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The Georgian National Competition Agency has imposed fines on four pharmaceutical companies for engaging in concerted practices

The Georgian National Competition Agency has fined 4 companies in the pharmaceutical sector for anti-competitive actions. The case concerns the violation of Article 7 (concerted practices) of the Law of Georgia on Competition within the framework of the state funding program for oncology medicines.

According to the decision of the National Competition Agency, within the framework of the investigation, it was established that in the years 2021-2023 (including August), 4 companies (Aversi, Gepha, PSP, Mermis) had agreed on prices for oncology medicines under the state funding program, resulting in price fixing.

The National Competition Agency identified 42 medicines where identical price formation had taken place by the four companies. The prices submitted by the companies on the closed portal of the Ministry were found to coincide with an accuracy of 1 Tetri.

The Agency identified 88 cases of identical pricing, including:

•          23 cases involving two companies.

•          47 cases involving three companies.

•          18 cases involving four companies.

Specifically, Aversi had 74 cases of identical pricing, Gepha (GPC, Pharmadepot) had 74 cases, PSP had 81 cases, and Mermis had 29 cases.

The National Competition Agency has classified the actions of the four companies as a concerted practice to restrict competition, and it is considered a severe violation of the competition legislation. Consequently, the companies were fined up to 53 million GEL in total:

Aversi: 14 402 425 GEL

Gepha: 20 349 336 GEL

PSP: 17 094 872 GEL

Mermis: 951 301GEL

To improve the competitive environment in the market, the Competition Agency has issued a mandatory recommendation to the Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs of Georgia in order to regulate the operation of the state program of universal health protection and the portal at the normative level.

The Agency initiated an investigation based on information made public by the Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs of Georgia on March 23, 2023. The information revealed that importers and distributors of oncological medicines were charging identical prices, leading to an increase in prices.

The Georgian National Competition Agency conducted an investigation against 5 companies - Aversi, Gepha, PSP, Mermis and SK Impex. In the process of studying the issue, the fact of violation against SK Impex was not established.

In 2023, the Agency completed 7 investigations on possible abuse of dominant position, unfair competition, concerted practice, and possible restriction of competition by state administrative bodies. Out of these, no violation was found in one case, the study was stopped at the request of the applicant in one case, and a violation was established in five cases. The investigations covered markets such as auto fuel, tobacco, pharmaceuticals, shipping, auto technical inspection, fast food services, and construction/infrastructure services. Currently, the Agency is conducting an investigation in relation to three issues - online sales of cinema tickets, parking lots, and food product markets.

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