CCI to study pricing issue in pharma, healthcare sector

The proposal, mooted by the regulator, comes amid concerns over anti-competitive practices in the pharmaceutical and healthcare sectors

Fair trade regulator Competition Commission of India, Government of India plans to carry out a detailed study on pharmaceutical and healthcare segments, including differential pricing ways, as it looks to identify areas that pose competition concerns.

The proposal, mooted by the regulator, comes amid concerns over anti-competitive practices in the pharmaceutical and healthcare sectors. Continuing with efforts to ensure healthy competition, the watchdog is mulling a situation analysis to understand the prescription and referral pattern of hospitals as well as medical practitioners. Besides, the CCI instituted study would look into the tie-ups and networking amongst various stakeholders in the sectors.

An agency would be roped in for conducting the study that would focus on Delhi and three areas of the national capital region — Gurgaon, Faridabad and Noida, as per a request for proposal document.

Exclusive tie-up through formal or informal arrangement for referrals, wherein people are required to get tests done from a particular laboratory, and bundling of various products as well as services would also be looked into.

"Price discrimination – differentiation in pricing/ packages depending upon the category of the patients- hospitals/ patients/ insurance companies/ third party administrators (TPAs)," as well as loyalty rebates would be analysed.

Further, prescription pattern in terms of branded and generic drugs apart from exclusive arrangement for procurement of medicine, implants and other consumables would be subject matter of the study.

The broader objectives of the study includes identifying areas of competition concern and measures to address them.

The prevalence of issuance of No Objection Certificates (NOCs) by trade associations and pharmacists would also be looked into. In recent times, the regulator has cracked the whip on various druggists and chemists groupings for indulging in unfair business practices.

"In the enforcement experience of the Commission, several anti-competitive practices in the Indian pharma and healthcare sector have come to the fore.

"In order to understand the nature and magnitude of such practices, the Commission has decided to conduct a study on pharma and healthcare sector in Delhi and select districts of NCR," the document said.