FAS found a cartel in procurement of medicines and medical products
The violations is exposed at more than 400 auctions, with the total amount over 400 million RUB in five regions of the Russian Federation
On 12 December 2016, FAS Commission found that “PHARM SKD” Ltd. and “NOVOPHARM” OJSC formed a cartel at state auctions for supplying medicines, medical products, decontamination equipment and alimentary therapy in order to maintain prices for them (Clause 2 Part 1 Article 11 of the Federal Law “On Protection of Competition”).
The companies are among the top ten suppliers of medicines against HIV, treatment of hepatitis B and C, and medicines for oncological patients.
Stats-Secretary, Deputy Head of FAS Andrey Tsarikovskiy emphasized the scope of the issue : “Today’s decision is one of many on a number of cases investigated by FAS and its regional bodies in 2016 on bid-rigging cartels for supplying medicines and medical products”.
The case was opened upon a statement by the “For Fair Procurement” Foundation for monitoring public procurement and property trading.
“The Fund is of great assistance for us in exposing anticompetitive phenomena in the course of procurement”, pointed out Head of FAS Anti-Cartel Department, Andrey Tenishev. “Many our high-profile cases would not be possible without their help”.
Head of the “For Fair Procurement” Foundation Anastasia Mutalenko emphasized: “This is a clear example how a signal from an activist, who directed a project of the All-Russian People’s Front - “For Fair Procurement” to the regulator, helped expose numerous violations of the antimonopoly law: the cartel formed by drug suppliers. Auction bidders artificially maintained drug prices, preventing possible increase of the quantity of drugs purchased by the state, “taking hope away from the patients and hampering the efforts against spreading out AIDS in the region. We are in a constructive dialogue with FAS and it demonstrates that joint work by activists and regulators enable to move from a signal to the result”.
Andrey Tenishev commented the criminal investigation: “Dozens of government customers incurred losses through cartel operations. When cartel members took part in bidding, the reduction of the initial price was only 0.5%, while when independent bidders were involved, the price reduction reached up to 30%. It means there was potentiality for driving bargains”.
Thus, as a result of the collusion the state did not save budgetary funds allocated for purchasing medicines and medical products.
The case materials will be transferred to the Ministry of Interior to open a criminal case under Article 178 of the Criminal Code of the Russian Federation.
An administrative case will be open against “PHARM SKD” Ltd. and “NOVOPHARM” OJSC. Under the Code on Administrative Violations, the size of a fine for anticompetitive agreements is from 10% to 50% from the original minimum costs of the trading subject.
