#CompetitionLaw #DrugPricing #PharmaceuticalIndustry #Healthcare #CCI #AccessToMedicines #Antitrust #India
BACKGROUND
The Supreme Court has recognised the right to health and access to medical care as integral to the right to life guaranteed under Article 21 of the Constitution of India. Providing quality and affordable healthcare to citizens is one of the basic responsibilities of the State. Yet, with some exceptions, countries across the world—including highly developed countries such as the United States—have struggled to ensure access to affordable healthcare. India is no exception.
The traditional public perception in India of the medical profession as a noble vocation devoted to service to mankind, with doctors often treated with great reverence, has, in many respects, been eroded. The expansion of large private hospital chains and reported instances of practices that appear to place commercial considerations above patient welfare have contributed to this loss of public confidence. There are growing concerns about the exploitation of patients through the recommendation of unnecessary medical procedures and diagnostic tests, as well as the reported practices of “cuts and commissions” involving doctors, other healthcare professionals (HCPs), diagnostic laboratories and similar institutions.[1]
One important dimension of this widely acknowledged, yet insufficiently addressed, public concern—the excessive pricing of essential cancer medicines—was recently highlighted by the Indian media while reporting on a pending public interest litigation (PIL) before the Supreme Court of India.[2]
In this two-part blog, I will first examine the competition-law dimensions of the issue and assess how the Competition Commission of India (CCI/Commission), the fair-market watchdog, has discharged its statutory responsibility of “protecting the interests of consumers” in relation to this matter of significant public importance.
Let me begin with a commonly held perception that India’s pharmaceutical industry is highly competitive, that essential medicines are subject to strong price regulation and that private healthcare in India is relatively affordable—an impression sometimes cited in discussions about the growth of medical tourism in the country. In my humble opinion, this perception is only partly borne out by reality. The key findings and observations of the CCI’s Market Study into the Pharmaceutical Sector, published on 18 November 2021, bring several shortcomings in the market to light.[3]
Mimicking or pseudo-competition – Branded generics through brand proliferation
Among other matters, the CCI Market Study highlighted concerns arising from the sale and aggressive marketing of branded generics by pharmaceutical companies. This is a feature particularly pronounced in India.[4]
India’s pharmaceutical market is characterised by the predominance of branded generics, rather than by the widespread sale of medicines under their generic names alone. IBEF estimates that the domestic pharmaceutical market reached approximately ₹5.30 lakh crore (US$60 billion) in FY 2025–26. Separately, a more granular study by Pharmarack, supported by the Indian Pharmaceutical Alliance, estimated the Indian Pharmaceutical Market at approximately ₹2.42 lakh crore in 2023. On that study’s classification, branded generics accounted for about 87% of the market by value, trade generics for approximately 9–10%, generic-generics for around 0.5–1%, and patented or innovator drugs for about 3%. These segment shares relate to the 2023 dataset and should not be read as a breakdown of the FY 2025–26 market estimate.
These categories require careful distinction. Branded generics are generally off-patent medicines marketed under proprietary brand names, often supported by promotion to prescribing doctors. Trade generics are typically marketed through distributors and retailers without the same level of doctor-directed promotion, with channel margins playing a greater role in sales. Consequently, the term “generic medicine” does not necessarily mean an unbranded or low-priced medicine in the Indian market. The prevalence of brand-based prescribing, combined with differences in marketing and distribution incentives, raises important questions about price competition, informed prescribing and patients’ ability to access lower-priced alternatives.
Significantly, branded generics dominate the market. The competition between medicines containing the same active pharmaceutical ingredient (API) does not necessarily translate into effective price competition when prescribing decisions are brand-specific and patients have limited information about comparable alternatives. The relatively inelastic nature of demand for essential medicines compounds this problem, particularly in emergencies, when patients may have little practical ability to seek alternatives. The CCI has previously identified brand proliferation, quality perceptions and incentives for pharmacies to favour higher-margin products as relevant features of this market.
Has the CCI Failed to Regulate the Pharmaceutical Sector?
However, despite examining prevailing market conditions, the CCI has, in my assessment, not adequately addressed certain potentially significant market strategies that may have adverse implications for consumers.
