The Hungarian Competition Authority Entered a Decision in the Cartel Procedure Affecting Three Hungarian Pharmaceutical Wholesalers
Published: Oct 2, 2015
According to the decision of the Hungarian Competition Authority rendered on September 14, 2015, the act of EUROMEDIC-PHARMA Gyógyszernagykereskedelmi Zrt (Euromedic), HUNGAROPHARMA Gyógyszerkereskedelmi Zrt (Hungaropharma) and TEVA Gyógyszergyár Zrt (TEVA) wholesaler companies together with two consulting companies, PharmAudit Kft (PharmAudit) and Marketing-kommunikációs Kft (Mezadin) constituted a unified, complex and continuous infringement of law which aimed to restrict and in fact restricted the competition. The Hungarian Competition Authority imposed serious fines on the companies.
1. Statement of facts
The companies committed infringement because they manipulated the tender announcement in such way that many of their competitors could not participate in the public procurement procedure and for the competitors the conditions of participation were made more difficult to comply with, furthermore prior to the submission of the public procurement tender they coordinated their offers in contemplation of each other and shared the market amongst each other.
The public procurement tender was invited by Budapesti Egészségközpont Zrt in 2011 on “The supply of medicines and solutions for infusions” for twelve hospitals belonging to the Metropolitan Municipality in the amount of HUF 5 billion annually.
The public procurement announcement was published according to the original conditions. However, the collaborating companies managed – with the help of PharmAudit – to have the Budapesti Egészségközpont Zrt modify the tender announcement according to their intention.
Among the amended conditions stipulated in the modified tender especially the two daily delivery references requirement was suitable for the exclusion of pharmaceutical manufacturers because these companies did not conduct such an intensive delivery activity that was carried out by the wholesalers.
The condemned companies jointly attained – within the framework of their realized behavior – the amendment of the tender in a way that the conditions of the tenders could only be fulfilled by the three pharmaceutical wholesalers. It also meant that only these three companies could participate in the public procurement procedure and they kept other pharmaceutical manufacturers away from the tender. This resulted in the significant restriction of the competition.
With the coordination assistance of PharmAudit regarding the 919 active ingredients specified in the tender for the twelve metropolitan hospitals, the three wholesalers agreed on the split of their winning ratio and divided the market among each other.
2. Fines imposed by the Hungarian Competition Authority
In its decision the Hungarian Competition Authority imposed a fine of HUF 792,200,000 (approximately EUR 2,458,645) on Euromedic, Hungaropharma and TEVA each and HUF 66,595,000 (approximately EUR 206,682) on Mezadin and HUF 12,400,- Ft (approximately EUR 40) on PharmAudit.
The content of this newsletter is for information purposes only and should not be treated as legal advice by KNP LAW Nagy Koppany Varga and Partners or any of their attorneys. For more information please contact us.