GSK, Sanofi hauled up by India's competition watchdog on vaccine tenders

GSK vaccines head Moncef Slaoui

India's competition watchdog said that government vaccine procurement rules favored multinational drugmakers Sanofi ($SNY) and GlaxoSmithKline ($GSK) and the companies colluded in pricing, according to the Economic Times, charges that both companies denied in response to queries from FiercePharmaAsia.

But the Competition Commission of India said last week that Sanofi India faces a fine of INR600 million ($9.4 million), while GlaxoSmithKline could see a penalty of INR30 million for unfair trade practices related to the case. The two companies have 60 days from last week to deposit the fines even if they appeal the ruling.

The case was brought after local vaccine company Bio-Med complained to the commission that the companies acted as a cartel to get annual government tenders for meningitis vaccines for Hajj pilgrims, the Economic Times said.

Sanofi executive vice president of vaccines Olivier Charmeil

"GSK is reviewing the order passed by the Competition Commission of India (CCI) on June 4th 2015," the company said in an email. "We believe that we have complied with all applicable laws, including competition laws. GSK seeks to operate with the highest levels of integrity and in full compliance of local regulations. GSK India will consider all options following review of the order passed and take action as appropriate."

Separately, Sanofi Pasteur commented said it is reviewing the order.

"We are in the process of evaluating the order of the Competition Commission of India (CCI). We strongly disagree with the CCI's findings in this case and are in consultation with our legal advisors to file an appeal against the order," a Sanofi Pasteur's India spokesperson said in an email.

"Sanofi Pasteur is a global organisation which adheres to and abides by all the laws and regulations that apply in each country in which it operates (including those relating to fair competition). We have extended our full support to the investigation process of the CCI in this case. Since this is an on-going matter, we cannot comment any further."

Also in the complaint was that the government modified tender turnover terms without any reasonable rationale and explanation between 2008 to 2012 in ways that kept Bio-Med out of the process and allowed the companies to charge higher prices, the Economic Times said,

The government buys meningitis vaccines every year for approximately 200,000 Hajj pilgrims, the Economic Times said.

The ruling comes as Sanofi and GlaxoSmithKline look to vaccines as part of high stakes efforts to grow business in emerging markets as key portions of operations globally. At the same time companies such as India's Zydus Cadila are looking to expand locally and nations like China, Indonesia, South Korea and Malaysia eye national champions in the space.

- here's the story from the Economic Times

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