Co-marketing arrangements between competitors – One such practice concerns co-marketing and co-promotion arrangements between Indian pharmaceutical companies—many of which manufacture generic medicines—and multinational pharmaceutical companies holding patents or established brands approaching patent expiry. Depending on the timing and availability / demand situation of the particular drug in the market and their terms and commercial context, such arrangements may affect the incentives of the parties to compete independently and may influence the timing and extent of competition from generic or substitutable products.
Legally, not all such arrangements are anti-competitive per se. However, where they involve agreements between actual or potential competitors that restrict independent competitive decision-making or otherwise cause or are likely to cause an appreciable adverse effect on competition in India, they may warrant examination under Section 3(1) read with the applicable provisions of Section 3(3) of the Competition Act, 2002 (the Act). Where the arrangement is vertical in nature, that is, where the arrangement is between a manufacturer and its distributor or wholesaler, Section 3(4) may also be relevant, depending on the facts and the nature of the restraint. Section 3(1) prohibits agreements that cause or are likely to cause an appreciable adverse effect on competition in India, and Section 3(2) declares agreements in contravention of Section 3(1) as void.
Agreements to delay generic entry through patent settlements – Another practice that merits the Commission’s scrutiny is what is colloquially described as “sweetheart deals”, “pay-for-delay agreements” or “reverse-payment settlements”. Evergreening is a related but distinct concept, generally referring to strategies intended to extend or preserve market exclusivity through patent-related measures. In pay-for-delay or reverse-payment arrangements, an originator pharmaceutical company may provide value to a generic manufacturer in return for the latter agreeing to defer or limit its entry into the market with a cheaper generic version of the medicine. Such agreements can delay generic competition and prolong the period during which patients may have to pay higher prices. Their legality must be assessed on the facts and under the applicable competition-law provisions with the caveat that all such patent settlements are not, merely by reason of being a settlement, anti-competitive per se. These practices came under focused regulatory scrutiny in the European Union during the pharmaceutical- “sector inquiry” conducted by the European Commission (EC), which was launched in 2008 and culminated in its final report in July 2009. Here it may be pertinent to distinguish two separate strands of EU enforcement. First, on 15 June 2005, the European Commission imposed fines totalling €60 million on AstraZeneca AB and AstraZeneca plc for abuse of dominant position under former Article 82 of the EC Treaty (now Article 102 of the Treaty on the Functioning of the European Union), in connection with conduct relating to supplementary protection certificates and marketing authorisations for its anti-ulcer medicine Losec. That case concerned abuse of dominance; it was not itself a pay-for-delay case. Secondly, in November 2009, the Commission announced that it had information concerning agreements between the French originator company Servier and several generic manufacturers, including three Indian companies, Lupin Ltd, Matrix Laboratories Ltd and Niche Generics Ltd, as well as other companies, which were alleged to have delayed the entry of generic versions of Servier’s perindopril, a medicine used to treat hypertension. The Servier proceedings concerned alleged restrictive agreements and are the more directly relevant example in the context of pay-for-delay arrangements. The General Court delivered judgment in December 2018, annulling or modifying parts of the Commission’s decision; the Court of Justice subsequently delivered judgments on appeal on 27 June 2024. The EU provision dealing with anti-competitive agreements was former Article 81 of the EC Treaty (now Article 101 TFEU), whereas former Article 82 (now Article 102 TFEU) dealt with abuse of dominance.
In the above context, when the French Unit of Indian pharmaceutical company RANBAXY was raided in October 2009 by the EC, I had highlighted these developments in my article published in The Economic Times on 3 November 2009, titled “NO FAIR PLAY IN PHARMA INDUSTRY”. The archival reference may be read on my blog here.
The Roche investigation – To be fair, the CCI has previously examined allegations of exclusionary conduct in the pharmaceutical sector. In the Roche matter, Biocon and Mylan alleged that F. Hoffmann-La Roche AG and its group entities had abused their dominant position in India in relation to the breast cancer drug Trastuzumab. Although the biosimilars developed by Biocon and Mylan entered the Indian market in 2014, the formal CCI proceedings arose from information filed by the two companies in 2016. By its order dated 21 April 2017 in Biocon Limited and others v. F. Hoffmann-La Roche AG and others (Case No. 68/2016), the CCI formed a prima facie view that Roche’s alleged conduct warranted investigation under Section 4(2)(c) of the Competition Act, 2002, concerning denial of market access. This was a direction for investigation, not a final finding of infringement.
