CADE leads an investigation in public procurement for drugs acquisition

The General Superintendence of the Brazilian Administrative Council for Economic Defense – CADE opened on this Thursday (April 02nd) an administrative proceeding to investigate an allegedly cartel practice in public procurements for drug acquisition (PA 08012.002222/2011-09). Among the medicines are antidepressants, anxiolitics, pain relievers, sedatives, anticoagulant, and drugs for hypertension, reflux and cough. 

The evidences indicate that 15 companies would have maintained often communication with the objective of coordinating prices and matching conditions and advantages on public procurements, trying to restrict the competition and the competitive character of the contest. The practice would have occurred, at least, from 2007 to 2011, in some Brazilian states as Minas Gerais, São Paulo, Bahia and Pernambuco.

The companies investigated are Comercial Cirúrgica Rioclarense Ltda., Cristália Produtos Químicos Farmacêuticos Ltda., Dimaci Material Cirúrgico Ltda., Drogafonte Medicamentos e Material Hospitalar, Hipolabor Farmacêutica Ltda., Laboratório Teuto Brasileiro S/A, Macromed Comércio de Material Médico e Hospitalar Ltda., Mafra Hospitalar Ltda., Merriam Farma Comércio de Produtos Farmacêuticos Ltda., Netfarma Comércio Online S/A, NovaFarma Indústria Farmacêutica, Prodiet Farmacêutica Ltda. (atual Profarma Specialty S/A), Rhamis Distribuidora Farmacêutica Ltda., Sanval Comércio e Indústria Ltda., e Torrent do Brasil Ltda.

 According to CADE´s Superintendence, the companies’ executives and representatives monitored the public procurement contests to previously agree which would be the winners and the amounts to be offered by each one. Moreover, they concerted how the batches of the procurement would be divided among them; which companies would show covering proposals or bids; and which would take off their proposals or would not submit any bids. 

The case was opened after the Public Prosecutor’s Office at the state of Minas Gerais presented information to CADE, after phone interceptions were made and also evidentiary remedies at the headquarters of some of the investigated companies. 

With the opening of the administrative proceeding, the charged parties will be notified to present their defenses. After this phase, the General Superintendence will issue an opinion recommending either the condemnation or the case filing to CADE’s Administrative Tribunal, which is responsible for the final decision.