Posted: 2 months ago

Four Pharmaceutical Companies Fined for Price Collusion in Georgia

Georgia's National Competition Agency has imposed fines on four pharmaceutical companies for anti-competitive practices, specifically for violating Article 7 of the Law of Georgia "On Competition". This violation occurred within the state-funded program for oncological medicines.

The investigation by the agency revealed that between 2021 and 2023, four companies—Aversi, Gefa, PSP, and Mermis—engaged in price-fixing activities. Evidence showed that these companies had identical pricing for 42 medications under the state funding program. Specifically, the submitted prices on the Ministry's confidential portal were identical to the accuracy of one Tetri.

In total, 88 instances of identical pricing were identified, including 23 cases involving two companies, 47 with three companies, and 18 involving all four companies. The breakdown of identical pricing cases was as follows: Aversi with 74 instances, Gepha (including GPC, Pharmadepo) also with 74, PSP with 81, and Mermis with 29.

The National Competition Agency determined these actions to be concerted efforts aimed at restricting competition, constituting a severe breach of competition law. Consequently, the companies have been ordered to pay fines totaling up to 53 million GEL: Aversi – 14,402,425 GEL; Gefa – 20,349,336 GEL; PSP – 17,094,872 GEL; and Mermis – 951,301 GEL.

To foster a competitive market environment, the agency also issued a mandatory recommendation to the Ministry of Labor, Health and Social Protection of IDPs from the occupied territories of Georgia. The recommendation calls for the regulatory oversight of the universal health protection state program and the portal's operations. The agency's investigation was prompted by information released on March 23, 2023, by the Ministry concerning price increases and uniform pricing by importers and distributors of oncological medicines.