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Antitrust Headache

DW staff (sms)October 11, 2007

German antitrust authorities have searched pharmaceutical company Bayer's offices in connection with allegations it fixed prices with over 11,000 German pharmacies.

Two fingers hold a pill marked aspirin
Bayer is accused of squeezing customers in an alleged deal with pharmacies

Officials from the German Federal Cartel Office searched sites belonging to Bayer Vital, the chemical group's medicine distribution division, in the western German cities of Leverkusen and Cologne, the office said.

The raid was the result of "suspicion that Bayer had influenced the retail price of its products in pharmacies in an uncompetitive manner," the office said in a statement, adding the goal of the raids was to "secure relevant documents."

A Bayer spokesman said the company has fully cooperated with the investigation.

"We provided full cooperation to office staff who came to clear up" allegations the group had already rejected, the spokesman told the AFP news agency on Wednesday, Oct. 11. "We obviously have recommended prices that are not binding, but in no case do we have price agreements that violate the law."

Discounts for high prices

Aspirin boxes in three sizes and languages
Bayer wanted to position itself as a premium drug maker, the e-mail reportedly saidImage: Bayer

According to a report in the magazine Stern, Bayer was suspected of providing rebates of up to 3 percent to 11,000 German pharmacists who maintained elevated prices for aspirin and other products.

European and German laws prohibit such practices, which can be punished with fines of up to 2.9 billion euros ($4.1 billion), Silke Kaul, a spokeswoman for the antitrust agency, told the Associated Press.

The weekly Stern newsmagazine quoted an e-mail from a Bayer-Vital manager dated Dec.30, 2006 that allegedly reminded a salesman that rebates would be approved "only if the rules of the game are respected."

The "rules" are reported to have been sales on medicine that lasted longer than four weeks or discounted certain Bayer products by more than 20 percent off the recommended retail price.

Cartel history

Germany lifted uniform pricing for non-prescription medicines in 2004, and Bayer has been the target of price-fixing probes in the past.

In the pharmaceutical sector, the German group was found guilty in 2005 by Portuguese authorities of fixing prices on medication supplied to 22 hospitals.