Bundeskartellamt imposes fines against pharmaceutical wholesalers

The Bundeskartellamt has imposed fines amounting to approximately 2.6 million euros against four companies and seven persons responsible in the pharmaceutical wholesale sector on account of anti-competitive agreements. The companies concerned are Andreae-Noris Zahn AG (Anzag), Phoenix Pharmahandel AG & Co. KG (Phoenix), Gehe Pharma Handel GmbH (Gehe) and Sanacorp Pharmahandel AG (Sanacorp).
In early 2003 the pharmaceutical wholesaler Anzag had decided to pursue a so-called “push forward” strategy to increase its market share. Under this strategy, Anzag increased the discounts it granted to pharmacies. As a result other pharmaceutical wholesalers raised their discounts as well in order to regain the market shares they had lost. This led to fierce price competition in the sector.
In mid-2003 Anzag’s new board of directors decided to end this price competition, which was referred to as the “discount battle” in the sector. Anzag agreed with the three other large pharmaceutical wholesalers active nationwide, Phoenix, Gehe and Sanacorp, to re-distribute the market shares it had gained as a result of its “push forward” strategy among the three wholesalers. For this purpose, so-called “balance lists” were exchanged at regional level. These listed for the region concerned how many pharmacies, and with what average monthly turnover, had switched from Anzag to one of the other competitors and vice versa. It was planned to adjust any disparities by Anzag granting pharmacies with an according purchase volume unfavourable purchasing conditions to induce them to switch back to the partner to the agreement which had been their previous supplier. This was intended to restore calm to the market, end the discount competition and return to the same market share distribution that was in place before the “push forward” strategy.

The President of the Bundeskartellamt, Ulf Böge, stated: “Based on evidence secured by the Bundeskartellamt in search operations we are convinced of the existence of an intentional agreement between the accused pharmaceutical wholesalers. This agreement constitutes a quota cartel bordering on a price-fixing cartel, which is the most severe form of competition restraint. It is vital that the Bundeskartellamt take drastic action against such practices, the more so as the Bundeskartellamt already imposed fines on account of similar agreements against numerous pharmaceutical wholesalers and persons responsible in 1990/1991. As in other sectors before, the cartel agreement was again initiated at top management level. The fines are comparably lenient due to the fact that the Bundeskartellamt had to apply the rules for calculating fines applicable at the time of the competition infringement and the fact that cartel-induced additional proceeds could not be established with certainty. Under the law applicable since July 2005 the fines would have been significantly higher.”

The decisions are not yet final. The persons and undertakings concerned can appeal against the decisions at the Düsseldorf Higher Regional Court.