Anti-monopoly Office Imposes €8-million Fine for Medicine-supply Cartel

       Bratislava, 24 February (TASR) - The Anti-monopoly Office (PMU) has imposed a fine of almost €8 million for a cartel set up between two major medicine suppliers in a public procurement for state-run health-insurance company VsZP, PMU representatives announced at a news conference on Tuesday, adding that the office's decision isn't yet final.
        The companies concerned are PHOENIX Zdravotnicke zasobovanie and Transmedic Slovakia, the latter one in bankruptcy, which coordinated their conduct in electronic auctions.        
        "It's a cartel agreement between two major players concerning supplies for VsZP. This is the first case in PMU's history to have been initiated and, in essence, concluded, so far at first instance, based on a whistleblower motion filed by an employee of one of the firms, who provided evidence of a cartel agreement," explained PMU vice-chair Peter Demcak.
        "The cartel agreement involved a coordinated procedure by the firms in VsZP public procurements for the supply and distribution of categorised medicines to pharmacies. These were medicines intended for treating cancer-related, neurological, immunological and inflammatory diseases. The cartel agreement lasted from December 2017 until September 2020," specified PMU's cartel department director Juraj Syrny. According to him, the cartel agreement didn't concern procurements or any practices in relation to other health-insurance companies.
        According to Jakub Zeman of PMU's cartel department, the aforementioned firms agreed on which of them would win which tender. "At the same time, we managed to obtain documents and information showing that the firms mutually compensated each other for profits and losses from public procurements," stated Zeman.
        According to Syrny, PMU originally intended to impose a fine of €10.8 million on PHOENIX Zdravotnicke zasobovanie and a three-year ban on taking part in public procurement processes. "Given that the firm used a settlement procedure, admitted to violating the law and concluding a cartel agreement, and didn't challenge PMU's conclusions, the office reduced the fine by 30 percent, to over €7.5 million. At the same time, it banned the firm from taking part in a public procurement for a period of one year," added Syrny.
        Concerning Transmedic Slovakia, PMU imposed a fine amounting to over €200,000 on it with regards to the fact that it is undergoing bankruptcy. At the same time, it banned the firm from taking part in a public procurement for three years, said Syrny.
        VsZP responded to TASR that it had no knowledge of the existence of any cartel agreement or coordinated action by the bidders. It stated that it hadn't identified any facts in the process that would indicate even a suspicion of a violation of the law. The insurance company provided full cooperation to PMU during the investigation.
        "VsZP always proceeds strictly in accordance with the Public Procurement Act when procuring medicines. This is also what makes it unique compared to private health insurance companies," said the insurer. According to VsZP, public procurement for the supply of medicines between 2017-2020 was carried out as public above-threshold contracts with electronic auctions. "The aim of this procedure is to strengthen competition and achieve the most economically advantageous offer," it noted.