The allegations included attempts to raise concerns with regulatory authorities about the safety, efficacy and approval pathway of the competing biosimilars, as well as conduct allegedly intended to impede their market access through representations to public authorities, tender-related interventions and litigation. Roche, for its part, disputed the allegations and maintained, among other things, that its representations were directed at patient safety and compliance with regulatory or tender requirements. The matter therefore concerned alleged exclusionary conduct and abuse of dominance, rather than necessarily a conventional financial “pay-for-delay” settlement.
It is relevant, however, that early media reports also referred to investigations into alleged pharmaceutical patent settlements, including a reported agreement involving Roche and Cipla concerning a lung cancer drug and another involving Glenmark Pharmaceuticals and Merck concerning a diabetes drug. However, I have not located official confirmation establishing that the reported arrangements formed part of the Biocon–Mylan/Roche proceedings or that the CCI ultimately investigated those specific agreements as reported. They should therefore be distinguished from the allegations formally recorded in Case No. 68/2016.
The Roche proceedings also illustrate the complications that can arise when competition scrutiny overlaps with intellectual property litigation. Roche challenged the CCI proceedings before the Delhi High Court in Roche Products (India) Pvt. Ltd. and others v. Competition Commission of India and others (W.P. (C) 4529/2017), contending, inter alia, that civil proceedings concerning the biosimilars and related intellectual property claims were relevant to the CCI’s jurisdiction. The jurisdictional challenge has not yet been finally resolved: according to the Delhi High Court’s order dated 9 September 2026, the writ petition was adjourned and listed for 19 April 2027. The available order does not, by itself, establish whether the underlying CCI investigation is presently proceeding, has been stayed, or has otherwise reached a procedural conclusion. Nor should the absence of a publicly reported final investigation report be treated, without further confirmation, as conclusive proof of the investigation’s current status.
The wider jurisdictional debate between IPR and competition law has since assumed greater significance. In July 2023, the Delhi High Court, in the Ericsson–Monsanto matters, held that the Patents Act, 1970 prevailed over the Competition Act in relation to the exercise of rights by a patentee. The NCLAT subsequently applied that reasoning in the Swapan Dey litigation. In February 2026, the Supreme Court, in Competition Commission of India v. Swapan Dey, stayed parts of the NCLAT’s order while considering the jurisdictional issue. Accordingly, as of November 2026, the broader question of the relationship between patent law and competition law remains subject to authoritative determination by the Supreme Court. The eventual outcome may have implications for the scope of CCI scrutiny of conduct involving intellectual property rights, although its precise effect on the distinct allegations in the Roche matter cannot be assumed in advance.
Overcharging by In-house pharmacies in Hospitals?
Recently, the CCI had another opportunity to examine a practice that raises significant competition concerns: the alleged overcharging of patients admitted to multi-speciality and super-speciality hospitals through their in-house pharmacies. In 2015, a local lawyer filed information supported by evidence[5] alleging such overcharging against Max Super Speciality Hospital, Patparganj, New Delhi. On DG’s recommendations, the investigation was widened to include eleven more super speciality hospitals. The CCI, by a series of twelve separate but similar orders dated 21 May 2026, closed the proceedings concerning all the hospitals.
In my view, the CCI missed this opportunity. The outcome is contentious and raises questions about the effectiveness of competition-law enforcement in this area. CCI closed cases against each hospital without a single finding of contravention, not because the hospitals were proven innocent, but, in my assessment, because the investigation was methodologically deficient and the Commission declined to fill the gap. The manner in which the Commission dealt with those deficiencies, and the statutory route adopted for disposing of the matters, merit scrutiny[6]. The broader concern remains that patients admitted to private super-speciality hospitals may constitute a captive in-patient base, often physically unable to seek alternatives for medicines and diagnostic services. The competition-law implications of pricing in such circumstances deserve careful examination, including the evidentiary standards applied when assessing whether prices are excessive or exploitative.
In a separate research-based article currently under publication in the European Competition Law Review (ECLR), I have provided a detailed analysis of the above orders passed by the Commission, together with other broader issues arising in India’s pharmaceutical sector. I hope to share that analysis with readers shortly.
