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.