Competition and Anti-Trust Issues in the Pharmaceutical Industry in India: An Analytical Study

The Indian pharmaceutical industry occupies a position of singular importance in global medicine supply: it produces approximately twenty per cent of the world's generic medicines by volume and exports to more than two hundred countries. At the same time the conditions under which pharmaceutical firms compete in India raise a set of competition-law concerns that are, in important respects, more acute than those encountered in other industrial sectors. Demand for medicines is inelastic, the prescribing physician rather than the patient controls the choice of product, and intellectual property rights confer on patent-holders a period of exclusivity that is readily extendable by strategic conduct. The Competition Act, 2002 provides the principal legal instrument through which these concerns are addressed in India, and the Competition Commission of India (CCI) has, since 2009, developed a body of decisional material spanning horizontal cartels among trade associations, abuse of dominance by originator firms, and the review of pharmaceutical combinations. This paper undertakes a systematic analytical study of that body of material, identifies its doctrinal strengths and weaknesses, and advances a set of recommendations directed at the legislator, the regulator and the industry. The paper argues that while the CCI's enforcement record against trade-association cartels is substantial, the abuse-of-dominance jurisprudence remains underdeveloped owing partly to inconsistent judicial supervision, and that the unresolved interface between the Patents Act, 1970 and the Competition Act, 2002 constitutes the most significant structural gap in the Indian framework.