Notícias
DECISION
CADE convicts cartel in pharmaceutical sector
On 11 December, the Tribunal of the Administrative Council for Economic Defense (CADE) convicted 5 individuals and 5 companies for alleged bid-rigging to purchase pharmaceutical drugs, and for operations in the pharmaceutical private market. The fines applied exceeded BRL 50 million.
The case was launched after the Federal Prosecution Services of the State of Minas Gerais provided information collected through telephone tapping, and search and seizure warrants in the headquarters of some of the companies under investigation.
According to the complaint, they often communicated to coordinate price-fixing, conditions and advantages in bid-rigging, restricting competition and the competitive nature of the bids. Besides that, they fixed prices and conditions to sell pharmaceutical drugs in the private market.
The practice happened from 2007 to 2011 in some Brazilian states, such as Minas Gerais, São Paulo, Bahia, and Pernambuco.
The cartel involved not only direct price-fixing between the pharmaceutical companies, but also facilitated collusion practices among distributors.
This dynamics defines the so-called hub-and-spoke cartel, where the hub acts as the facilitator to coordinate prices, market allocation, customers, production, or distribution among competitors. This entity can operate in a different level of the supply chain in relation to the spokes.
Companies are to pay fines totalling over BRL 45 million, and the individuals will pay fines that surpass BRL 6 million. The total amount of fines applied sum BRL 51.4 million.
In addition to the fines imposed, the Tribunal determined the decision to be submitted in an official letter to the Federal Prosecution Services of the Brazilian states of Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraná, and São Paulo, to ensure they are informed and take the necessary measures to offset negative effects on society.