Nine leading pharmaceutical companies have agreed to pay a South African business regulator a total of R18-million to settle a complaint alleging anti-competitive trading practices, officials said on Friday.
The settlement agreements signed over the past week bring to an end three years of negotiations and court actions, said Karin Coode, a spokesperson for South Africa’s Competition Commission.
The companies involved are Novartis, Roche Products, Ingelheim Pharmaceuticals, Abbot Laboratories, Bayer, Eli Lilly, Wyeth, Aventis Pharma, Sanofi-Synthelabo and International Healthcare Distributors.
The settlement was announced late on Friday, and the companies could not immediately be reached for comment.
Nine wholesalers brought the complaint against the companies after they entered into an exclusive distribution agreement.
The competition commission, an independent body that ensures dominant companies don’t abuse their market power, found in 2001 that the deal created a forum where prices and trading conditions could be set.
It recommended a case be brought to the country’s Competition Tribunal, which has the power to impose fines.
The respondents rejected the accusations and went to the High Court to try to block the case.
While the companies still deny contravening South African law, they have accepted terms to resolve the dispute, the commission said in a statement on Friday.
Under the settlement, the pharmaceutical companies agreed to sell their shareholdings in International Healthcare Distributors, which should lead to more competitive prices for medicines, said Menzi Simelane, a lawyer who sits on the commission.
Each company will also pay the commission R2-million by January 15.
”We believe that this settlement addresses the distortions in the market and will lead to more intra-brand competition and ultimately benefit the consumer,” Simelane said in the statement.
The commission will now withdraw the case before the tribunal and the parties will withdraw the matter before the High Court, Simelane said.
Negotiations with a 10th company involved in the consortium, Schering-Berlin, were continuing, Coode said. – Sapa-AP