In the beginning of January, the Commission for Protection of Competition (CPC) announced the launch of a sectoral analysis aimed at evaluating the state and conditions of competition within Serbia’s pharmaceutical market. The focus of the investigation will be on medicines for human use, specifically those on the list of drugs prescribed and dispensed through mandatory health insurance.
As part of the analysis, the CPC has begun distributing questionnaires to pharmacies with multiple retail outlets to gather critical data. The information collected will form the foundation for a comprehensive review of the market’s competitive dynamics.
As announced, several key factors of the pharmaceutical market will be examined, with the primary focus on drug pricing, market shares, competitive conditions, and any potential barriers to market entry. Furthermore, the CPC will evaluate the vertical relationships between wholesalers and pharmacies, which could impact the competitiveness of the market conditions and pricing transparency.
Practical Consequences and Future Actions
The sectoral analysis is expected to have significant implications for the pharmaceutical market in Serbia.
The goal of the sectoral analysis is to foster an environment where competition thrives, leading to improved access to medicines and potentially lower prices for consumers. As part of the official report, the CPC also plans to issue recommendations on how the identified issues could be addressed, which would contribute to a more competitive and efficient pharmaceutical market. These would be general guidelines formulated based on the results of the conducted analysis. The guidelines will be dependent on the findings, but are expected to include proposals for regulatory changes, such as adjustments to pricing mechanisms, transparency in drug distribution, or measures to facilitate the entry of new market participants.
Aside from the general recommendations, the subjects jeopardizing fair market competition could face individual measures of the CPC for restoration of market balance. Namely, if the findings corroborate the existence of anticompetitive practices or barriers to competition, the CPC could proceed with issuing specific measures against entities found in breach of the provisions of the Law on Protection of Competition. The measures at CPC’s disposal vary and can include, among others, issuing fines or requiring structural changes in the market to ensure fairer competition and better access to more affordable medicines for consumers. Structural changes may require dissolving market participants, by means of selling shares or parts or assets of business entities to unrelated parties, or other means of protection of competition, depending on the type of violation that has been determined.
The report on the conducted sectoral analysis will be made available to both the general public and relevant authorities, industry participants, and other stakeholders (healthcare providers and insurers etc.) in the form of an official report, presumably by the end of 2025. In the coming months, it is expected that the CPC will continue to monitor the market and engage with all relevant parties to ensure that the recommendations, once issued, are effectively implemented.
Author: Nada Bakrač, Associate at IVVK Lawyers