Georgian pharmaceutical companies fined for cartel price fixing

Several Georgian pharmaceutical companies have been fined almost $20 million for raising the prices of cancer drugs in a ‘concerted fashion to restrict competition’.

On Friday, Georgia’s National Competition Agency fined four pharmaceutical companies — Aversi, Gepha, PSP, and Mermisi — for overcharging for medications used in cancer treatment provided by the state.

The agency reported that the prices of medication sold by the companies ‘were found to coincide with an accuracy of 1 tetri’. 

Georgia’s competition laws prohibit ‘concerted practices’ aimed at ‘preventing, restricting, and/or distorting’ competition on the market through ‘directly or indirectly fixing purchase or selling prices or any other trading conditions’.

The National Competition Agency claimed that from January 2021 to August 2023, the four companies worked together to fix high prices for 42 medications. The national regulator added that they had identified 23 cases of cartel agreements between two companies, 47 cases among three business groups, and 18 cases among all four.

The four companies were fined a total of  ₾50 million ($19.7 million); Aversi ₾14,402,425 ($5,360,000); Gepha ₾20,349,336 ($7,600,000); PSP ₾17,094,872 ($6,367,000); and Mermisi ₾951,301 ($354,300).

The agency stated that they had also investigated the possible involvement of SK Impex, another pharmaceutical company, in the scheme, but found that the company was not involved.

Georgian health minister Zurab Azarashvili called the pharmaceutical companies’ price manipulation ‘shameful’. 

‘It has been confirmed that these companies tried to use vicious methods against the people and the state, against the most severely ill patients’, Azarashvili noted during a press conference on Friday. 

Earlier this month, the Ministry of Health accused undisclosed ‘pharmaceutical companies’ of selling certain drugs at highly inflated prices, ranging from 1000% to 3000% of the drugs’ import price. 

Georgia’s Pharmaceutical Companies Association hit back at the ministry, accusing it of waging a ‘slanderous’ campaign against Georgia’s pharmaceutical sector. 

Soon after Friday’s announcement, the Association vowed that Aversi, PSP, and Mermisi, which are members of the Association, would challenge the fines in court. 

Read in Armenian on CivilNet.