Pharma sector study will identify steps to boost competition and ensure drug affordability: CCI Chief

Fair trade regulator will identify measures to enhance competition in the country’s pharmaceutical sector for ensuring affordability of drugs after analysing findings of its market study, which is likely to be completed within a month, according to its chief Ashok Kumar Gupta.

The Competition Commission of India (CCI), which keeps a tab on unfair business practices as well as promotes fair competition across sectors, initiated the pharmaceutical sector study after observing issues such as lack of “effective consumer choice.”

Gupta said CCI is close to completing its study on the country’s pharmaceutical sector and is likely to be concluded within a month.

“After analysing the findings of the study, we (CCI) plan to come out with observations on various aspects in the sector that can improve market outcomes.

“Currently, it appears that, when it comes to medicines, competition is primarily on the basis of brands and not prices. The study will identify measures to increase competition for ensuring affordability of drugs,” the CCI chairperson told PTI in an interview.

Market studies were initiated in the pharmaceutical and telecom sectors, given their significance in the “new COVID-19-induced socio-economic milieu.”

Gupta noted that the study on the pharmaceutical sector was initiated “because of observable demand-side issues, such as lack of effective consumer choice.”

The watchdog has been supplementing enforcement actions by commissioning market studies to have a better understanding about market structures and competition issues.

The study on the telecom space was started amid rapid advancements in technology and the fast-changing market dynamics in the space that have become more pronounced due to the pandemic.

In 2020, the regulator completed its study on the e-commerce space wherein the aim was to have a better understanding about the novel competition issues in the wake of growing importance of digital platform-centric commerce.

The study revealed bargaining power imbalance and information asymmetry between platforms and their businesses as among the emerging issues.

“Exercising the advocacy mandate, CCI nudged e-commerce platforms to institute a set of self-regulatory measures over certain areas such as search ranking, collection/use/sharing of data, user preview mechanisms, revision of contract terms and discount policy,” Gupta said.

Considering that government policies and legislations, formulated with certain stated objectives, might inadvertently restrict competition, the regulator engages with the government to identify possible competition issues.

“Ex-ante competition assessment of draft/proposed legislations/policies for identifying competition issues and recommending pro-competitive measures is thus a key area of engagement with the government as part of the advocacy mandate of CCI,” Gupta said