CCI Rejects DG’s Findings, Closes 14-Year Antitrust Case against Pharmaceutical Companies

On 29 June 2026, the CCI passed a closure order³ under Section 26(9) of the Competition Act, disagreeing with the DG’s findings. The CCI held that the alleged contraventions of Sections 3 and 4 of the Competition Act were not established against the All India Organisation of Chemists and Druggists (OP-1) and several pharmaceutical companies and manufacturers’ associations (collectively, OPs).

Background: Allegations of Anti-Competitive Conduct

The proceedings arose from an information filed in 2012 by the President of the All India Chemist and Distributors Federation (AICDF). The Informant alleged that anti-competitive terms were incorporated into Memoranda of Understanding (MoUs) executed between the OP-1, the Indian Drug Manufacturers’ Association (OP-2) and the Organisation of Pharmaceutical Producers of India (OP-3).

Specifically, it was alleged that the OP-1 compelled pharmaceutical companies, including Cipla, Sun Pharma and Dr. Reddy’s Laboratories, to obtain a No Objection Certificate (NOC) or Letter of Cooperation (LoC) before appointing stockists. The Informant further alleged the following practices:

• Mandatory Product Information Service (PIS) charges for launching new products.
• Fixation of trade margins for non-scheduled drugs.
• Threatened boycotts of companies that failed to comply.

Res Judicata Objection Rejected

The opposite parties argued that the matter was barred by the principle of res judicata in light of earlier proceedings involving similar allegations. The CCI rejected this contention, observing that the present case involved additional material, new parties and broader allegations warranting an independent examination.

CCI’s Assessment of the DG’s Findings

Although the DG concluded that the opposite parties had engaged in anti-competitive conduct, the CCI found that the investigation relied predominantly on evidence from 2009 to 2012 and failed to adequately consider the compliance measures adopted thereafter.

Compliance Measures Adopted After Earlier Proceedings

The CCI noted that following earlier proceedings, the OP-1 had submitted an Affidavit of Compliance and Undertaking in 2014 confirming the following:

• NOC/LoC requirements would not be imposed mandatorily.
• Trade margin fixation would not be enforced.
• PIS charges would not be made compulsory.
• The MoUs executed in 2003 and 2009 had been terminated.

Insufficient Evidence of Continuing Conduct

The CCI also noted evidence demonstrating that stockists had been appointed without obtaining NOCs or LoCs. It observed that the DG had not examined any stockists to establish that such approvals remained mandatory.

It further found insufficient evidence to substantiate allegations relating to compulsory PIS charges or boycott mechanisms. Consequently, the CCI closed the proceedings and, having found no contravention by the opposite parties, declined to examine the liability of their office bearers under Section 48 of the Competition Act.

Business Takeaway

The decision highlights the importance of implementing and documenting meaningful competition compliance measures, particularly where concerns have previously been raised by the CCI.

Businesses should ensure that internal policies, industry arrangements and commercial practices are periodically reviewed and updated. Demonstrable compliance efforts and evidence of changed market conduct can play a significant role in defending against future competition law investigations.

Last Updated on 17 July, 2026