Poland fines drug wholesalers PLN 905m over decade-long price information exchange

Poland's competition authority has fined four companies from the country's largest pharmaceutical wholesale groups a total of PLN 904,969,744.47 for exchanging non-public information on medicine prices, sales volumes and commercial terms for more than a decade. The President of the Office of Competition and Consumer Protection (UOKiK) announced the decision on 28 September, according to the authority's statement. A third group, Polska Grupa Farmaceutyczna, avoided a fine as the leniency applicant.

The fines fall on Neuca, PLN 499,037,763.85; Farmacol-Logistyka, PLN 400,532,440; Farmacol, PLN 3,488,520; and Świat Zdrowia, PLN 1,911,020.62. Polska Grupa Farmaceutyczna applied for leniency, provided evidence and cooperated, and avoided a financial penalty altogether, UOKiK said. The decision is not final and the companies may appeal to the court.

How the exchange worked

The Neuca, Farmacol and Polska Grupa Farmaceutyczna groups are the largest wholesale distributors of pharmaceutical products in Poland, with a combined share of the wholesale medicines market above 70 per cent in 2015 to 2022, according to the statement.

The prices at which wholesalers sell to individual pharmacies are not public. The authority says the wholesalers obtained them through IT tools used in partner programmes for pharmacies, which gave them access to data on pharmacies' purchases in exchange for discounts, training and marketing support, among other things. They then shared the information with one another and used it in their own commercial decisions. Neuca and Polska Grupa Farmaceutyczna had used the tools since October 2015, and companies from the Farmacol group joined in January 2017, UOKiK said.

With data from thousands of pharmacies, the participants could see what a particular pharmacy was buying from a competitor, at what price and on what terms, and knew when a small price cut would be enough or when no cut was needed at all, the authority says. Where a competitor sold a medicine at a higher price, a wholesaler raised its own price without fear of losing the customer; where a rival cut its price, the wholesaler adjusted its offer so as, in the words employees of one wholesaler used in correspondence, to "avoid triggering a price war", according to the statement.

The authority stressed the line it was drawing. "The law does not prohibit monitoring competitors' publicly available prices," the statement says, but here the information was not public and was exchanged among the participants.

"For more than 10 years, Poland's largest pharmaceutical wholesalers, knowing their competitors' current offers and the prices currently offered to individual pharmacies, instead of competing for customers, 'synchronised' their price lists," Tomasz Chróstny, President of UOKiK, said in the statement.

Leniency and the Commission's view

The decision received a favourable opinion from the European Commission, which confirmed the legal assessment of the practice and the authority's reasoning in light of evidence obtained during searches, UOKiK said. The maximum fine for taking part in an agreement restricting competition is 10 per cent of an undertaking's annual turnover.

"As a leniency applicant, Polska Grupa Farmaceutyczna helped us detect and break up this cartel, thereby avoiding a financial penalty," Chróstny said, adding that the case shows it is worth cooperating early enough.

A busy month for the authority

The pharmaceutical decision is one of several large competition and consumer cases on the authority's news page since mid-September. They include fines of more than half a billion zlotys on Biedronka and transport companies over collusion in the labour market on 22 September, fines for bid rigging in high-voltage work on 29 September, objections raised against Google, and fines of nearly PLN 150 million on four banks over changes to contract terms on 15 October.

For governance and compliance teams, the case is a reminder that data collected through customer loyalty or partner programmes can itself become the channel for an unlawful exchange of information when it is passed between competitors. The authority's account turns on that point: the data came from tools offered to pharmacies, and the infringement it describes lay in sharing that data among rivals.