Pharmaceutical giants accused of forming cartel

FIVE COMPANIES in the pharmaceutical industry are being ordered by the Autoridade da Concorrência (AA) – the competition authority equivalent to the UK’s Competition Commission previously known as the Monopolies and Mergers Commission – to pay fines totalling 16 million euros, representing the highest fines ever applied in Portugal.

Abbott Laboratórios, Bayer, Johnson & Johnson, Menarini Diagnósticos and Roche Farmacêutica Química were accused of forming a cartel. “The case related to deliberate practices between companies with the objective of preventing, restricting or throwing off the competition through price fixing,” told the AA in a press release.

The investigation took place between July 2001 and January 2003, when the companies involved settled an increase in prices and presented identical proposals in 20 public tenders for supplying products to 22 hospitals, from the north to the south of Portugal. The hospitals affected by the scam included Hospital Distrital de Faro, Centro Hospitalar de Cascais, Centro Hospitalar das Caldas da Rainha and Hospital de Santa Maria, among others.

The investigation began after the Centro Hospitalar de Coimbra (CHC) launched a public tender for the supply of a list of materials, a contest which ended with no decision being taken. CHC presented a complaint as it suspected that the prices had been fixed and the AA took action.

It was through Johnson & Johnson, the company condemned to pay the lowest fine of the five, that the authorities discovered it was not an isolated case. The objective of these price increases was to influence the state to alter the fixed value for sale to the public. The AA believes this situation has caused economic damage to the value of 3.2 million euros in the hospital sector, between 2002 and 2003.

When asked to comment on the judgement, Abbott Laboratórios stated that there were no grounds for the decision.