The Italian Competition Authority targets a bid-rigging practice concerning supply of plasma derived drugs

Combating bid-rigging practices affecting public procurement contracts in the health sector is always a high priority for the Italian Competition Authority (ICA), as reflected by its recent decision to open an antitrust investigation in the case I819 ( Gara per produzione e fornitura al sistema sanitario di farmaci plasma derivati, http://www.agcm.it/component/joomdoc/allegati-news/I819_avvio.pdf/download.html).

This time, in the case I819, the ICA considered the joint bidding of two manufacturers, Kedrion and Grifols, for the contracts for the supply of plasma derived to the health system of the region of Emilia Romagna (HSER). The temporary association of undertakings set up by Kedrion and Grifols (RTI) was the awardee of the supply contract. As is known, temporary associations of undertakings can be lawfully used for jointly bidding if its members cannot qualify for make single bids. However, in the case I819 the ICA had concern that the joint bidding of Kedrion and Grifols through RTI was anticompetitive. Due to their portfolio of products, both Kedrion and Grifols could make individual bids. Incidentally, Kedrion was the leading producer of plasma derived drugs in Italy. Moreover, Kedrion and Grifols were linked by many cooperation and marketing agreements, especially in the US. For these reasons, the ICA believed that the parties did not set up RTI to bid for the public contracts but rather to eliminate price competition between them in the tender procedure organized by HSER. Without this agreement, the parties should have quoted lower prices than those included in the winning bid. Then, the conducts of the parties would lessen competition in sector where it was weak due to high entry barriers. 

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