Conclusion – I conclude this brief analysis by observing that, despite the CCI’s clear statutory mandate to promote and sustain competition in India and to protect the interests of consumers, its response to the concerns discussed above has, in my assessment, so far been inadequate.
I hope that the current leadership of the Commission, as well as the concerned authorities in the Government of India, will consider the issues raised above and take appropriate steps. In my opinion, the CCI is an important and appropriate regulator to examine unfair, exploitative and potentially anti-competitive practices in the healthcare system, where the facts disclose conduct amenable to inquiry under Sections 3 and 4 of the Act.
The CCI has the statutory ability to initiate inquiries on its own motion and direct investigations into suspected contraventions of the Act. The Director General also has investigative powers, including search-and-seizure powers, subject to the applicable statutory safeguards and authorisation requirements. These powers can be relevant to investigating suspected anti-competitive conduct in the pharmaceutical and healthcare sectors, including where evidence of agreements or coordinated conduct may not be readily available through public sources. Such inquiries may also build upon the concerns and market features identified in the CCI’s 2021 Market Study into the Pharmaceutical Sector.
In the second part of this article, I will examine the implications of the pending public interest litigation (PIL) before the Supreme Court of India concerning the excessive pricing of medicines, as well as the Government’s recent initiative through the National Pharmaceutical Pricing Authority (NPPA) to rationalise trade margins for 137 identified non-scheduled anti-cancer drugs. Under the measure, the applicable trade margin has been capped at 30% pursuant to Paragraph 19 of the Drugs (Prices Control) Order, 2013. The revised prices took effect on 9 November 2026. I will consider the scope and implications of this intervention in the next part of the series.
[1] A seminal work in this area by Samiran Nundy, Keshav Desiraju and Sanjay Nagral in the form of a book “Healers or Predators? Healthcare Corruption in India” narrates the rot in our private healthcare system.
[2] https://www.livelaw.in/amp/top-stories/cancer-medicine-sold-at-rs-27000-though-retailer-cost-is-2700-patients-extorted-supreme-court-drug-price-control-551286?utm_source=chatgpt.com September 22, 2026 ( LiveLaw) ; https://www.indiatoday.in/india/law-news/story/cancer-drug-prices-supreme-court-daylight-robbery-rs-27000-markup-3000675-2026-09-22?utm_source=chatgpt.com September 22,2026( India Today) ; https://timesofindia.indiatimes.com/toi-plus/health/broad-daylight-dacoity-drug-prices-in-six-questions/articleshow/134809788.cms October, 09, 2026.
[3] https://www.cci.gov.in/images/marketstudie/en/market-study-on-the-pharmaceutical-sector-in-india1652267460.pdf
[4] Refer to “ The Myth of Branded Generics” by Injeti Srinivas , the then Chairman of National Pharmaceutical Pricing Authority (NPPA) , dated September 20, 2014.
[5] Shri Vivek Sharma filed information under Section 19(1)(a) of the Act against Becton Dickinson India (P) Ltd., a manufacturer of disposable syringes, and Max Super Specialty Hospital, Patparganj, Delhi. It was alleged that the two entities had colluded to print artificially inflated Maximum Retail Prices (“MRP”) on syringes sold through the hospital’s in-house pharmacy as compared to the same products available in the open market. Having formed a prima facie opinion of contravention of Section 4, the Commission subsequently directed the Director General (“DG“) under Section 26 (1) of the Act to investigate the matter vide order dated 17th November 2015.
[6] Interestingly, the CCI chose to pass these orders not under any subsection of Section 26 or Section 27 of the Act, but merely under “order”, which apparently, cannot be challenged by way of a statutory appeal before the NCLAT under Section 53A of the Act, although recourse to the High Court’s writ jurisdiction may remain available. The result may be a troubling precedent: private super-specialty hospitals may charge supra-competitive prices for diagnostic tests and medicines to their captive in-patient base, including patients who are physically unable to seek alternatives, without a clear statutory appellate remedy, so long as no direct comparator price is put on record by the Government or sectoral regulators—a standard that may be difficult to satisfy where the relevant data is held by hospitals or manufacturers.
