Information Asymmetry Causes Anti-Competitive Practices In Healthcare Sector: CCI Chairman

Many anti-competitive practices in the healthcare sector are due to information asymmetry, according to the Competition Commission of India chief.

Last month, CCI came out with a policy note titled 'Making Markets Work for Affordable Healthcare' wherein it had flagged various issues.

Many of the anti-competitive practices observed in the healthcare sector "may not violate the competition law but tends to create conditions that do not permit the process of competition to unfold effectively in the market", CCI Chairman Sudhir Mital told PTI.

According to him, the policy note recognises that these issues would require some regulatory interventions from concerned ministries.

The CCI, which keeps a tab on unfair practices in the market place, had received about 52 cases involving anti-competitive practices in pharmaceutical and healthcare sector.

"In deciding these cases, it was observed that a number of issues go beyond competition law," Mital said.

Among other issues, the policy note said that unreasonably high trade margins contribute towards high drug prices and electronic trading of drugs could be an option to spur competitive pricing.

The watchdog's policy note had said that one major factor that contributes to high drug prices in India is the unreasonably high trade margins.

"The high margins are a form of incentive and an indirect marketing tool employed by drug companies," an official release had said quoting the policy note.