Free Competition and Regulated Markets

On November 3, 2021, the Supreme Court (Rol N° 22.270-2021), resolved an appeal filed by Socofar S.A., against the ruling of the Court for the Defense of Free Competition (“TDLC”), providing instead that the consultation raised in competition proceedings is accepted for the purpose of resolving whether there is an actual or potential risk of anticompetitive behavior in the pharmaceutical laboratories market.

The origin of this case was a consultation filed by Socofar S.A. before the TDLC requesting a ruling on whether or not the differential treatment granted by pharmaceutical laboratories in the pricing of their products to public and private customers participating in the pharmaceutical distribution segment is in accordance with free competition.

In the consultation, Socofar S.A. stated that the Drug Market Study conducted by the National Economic Prosecutor’s Office (2020) showed differences in the prices charged by the laboratories to their different buyers for the same products and purchase volumes, with the large pharmacy chains paying, on average, 70% more than the public sector and 60% more than private institutional buyers. He added that Law No. 21.198, which authorized the intermediation of medicines by Cenabast, granted Cenabast preferential purchasing conditions with notoriously lower prices than those granted to the distribution channel.

Upon hearing the appeal filed by the consultant, the Supreme Court held that “there is no doubt that the TDLC is empowered to know the conditions in which the market develops, in order to determine the effectiveness or not of the differences in treatment that are predicated of the laboratories, in relation to different agents and the existence or not of a justification for it” (considered Eleventh).

It should be noted that if, within the framework of the consultation, the TDLC finds possible anticompetitive conduct in the market for the sale of pharmaceutical products to the distribution channel, the TDLC may adopt general measures aimed at preventing such risks from materializing, which may impose certain guidelines that must be respected in this type of transactions.

Should you require additional information on this matter, please contact: Andrea Abascal (aabascal@jdf.cl) and Jorge Tisné (jtisne@jdf.cl).