OREANDA-NEWS. October 19, 2010. The Federal Arbitration Court of West-Siberian District confirmed validity of the decision of the Tyumen Office of the Federal Antimonopoly Service (FAS Russia) regarding “Nicopharm” Pharmacy” Ltd., reported the press-centre of FAS Russia.

In October 2009, Tyumen OFAS Russia found that the pharmacy fixed excessive prices for essential medicines.

The Order of the Governor of the Tyumen region specified maximum retail mark-ups for medicines in the Tyumen region. According to the Order, retail mark-ups for the medicines included in the List of essential medicines, must not exceed 30% or 35%. However, “Nicopharm” Pharmacy” Ltd. was selling such medicines with up to 50% mark-ups.

Experts of the antimonopoly body analyzed competitive environment and Tyumen OFAS Russia established that “Nicopharm” Pharmacy” Ltd. has dominant position on the retail market of medicines in Ishim. Therefore, the company violated the antimonopoly law by selling medicines with illegal mark-ups, which is contrary to Clause 10 Part 1 Article 10 of the Federal Law “On Protection of Competition”.

“Nicopharm” Pharmacy” Ltd. disagreed with the conclusions of the Antimonopoly Service and challenged the decision at three court instances. At the court hearings the company representatives claimed that OFAS had made mistakes in its analysis of competitive environment, in which the company operated.

Having examined the case file, the Court ruled that the pharmacy arguments were unacceptable under the law.

Dmitry Shalabodov, the Head of Tyumen OFAS Russia, commented the Court findings: “Initially the pharmacy agreed that it had used the maximum mark-ups wrongly. By challenging our analysis that the company has dominant market position, “Nicopharm” could have forced the Court to revoke the decision. If the company had managed to prove that it did not have dominant market position, then Article 10 of the Federal Law “On Protection of Competition” would not be applicable. However, the Court confirmed the rightness of our actions and upheld our decision”.

Reference:
Clause 10 Part 1 Article 10 of the Federal Law “On Protection of Competition” prohibits actions (omissions) of an economic entity with dominant market position that have resulted or can result in preventing, restricting or eliminating competition and (or) infringing the interests of other persons, including violation of the pricing procedures established by normative legal acts.