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Russian FAS exposed large-scale medical drug cartel

Staff Writer | August 24, 2016
A suspected cartel operates practically everywhere in the Russian Federation. Cartel signs are exposed at more than 700 auctions. Some of the respondents were already held liable in similar cases.
Russia medical cartel
Crime in Russia   Exposed at more than 700 auctions
FAS exposed elements of an anticompetitive agreement concluded to maintain prices at auctions for supplying medicinal drugs and medical products for state and municipal needs. The antimonopoly authority opened a case under Clause 2 Part 1 Article 11 of the Federal Law “On Protection of Competition”.

“Cartels directly harm the state budget and the public. Collusion in such a socially important field as health care leads to growing prices for medicines and medical services. Exposing and suppressing such a cartel is a high-priority task for FAS”, emphasized Stats-Secretary, Deputy Head of FAS Andrey Tsarikovskiy.

The following companies are suspected of participating in the cartel: “Rosmedkomplekt” Ltd., “Etalon-Trading” Ltd., “Market Pharm” Ltd., “PIK” Ltd., “Intermedservice” Company” JSC, “Service-Pharm” Ltd., “Intermedservice Pharma” Company” Ltd.

As a result of these companies involving in procurement, the initial maximum contract prices for supplying medicinal drugs and medical products for out-patient health care clinics and in-patient hospitals were not reduced at all or reduced insignificantly (0.5-2%).

The Head of FAS Anti-Cartel Department, Andrey Tenishev, commented the investigation: “In spite of some clear signs of collusion, medical institutions did not file petitions on violating the law upon those facts. No other industry today is susceptible to such a mass impact of antimonopoly practices”.

Earlier some companies, against whom the case is opened, were already found guilty in committing a similar violation: Karelia OFAS exposed collusion at auctions organized by the Ministry of Health Care and Social Development of the Republic of Karelia and some medical institutions.

OFAS found that “Rosmedkomplekt” Ltd., “Etalon-Trading” Ltd., “Market Pharm” Ltd. and “PIK” Ltd. concluded anticompetitive agreements at 38 open electronic auctions, the total sum of the initial contracts was over 85 million RUB.

OFAS fined “Rosmedkomplekt” Ltd. more than 12.2 million RUB and “Etalon-Trading” Ltd. - more than 4.4 million RUB for violating the law. Other two cartel participants will be fined in the near future.