Roman Shabrov, Attorney and Partner at BRACE Law Firm, provided expert commentary to the Pharmatsevtichesky Vestnik (Pharmaceutical Bulletin) journal regarding an anti-competitive agreement case in the Chlorhexidine antiseptic market. The Federal Antimonopoly Service of Russia (FAS Russia) uncovered the regulatory violation, and the penalized companies subsequently appealed the enforcement decision.

Roman Shabrov noted that a multi-fold, unjustified price increase for a disinfectant may potentially indicate a restriction of competition, as it significantly reduces product availability. Furthermore, the fact that the companies characterized Chlorhexidine Gluconate 0.05% as a non-price-regulated disinfectant not included in the Vital and Essential Drugs List (EDL)—an argument the defense heavily relied upon—does not, in itself, preclude the regulatory classification of the arrangement as an anti-competitive agreement or a restriction of competition.

Courts have repeatedly held that the existence of an anti-competitive agreement does not depend on its execution as a formal written contract. Parties may enter into such an agreement orally, and it often remains covert. Proving the existence of an anti-competitive agreement is highly challenging and requires an individualized judicial assessment in each specific case.

To avoid legal liability, the companies in this case needed to prove that the price hike was commercially justified—for instance, driven by broader market conditions or substantially increased operating costs—and that no collusive arrangement existed between them. However, the courts found the arguments and evidence presented by the suppliers insufficient to overturn the regulatory findings.

Roman emphasized that the most compelling aspect of the case involves how the Regional Office of the Federal Antimonopoly Service (OFAS) proved the anti-competitive agreement. The antitrust regulator cited lease relations between the companies, the provision of transportation services by one company to another, and the sale of goods exclusively to a single entity (or group of entities). While the first two factors are standard elements of commercial operations and do not independently establish an anti-competitive agreement, selling goods to a single counterparty may indicate a much closer, collusive nexus between the companies.

 PDF version of the article "Overestimated: Antiseptic Suppliers Found Guilty of Cartel Conspiracy" // PHARMKRUZHOK // Accent. No. 4 (1073). February 15, 2022.