The Georgian Competition and Consumer Agency (GCCA) has fined four pharmaceutical companies for abusing their market dominance and forcing extremely high mark-ups on essential medicines.
The enforcement comes after an investigation launched in December 2023, initiated by a referral from the Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs. The probe examined whether excessive price increases, from import to retail, constituted anti-competitive behavior in the pharmaceutical sector.
Eight companies with market shares exceeding 40% were initially reviewed in relation to 14 medicines. The GCCA concluded that four of them had engaged in unfair pricing practices. The companies and associated fines include:
- Global CBS LLC (Oflab-Oz, Hyzine, Ioril-10) – GEL 249,144
- Concept Pharma LLC (Floxazol) – GEL 21,646
- Rich Group LLC (Zinasen) – GEL 77,936
- Gea LLC (Biseptol 120 ml and 480 ml) – GEL 210,632
Total penalties were GEL 559,358, with fines determined at up to 5% of each company’s projected 2024 turnover.
The GCCA found that profit margins exceeding 30%, combined with mark-ups above 20%, were not economically justified. In some cases, pricing structures included non-standard costs such as gold jewelry, luxury car expenses, cultural entertainment, cosmetic and dental services and stays in high-end hotels during conferences.
As a result, the Agency issued binding recommendations for dominant pharmaceutical companies to implement internal pricing policies aligned with competition guidelines. Any future evidence of excessive pricing may result in new investigations.
