CCI Market Study on Pharma Sector

CCI Market Study on Pharma Sector

Part of: Prelims and GS-II – Health 

Context The Competition Commission of India (CC) in a recent report has recommended the creation of a National Digital Drugs Databank and strict enforcement of drug quality standards to boost price competition among generic drugs in India.

Key takeaways of the report 

• The market for generic drugs is driven by brand competition instead of price competition despite such drugs being functionally and chemically identical.
• Pharmaceuticals including generic drugs account for about 43.2% of out of pocket healthcare expenditure in India and about 62.7% of the total health spending in India.
• The share of online pharmacies stood at 2.8% in 2018, the online pharmacy sector’s reach has expanded during the pandemic to 8.8 million households from 3.5 million households prior to the pandemic.

About Competition Commission of India (CCI) 

• It is a statutory body established in 2003 and became fully functional in 2009. 
• It is responsible for enforcing The Competition Act, 2002 throughout India.
  • The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises. 
  • The Act regulates combinations (acquisition, acquiring of control and Merger and acquisition), which causes or likely to cause an appreciable adverse effect on competition within India. 
• CCI consists of a Chairperson and 6 Members appointed by the Central Government. 
  • Eligibility: Person should be qualified to be a judge of a High Court, or, has special knowledge of, and professional experience of not less than fifteen years in international trade, economics, commerce, law, finance. 
• It is the duty of the Commission to:
  • eliminate practices having adverse effect on competition
  • promote and sustain competition.
  • protect the interests of consumers.
  • ensure freedom of trade in the markets of India.