FAS EXPOSED COLLUSION BETWEEN MEDICIN AND MEDICAL EQUIPMENT SUPPLIERS AND MOSCOW HOSPITALS

The cartel prevented entry of other companies to auctions for supplies of medication, medical products, equipment and nutrition in Moscow hospitals and created a veneer of competition

On 8 February 2018, FAS Commission found that “PHARM-PROJECT” Ltd. and “Vesta Pharm” Ltd. had concluded an anticompetitive agreement to maintain prices at 426 open auctions for supplying medicinal drugs, baby and dietary food, medical products and equipment for public healthcare establishments in 2014-2016.

FAS found that Vinogradov City Clinical Hospital, of Moscow Healthcare Department; No. 67 Lyapunov City Clinical Hospital, of Moscow Healthcare Department; No. 68 City Clinical Hospital, of Moscow Healthcare Department; “PHARM-PROJECT” Ltd. and “Vesta Pharm” Ltd. had concluded a competition-restricting agreement.

The total sum of initial maximum contract prices at the auctions reached over 644 million RUB.

Head of FAS Anti-Cartel Department said: “Customers used to sent the first parts of their auction bid to the staff of cartel members who put in the wordings required to reject the bid of companies not involved in the cartel. Customers included the wordings in the Protocol of evaluating the first parts of the bids exactly as formulated”.

Commenting the Commission decision, Stats-Secretary, Deputy Head of FAS Andrey Tsarikovskiy emphasized that “with such actions the customers removed bona fide players from the auctions as a result of which all auctions ended with the minimum reduction of initial contract prices – it means the cartel prevented saving of budgetary funds”.

In the course of the investigation some defendants to the case admitted the fact of concluding and pursuing the anticompetitive agreement.

Mandatory injunctions will be issued to the government customers not to exercise competition-restricting actions.

The case materials also will be forwarded to Chief Department for Economic Security and Countering Corruption, of the Ministry of Interior to, open criminal cases under Articles 178 and 286 of the Criminal Code.