The Lithuanian Association of Pharmacies and eight pharmaceutical companies have been fined a total of almost 73 million euros for making a deal on higher markups, the Competition Council reports.
The competition watchdog said in a press release it imposed fines of 27.5 million euros on Eurovaistine, 16.7 million euros on Gintarine Vaistine, 9.2 million euros on Tamro, 7.7 million euros on Benu, 2.7 million euros on EVD, 1.27 million euros on EVRC, 7.4 million euros on Limedika, 11,200 euros on Siromed Pharma and 7,400 euros on the Lithuanian Association of Pharmacies.
The companies violated the Lithuanian Competition Law and the Treaty on the Functioning of the European Union, the Competition Council said.
Assisted by the association, the companies in 2017 agreed on markups for medicinal products which are covered by the national health insurance. The pharmacies then submitted their estimates, claiming these were based on their operating costs, to the Health Ministry for approval, according to the press release.
“Later, the competitors jointly prepared a document of a prototype pharmacy, which was supposed to show that the companies would be able to stay in the market only if the ministry approved the proposed margins,” it said.
The investigation has revealed, however, that the markups agreed by the competitors were not only supposed to cover their costs, but also to ensure additional profits, according to the press release.
The markups, approved by the health minister, took effect in July 2018, and are still in force.
Meanwhile, the Lithuanian Association of Pharmacies (LVA) said that the fines were “absolutely unjustified” and that it would go to court.
“The Competition Council’s decision is absolutely unjustified. In 2017, the LVA, which was lawfully involved in the legislative processes as normal, did not carry out any illegal agreements with the members of the association and did not violate competition law,” Kristina Nemaniute-Gage, the association’s chairwoman, said in a statement.
She insisted that the competition watchdog’s ruling ran counter to national and EU legislation and would be challenged in court. (LRT/Business World Magazine)