State Chemists and Druggists Association (Federation) and Others (Case No. 71 of 2014), M/s Apna Dawa Bazar v. Federation of Gujarat State Chemists and Druggists Association and Others (Case No. 72 of 2014), Reliance Medical Agency v. The Chemists and Druggists Association of Baroda (CDAB) and Others (Case No. 68 of 2015); Madhya Pradesh Chemists and Distributors Federation v. MPCDA and Ors (Case No. 64 of 2014).

^[18] Although it is understood that there are several ongoing investigations for past conduct.

^[19] Nadie Jauhri v. Lupin Ltd and Dr. Reddy’s Laboratories Ltd (Case No. 23 of 2023).

^[20] See, Economics Division CCI, Report Workshop on Competition Issues in the Pharmaceutical Sector in India, December 2021, available at: https://www.cci.gov.in/images/workshopproceeding/en/report-workshop-on-competition-issues-in-the-pharmaceutical-sector-in-india1653547036.pdf.

^[21] International Trade Administration, India – Country Commercial Guide, 12 January 2024, available at: https://www.trade.gov/country-commercial-guides/india-selling-public-sector.

^[22] M/s Bio-Med Private Limited v. Union of India (Case No. 26 of 2013); and Shri Gulshan Verma v. Union of India (Case No. 40 of 2010).

^[23] Economic Times, CCI starts probe on alleged price fixing of key anti diabetic drugs, 14 December 2017, available at: https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/cci-starts-probe-on-alleged-price-fixing-of-key-anti-diabetic-drugs/articleshow/62059986.cms?from=mdr.

^[24] Biocon Limited & others v. F Hoffmann-La Roche AG & Others (Case No. 68 of 2016).

^[25] Also see, Macleods Pharmaceuticals Limited v. Boehringer Ingelheim Pharma GmbH & Co. KG D (Case No. 25 of 2022).

^[26] Telefonaktiebolaget LM Ericsson (PUBL) v. CCI (2023 SCC OnLine Del 4078).

^[27] Money Control, Why India’s healthcare sector needs a national regulator, 4 October 2022, available at: https://www.moneycontrol.com/news/opinion/why-indias-healthcare-sector-needs-a-national-regulator-9275121.html.

^[28] Mr Ramakant Kini v. Dr LH Hiranandani Hospital, Powai, Mumbai (Case No. 39/2012).

^[29] Shri Vivek Sharma v. Becton Dickinson India (P) Ltd & Others (Case No. 77 of 2015).

^[30] Business Standard, Hospital Chains abused their dominance to charge exorbitant prices, 23 September 2022, available at: https://www.business-standard.com/article/current-affairs/hospital-chains-abused-their-dominance-to-charge-exorbitant-prices-report-122092300441_1.html.

Disclaimer: This articleonly highlights key issues and is not intended to be comprehensive. The contents of this alert do not constitute any opinion or determination on, or certification in respect of, the application of Indian law by Talwar Thakore & Associates (“TT&A”). No part of this alert should be considered an advertisement or solicitation of TT&A’s professional services.