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The OFT has today issued a decision finding that Hamsard 3149 Limited (Hamsard), its subsidiaries Quantum Pharmaceutical Limited (Quantum) and Total Medication Management Services Limited (trading as Tomms Pharmacy - 'Tomms'), together with Celesio AG and its subsidiary Lloyds Pharmacy Limited (Lloyds), have infringed competition law by entering into a market sharing agreement in relation to the supply of prescription medicines to care homes in England. 

Today's decision brings the investigation to a close and is the final administrative stage following an earlier settlement agreement in December 2013.

The OFT also today imposed a fine of £370,226 on Hamsard and its subsidiaries. 

Lloyds brought the matter to the OFT's attention and, under the OFT's leniency policy, has not been fined.

The OFT found that under this market sharing agreement, the companies agreed that Tomms would not supply prescription medicines to existing Lloyds' care home customers between May 2011 and November 2011. In return, for at least some of the time, Lloyds also agreed not to supply prescription medicines to existing Tomms' care home customers.

Ann Pope, OFT Senior Director, Services, Infrastructure and Public Markets Group, said:

'The two firms involved have admitted entering into a cartel. Market sharing is a serious breach of competition law which in this case reduced competition for the supply of prescription medicines to some care homes.'

NOTES

1. For more information see the case page.
2. The Chapter I prohibition of the Competition Act 1998 prohibits, among other things, agreements or concerted practices between undertakings that have the object or effect of preventing, restricting or distorting competition in the UK or a part of it and which may affect trade in the UK or a part of it.
3. In January 2014 the OFT issued a Statement of Objections giving notice of a proposed infringement decision under the Competition Act 1998 to the parties under investigation. 
4. In December 2013, Hamsard agreed to pay a maximum fine of £387,856. This penalty was reduced from £646,426, the maximum amount for such a breach, owing to the company's admission and agreement to co-operate with the OFT.
5. In March 2014 the OFT granted a further discount to Hamsard in respect of its competition compliance programme, reducing the fine payable to £370,226. 
6. In calculating financial penalties, the OFT takes into account a number of factors including the seriousness of infringement, the relevant turnover and any mitigating and/or aggravating factors. The basis of the OFT's considerations are set out in OFT's guidance as to the appropriate amount of a penalty.
7. Under the OFT's leniency policy an undertaking may be granted immunity from penalties or a significant reduction in penalty in return for reporting certain categories of Competition Act infringement and assisting the OFT with its investigation. 
8. The full decision will be published later this year following the redaction of commercially sensitive information.
9. On 1 April 2014 the Competition and Markets Authority (CMA) will become the UK's lead competition and consumer body. The CMA will bring together the existing competition and certain consumer protection functions of the Office of Fair Trading and the responsibilities of the Competition Commission, as amended by the Enterprise and Regulatory Reform Act 2013.