By supplying over 60% of global demands of vaccines and nearly a fifth of the world’s generic drugs, the Indian pharmaceutical industry is a giant by all measures. But behind this scale resides a distribution chain, which is run through a handful of powerful trade associations, and an industry that has developed through a steady wave of mergers and acquisitions. The combination of concentrated distribution power when teamed up with heavy consolidation, is exactly the kind of setup that draws the attention of competition regulators. Several times the Competition Commission of India (CCI) has flagged concerns in this sector. The four episodes discussed perfectly answer the question WHY?
Case 1: When a Trade Body becomes a Gatekeeper
The All-India Organization of Chemists and Druggists (AIOCD), for years, required pharma companies to obtain a “Non Objection Certificate” before they appoint a new stockist in a territory, and also charged “Product Information Service” fees before the launch of any new drug. A memorandum of understanding was formed which collectively fixed the trade margins for stockists and retailers. Companies or stockists who did not comply to the same, paved the way for a coordinated boycott- a collective refusal to stock or sell the products.
In effect, a private trade body acted like a licensing authority, deciding the entry in the market and the cost of it. This pattern started surfacing across multiple CCI proceedings, and one distributor was even penalized 10% of its average annual turnover in a related matter. A prolonged 14 year investigation into the same practices was eventually closed in 2026, as a result of inadequate evidence covering the post-2013 period- not because the earlier findings were incorrect, but because of the complexity in proving that collusive conduct was continuing over for such a long stretch of time.
Case 2: Bid Rigging in a Captive Market
In the year 2015, the CCI uncovered that GlaxoSmithKline and Sanofi, among the few global manufacturers who were licensed to supply a specialized meningitis vaccine required for Hajj pilgrims, had been engaged in bid rigging on a government tender. This was a captive market, in which the pilgrims had no other substitute or alternate supplier to turn to for the need of vaccine. The tribunal ruled out that the evidence was not strong enough to conclusively prove this collusion, hence the penalty was later set aside on appeal.
Regardless of the outcome this case remains instructive. It very well highlights how markets with very few qualified suppliers, which is a common feature in specialized pharmaceuticals, are structurally prone to coordination, and how hard that coordination can be to prove with certainty, especially when alike bidding patterns can also arise innocently from similar cost structures.
Case 3: A Merger that reshaped the Industry- With Conditions
Sun Pharmaceuticals industries announced its roughly USD 4 billion acquisition of RanBaxy Laboratories, in the year 2014. A deal that would give birth to India’s largest drugmaker and the world’s fifth largest generics company. On review, the CCI found that this merger would shrink the number of credible competitors from three down to two, or leave the combined entity as a near monopolist, in seven specific drug-formulation markets.
Rather than blocking this deal, the CCI approved it under certain conditions. RanBaxy was directed to divest six brands, including Terilbax and Rosuvas EZ, and Sun Pharma had to divest its own overlapping brand. The divested assets were sold to Emcure Pharmaceuticals. This showcases the real-world example of a structural remedy. Where regulators allowed a merger to proceed while surgically preserving competition in the specific markets, in the absence of this step, which would have been probably lost.
Case 4: Resistance to a New Way of buying Medicine
A sustained campaign was organized by AIOCD against E-pharmacy platforms like 1mg, Netmeds and PharmEasy, when they began entering the market. It consisted of a nationwide one-day strike by an estimated 72,000 pharmacies. Letters claimed E-pharmacy partnerships with Amazon and Flipkart “illegal”, and also coordinated cancellation of online medicine orders in some states.This happened despite the fact that E-pharmacies accounted for only about 2-3% of total pharmaceuticals sales at the time.
This event falls in a genuinely grey zone. Real and serious concerns were raised by Chemists’ associations about licensing and patient safety compliance under existing drug laws. Legitimate regulatory advocacy is not the same thing as an unlawful boycott. But the scale and coordination of the response suggested an attempt to pre-emptively shut a new distribution channel out on incumbents' terms, at the cost of consumers — particularly in remote areas — who stood to benefit most from home delivery of medicines.
The Bigger Picture
In all four cases, there is one dominating firm that seems to pose anti-competitive risks. However, in most cases, most of the apparent anti-competitive risk does not stem from the one-dominant firm but from seemingly balanced competition from multiple parties. It both stems from collective action (trade associations organising themselves together to regulate entry, establish prices, or neutralize disruptions) and the structural impact of huge mergers reshaping entire therapeutic markets. In these cases — fines imposed, cease-and-desist orders issued, conditional merger approvals granted, and appeals denied by the CCI when evidence was lacking — the CCI is employing every available instrument to combat this fraud in price-fixing cartels and, in the process, places reasonable bounds on what the regulator can prove in court. This is only going to become more important as the pharma sector continues to gain traction and go online across India