Commission fines Alchem for participating in a pharmaceutical cartel

This article is brought to you in association with the European Commission.

The European Commission has fined Alchem International Pvt. Ltd. and its subsidiary Alchem International (H.K.) Limited (together ‘Alchem‘) €489,000 for breaching EU antitrust rules. The Commission has found that, for more than 12 years, Alchem participated in a cartel concerning an important pharmaceutical ingredient.

In October 2023, the Commission adopted a settlement decision and imposed fines totalling €13,4 million against six companies for their participation in the same cartel. Alchem decided not to settle this cartel case with the Commission, unlike the other participants. As a result, and in line with its usual practice, the investigation against Alchem continued under the standard cartel procedure. The Commission sent a Statement of Objections to Alchem in June 2024.

The investigation

Alchem is a producer of the pharmaceutical ingredient N-Butylbromide Scopolamine/Hyoscine (‘SNBB’), an important input material to produce the abdominal antispasmodic drug Buscopan and its generic versions.  

The Commission’s investigation revealed that Alchem coordinated and agreed to fix the minimum sales price of SNBB to customers (i.e., distributors and generic drug manufacturers) and to allocate quotas. In addition, Alchem exchanged commercially sensitive information. 

The Commission’s investigation revealed that Alchem participated in a single and continuous infringement in the European Economic Area (‘EEA’), spanning from 1 November 2005 to 12 February 2018.

This is the first cartel that the Commission sanctioned in the pharmaceutical sector and in relation to an active pharmaceutical ingredient. The Commission cooperated and coordinated certain investigative activities with the Swiss and Australian competition authorities.

Fine

The Commission imposed a fine of €489,000 on Alchem.

The fine was set on the basis of the Commission’s 2006 Guidelines on fines.

In setting the fine, the Commission considered various elements, including the value of SNBB sales relating to the infringement, the nature of the infringement and its multifaceted features, its geographic scope and its duration.

Alchem chose not to cooperate with the Commission during the investigation and therefore did not benefit from any reduction under the Commission’s 2006 Leniency Notice or its 2008 Settlement Notice.

Background

Article 101 of the TFEU and Article 53 of the EEA Agreement prohibit agreements and other restrictive business practices that may affect trade and prevent or restrict competition within the Single Market. 

The Commission’s investigation was triggered by an application under the Commission’s 2006 Leniency Notice submitted by C2 PHARMA in April 2019. This was followed, after the inspections in September 2019, by successive applications for reduction of fines by Transo-Pharm and Linnea.

More information on this case will be available under the case number AT.40636 in the public case register on the Commission’s competition website once confidentiality issues have been resolved. For more information on the Commission’s action against cartels, see its cartels website.

Whistleblower tool

The Commission has set up a tool to make it easier for individuals or companies to alert it about anticompetitive behaviour while maintaining their anonymity. This tool protects whistleblowers’ anonymity through a specifically-designed encrypted messaging system that allows two way communications. The tool is accessible via this link.

Action for damages

Any person or company affected by the anti-competitive behaviour described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court of Justice of the European Union and Council Regulation 1/2003  both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the cartel participants concerned, damages may be awarded without being reduced on account of the Commission fine.

The Antitrust Damages Directive, makes it easier for victims of anticompetitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.