Heavy fine imposed upon GlaxoSmithKline Pharmaceuticals Ltd. and Sanofi Pasteur India for anti-competitive practice

Competition Commission of India (CCI): CCI imposed a total fine of about Rs 64 crore on GlaxoSmithKline Pharmaceuticals Ltd. and Sanofi Pasteur India for collusive bidding in supply of a meningitis vaccine to the government for Hajj pilgrims and subsequently plotting to charge higher prices in the government tender for the said vaccine. The order of Commission came upon an information filed by Bio-Med Pvt. Ltd., a pharma company, which also makes polysaccharide Quadrivalent Meningococcal Meningitis (QMMV) vaccines. The information was filed against GlaxoSmithKline Pharmaceuticals Ltd., Sanofi Pasteur India and Health and Family Welfare Ministry was also made party in the matter. It was alleged in the information that Government introduced and modified the turnover conditions for eligibility of the participating bidders to supply the particular vaccine without any reasonable rationale and explanation. It was further alleged that GlaxoSmithKline Pharmaceuticals Ltd. and Sanofi Pasteur India, also cartelized through bid rotations and geographical allocations. CCI in its investigation found that both companies were acting pursuant to an anti-competitive agreement and formed a cartel to get government tenders to supply meningitis vaccine which was required to be administered upon the pilgrims who wish to go on annual pilgrimage of Hajj. After perusal of material on record and hearing both the parties, CCI found GlaxoSmithKline Pharmaceuticals Ltd. and Sanofi Pasteur India liable for violation of the provisions of the Competition Act, 2002 and levied penalty to the extent of three per cent of the turnover both on GlaxoSmithKline Pharmaceuticals Ltd. and Sanofi Pasteur India (aggregating to Rs 60.49 crore and Rs 3.04 crore, respectively) and gave both companies sixty days to deposit the amount. Apart from imposing penalties, the Commission has directed GlaxoSmithKline and Sanofi to “cease and desist” from anti-competitive practices, In re: Bio-Med Pvt. Ltd. v. Union of India, 2015 CCI 11, decided on 04.06.2015