Red Star Capital Bureau reported on June 5, according to the official website of the State Administration for Market Regulation, since the launch of the special anti-monopoly law enforcement operation in the field of people's livelihood in 2023, it has concentrated on investigating and handling a number of major typical monopoly cases.
Red Star Capital Bureau noted that according to some typical cases newly released by the State Administration for Market Regulation, a number of listed pharmaceutical companies have been exposed.
Price monopoly on contraceptives
Zizhu Pharmaceutical was fined 12.6436 million
On May 24, 2023, the Beijing Municipal Administration for Market Regulation made a penalty decision on Beijing Zizhu Pharmaceutical Operation Co., Ltd. (hereinafter referred to as Zizhu Pharmaceutical) for reaching and implementing a monopoly agreement in accordance with the law, ordered Zizhu Pharmaceutical to stop its illegal activities, and imposed a fine of 12.6436 million yuan on its 2020 domestic sales in China.
On September 1, 2021, the Beijing Municipal Bureau for Market Regulation opened a case for investigation into Zizhu Pharmaceutical's suspected behavior of reaching and implementing a monopoly agreement based on the clues reported by the masses and after preliminary verification. The commodities involved in this case are Jin Yuting and Yuting (levonorgestrel tablets 1.5mg, levonorgestrel tablets 0.75mg*2), both oral emergency contraceptives. After investigation, from 2015 to 2021, Zizhu Pharmaceutical reached a monopoly agreement with primary distributors and secondary distributors nationwide in the form of signing agreements, issuing price adjustment letters and commitment letters to fix and limit the price of drugs sold by distributors, and implemented monopoly agreements on fixed prices and limited prices by refining the sales management system, entrusting data companies to monitor the sales prices of distributors, and strengthening internal supervision. Zizhu Pharmaceutical's conduct violated the provisions of Article 14 (1) and (2) of the Anti-Monopoly Law before the amendment.
In this case, Zizhu Pharmaceutical's price-monopolistic behavior hindered the normal functioning of the market price mechanism, undermined the order of market competition, and detracted from the interests of consumers. The Beijing Municipal Bureau for Market Regulation investigated and dealt with this case in accordance with the law, promptly corrected illegal acts, better facilitated the public's access to safe and effective reproductive health services, enhanced the people's sense of happiness, and safeguarded fair market competition and consumer interests.
According to the official website of CR Zizhu, Zizhu Pharmaceutical is a marketing company set up by CR Zizhu in Beijing, and CR Zizhu is in turn CR Pharmaceutical (03320. HK) is a well-known brand.
Reached and implemented a monopoly agreement with Wuhan Huihai
Grand Pharma was fined $285 million
On May 21, 2023, the State Administration for Market Regulation issued a lawful agreement on Grand Pharma (00512. HK) (China) Co., Ltd. (hereinafter referred to as Grand Pharma) and Wuhan Huihai Pharmaceutical Co., Ltd. (hereinafter referred to as Wuhan Huihai) reached and implemented a monopoly agreement and abused its dominant market position, and made an administrative penalty decision, ordering Grand Pharma and Wuhan Huihai to stop their illegal conduct, confiscating 149 million yuan of illegal gains against Grand Pharma, and imposing a penalty of 3% of its 2019 sales in China The fine was 136 million yuan, with a total of 285 million yuan in fines and confiscations; 30.9248 million yuan of illegal gains were confiscated from Wuhan Huihai, and a fine of 4.1268 million yuan was imposed on 2% of its sales in China in 2019, with a total of 35.0516 million yuan in fines and confiscations.
Based on the clues found, the State Administration for Market Regulation opened a case for investigation on November 6, 2020 against Grand Pharmaceutical and Wuhan Huihai for suspected monopolistic behavior. The commodities involved in this case are norepinephrine API and epinephrine API, which are used in the production of norepinephrine injection for the treatment of acute myocardial infarction and epinephrine hydrochloride injection for the rescue of cardiac arrest, respectively.
From June 2016 to July 2019, the two parties reached and implemented a monopoly agreement on the sale of norepinephrine APIs and epinephrine APIs, agreeing that Wuhan Huihai would stop selling the above two APIs and that Grand Pharma would compensate them, in violation of Article 13.1.2 of the Anti-Monopoly Law before the amendment. At the same time, it was found that the relevant market in this case was defined as China's norepinephrine API market and epinephrine API market, and Grand Pharma had a dominant market position, and from May 2010 to April 2021, it abused its dominant market position and required the preparation enterprises to accept unreasonable trading conditions such as selling norepinephrine injection and epinephrine hydrochloride injection at a low price, rebating them, and selling preparations according to the region and price required by the relevant preparation enterprises, in violation of the pre-amendment Article 17, paragraph 1 (5) of the Anti-Monopoly Law.
The two APIs involved in this case were used in the production of norepinephrine injection and epinephrine hydrochloride injection, respectively, both of which are national essential drugs, medical insurance drugs and clinically necessary emergency rescue drugs. The actions of Grand Pharma and Wuhan Huihai have eliminated and restricted competition in the relevant API and preparation markets, harmed the legitimate interests of relevant preparation enterprises, led to the price of related preparations rising year by year and frequent shortages, affected the normal use of drugs by patients, and increased the cost of medication for patients and the expenditure of national medical insurance. The State Administration for Market Regulation investigated and dealt with this case in accordance with the law, promptly corrected illegal acts, restored the market order of fair competition, and effectively safeguarded the interests of consumers and the public interest.
Increase the price of related anti-tumor drugs by more than 8 times
Tianjin Jinyao was fined 27.72 million
On March 14, 2023, the Tianjin Municipal Commission for Market Regulation issued a new agreement on Jinyin Pharmaceutical (600488. SH) subsidiary Tianjin Jinyao Pharmaceutical Co., Ltd. (hereinafter referred to as Tianjin Jinyao) abused its dominant market position and made an administrative penalty decision, ordered Tianjin Jinyao to stop the illegal behavior, and imposed a fine of 27.7213 million yuan on its 2019 annual sales.
On September 24, 2020, the Tianjin Municipal Commission for Market Regulation opened an investigation into Tianjin Jinyao's suspected monopolistic behavior based on the clues assigned by the State Administration for Market Regulation. The commodity involved in this case is carmustine injection, which is an anti-tumor drug used to treat brain tumors, meningeal leukemia, malignant lymphoma and multiple myeloma. From June 2017 to September 2020, Tianjin Jinyao abused its dominant market position and increased the price of carmustine injection beyond the normal range from 100~245 yuan / unit to a maximum of 1680 yuan / unit under the condition that the cost was basically stable, which undermined the market competition order, resulting in a shortage of carmustine injection, and a significant increase in the cost of medication for patients, violating the Anti-Monopoly Law before the amendment Article 17, paragraph 1 (a).
Carmustine injection is an essential drug and national medical insurance drug for autologous hematopoietic stem cell transplantation in patients with malignant lymphoma, and has important value for the life and health of patients. The investigation and handling of this case has effectively safeguarded the fair competition order of the carmustine injection market, and at the same time safeguarded the interests of consumers and the social public interest.
Edited by Yang Cheng
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