Competition law for healthcare industry in India In India there is constitutional commitment to provide access to healthcare.

However, there are several factors posing a problem in assuring the right to health. Market malpractices and anti-competitive conduct in the pharmaceutical industry and the health delivery system are main factors. The healthcare sector in India comprises of hospitals, pharmaceutical industry and allied services such as diagnostics and pathological laboratories and medical insurance. No consumer choice. By default, consumers have little choice when it comes to medicines and healthcare services. Usually it is the doctors and pharmacists who are the final decision makers and not the consumer. He has to depend on the prescription of the doctors. This unique phenomenon (especially in the absence of proper regulatory oversight and strict enforcement) often lead to proliferation of market malpractices at various levels. Consumer often gets entangled in a vicious cycle involving commercially motivated doctors, pharmacists, diagnostic clinics and pharmaceutical companies. Diagnosing for profit. Anti-competitive practices in the health delivery system include receiving kickbacks by doctors from pharmaceutical companies for influencing drug sales, tied selling, suggesting more tests than necessary and accepting commission for referrals. With particular reference to pharmacists, the anticompetitive practices most commonly engaged in are reflective of collusion. Anti-competitive practices prevalent in the sector on the part of doctors, pharmacists, hospitals and pharmaceutical firms can often be to the detriment of consumers. The pharmaceutical industry is most prone to anti-competitive practices. Pharmaceutical companies often enter into agreements and joint-venture arrangements at various stages of manufacturing, research and development, marketing and promotion. The specific anti-competitive practices of the pharmaceutical system and the health delivery system, which are covered by Section 3 of the Competition Activity 2002, are collusive agreements including cartels, tied selling, exclusive supply agreements, exclusive distribution agreements, refusal to deal and resale price maintenance. The Competition Act, 2002, also, prohibits both vertical and horizontal practices in relation to cartelization and collusion. Competition Act, 2002 is not a bitter pill for Indian healthcare sector. Competition law is vital for the efficient functioning of markets in a free market economy. There are a number of issues in the healthcare sector that may curb or foster competition. The Competition Act, 2002 (as amended up to date) was enacted with an object, keeping in view economic development of the country, to ensure that anticompetitive practices do not occur within different markets and to ensure

that consumers get the benefits of the new market economy. A look at the Competition Act, 2002 shows that several practices are in fact in the purview of the competition authorities; however, the hurdle is in identifying these practices at the micro level. The new Competition Act, 2002, is better equipped to deal with the anticompetitive practices prevalent in the health sector. Currently the regulatory regime has been quite hard on manufacturers, but extremely soft on two other groups of important players, the doctors and pharmacists. This situation needs to be given due consideration by the relevant authorities. To deal with anticompetitive practices in the pharmaceutical sector and the health delivery system taking recourse to the legal and policy options available is not sufficient; there is need for efficacious implementation of appropriate policy tools as well. The key element in successfully enforcing the provisions of competition law is building the capacity of the competition agencies. Suggestions 1. Promoting Generic Competition. 2. Checking Collusive Activities. 3. Controlling Tied Selling. 4. Dealing with IPR Related Issues. Compulsory licensing is an effective way to deal with abuse of monopoly rights. Competition law apart, patent law and drug price control are crucial for efficacious elimination of competition violations in the pharmaceutical industry. 5. Regulatory regime for Health Delivery System. Apart from competition law, there is no concrete regulatory mechanism addressing anticompetitive conduct in the health delivery system. With specific reference to doctors, the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 may also be used to deal with anticompetitive practices. 6. Health Insurance 7. Creating Awareness The relationship between IPR and Competition law must be further studied with specific emphasis on the pharmaceutical sector.