The Competition Commission of Pakistan has imposed a Rs 42 million penalty on United Distributors Pakistan Ltd (UDPL) and International Brands Pvt Ltd (IBL) for engaging in a non‑compete agreement that violated competition laws within Pakistan’s pharmaceutical distribution sector. Under the arrangement, UDPL agreed to refrain from pharmaceutical distribution for three years in exchange for Rs 1.131 billion in compensation from IBL, effectively eliminating competition.

This arrangement was deemed an illegal market‑sharing pact, creating significant barriers for other distributors, thereby reducing choice and increasing prices for consumers. The CCP’s investigation concluded that the deal contravened Sections 4(1) and 4(2)(b) of the Competition Act, 2010, which prohibit restrictive agreements.

Both companies failed to seek prior exemption from the CCP, instead attempting to justify compliance only after show‑cause notices in mid‑2024, a move ruled insufficient by the commission. The CCP imposed a Rs 20 million fine on each company, with an additional Rs 1 million penalty levied on UDPL for mandatory non‑compliant disclosure to the stock exchange. The commission has ordered both companies to submit compliance reports within 30 days and warned that a breach could trigger further daily fines.

This action sends a clear message that anti-competitive agreements in critical sectors like pharmaceuticals will not be tolerated, reinforcing the CCP’s mandate to protect consumer welfare and maintain a level playing field in Pakistan’s market.