General Superintendence suggests condemnation of cartel in antiretroviral drugs’ market

The General Superintendence of the Administrative Council for Economic Defense – CADE recommended, in an opinion issued on 31 December 2014, the condemnation of the companies AB Farmo Química Ltda., Aurobindo Farmacêutica do Brasil Ltda., Brasvit Indústria e Comércio Ltda and four individuals for cartel formation in procurements for the acquisition of inputs for the manufacture of antiretroviral drugs.

According to the investigations, the companies previously agreed the bid results by fixing prices and holding several actions, such as presenting proposals for the coverage, suppressing bids and proposals, and subcontracting competitors in the procurements held by public labs. The conduct would have taken place between 2003 and 2005.

Investigation – The administrative proceeding was opened in 2008 by the former Secretariat for Economic Law (SDE) of the Ministry of Justice after information obtained by the Federal Police’s operation entitled “Dirty Laundry” (“Roupa Suja”). This operation investigated the alleged criminal organization specialized in bid rigging in procurements for the provision of laundry services to public hospitals in Rio de Janeiro.

During the investigation, the Federal Police ascertained that one of the main investigated companies in the alleged bid rigging conduct in the laundry services’ market was also articulated with other companies to rig public bids aiming at acquiring inputs for drugs manufacturing.

The case (Administrative Proceeding no. 08012.008821/2008-22) is to be judged by CADE’s Tribunal, responsible for a final decision. If condemned, the companies may pay fines of up to 20% of its respective gross revenue in the market sector in which the conduct occurred.