Argentine Government strengthens control over the pharmaceuticals

The Antitrust Law of Argentina empowers the Antitrust Commission (CNDC) to initiate market investigations into different sectors of the Argentine economy to analyze their competitive conditions and to issue a report with recommendations to enhance the competitiveness of the sector under review.

In February 2014, the CNDC launched four market investigations to better understand how the following markets and their respective players operate: (i) Food, Beverage, Toiletries, and Cleaning products; (ii) Pharmaceutical and health insurance companies; (iii) Inputs for the Construction industry; and (iv) Inputs for industrial companies.

Within the framework of these market investigations, the CNDC sent approximately 250 information requests to the most important local companies in these four sectors for them to  provide detailed information regarding their products, prices, market shares, costs, and commercialization channels, among other items. The CNDC has also been taken countless hearings with the different companies and trade associations involved in the investigated sectors.

Amid the market investigation of the pharmaceutical industry, the CNDC noticed that through May 14, 2014 and May 22, 2014, the largest 45 pharmaceuticals increased the prices of almost 70% of their portfolios in an average range of 3 to 4%.

As a consequence, on June 19, 2014, the Ministry of Economy and Public Finances issued Resolution 296 whereby it ordered the CNDC to launch an antitrust investigation to determine whether the above-mentioned price increases represented a violation of the Antitrust Law.

In addition to Resolution 296, the Secretary of Trade -using the powers granted by the Supply Law of 1974 and which enforceability has been very disputed by the Courts- issued Resolution 90 ordering pharmaceuticals to revert the prices of their products to their May 7, 2014 level and imposed a 60-day freeze on the May 7, 2014 level of prices. Furthermore, Resolution 90 ordered the pharmaceuticals to submit a detailed report of the prices of all of their products between April 1, 2014 and June 24, 2014.

The CNDC will now have to proceed as instructed by the Minister of Economy and Public Finance and is expected to initiate a formal cartel investigation in the pharmaceutical industry. The CNDC will start requesting the different market players for their explanations in accordance with the procedure established for anticompetitive behavior cases in the Antitrust Law. 

For further information on this topic please contact Julián Peña