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BRAZIL TO TARGET ALLEGED PHARMACEUTICALS 'CARTEL'

October 13, 2005

Brazilian antitrust regulator CADE will shortly rule on a long-running investigation into alleged anti-competitive practices in the drug market. The list of accused companies involved is nearly identical to the list of Brazil's top drug companies, and includes most multinationals.

The allegations, which are unproven, focus on claims brought before a parliamentary inquiry into the drugs market. Claims investigated by a branch of Brazil's Justice Ministry, the SDE, centre on an alleged meeting between the country's leading twenty drug firms ahead of the introduction of measures legalising bioequivalent generics in 1999. It is claimed that sources present at the meeting expressed fears over plans by two local companies to begin marketing generics, and outlined strategies to undermine the credibility of generic products with consumers.

CADE has a reputation as taking a tough line on competition issues posed by foreign players. The agency recently blocked a major acquisition in the foods sector, on the grounds that the purchase would give the buyer a monopoly position in some product segments. Meanwhile, the SDE is expected to press for light penalties, perhaps in light of the success of generics in Brazil. The sector remains a key element in government strategies to expand healthcare to low-income groups and build the domestic manufacturing sector.