Law

Zero tolerance for pharmaceutical monopoly behavior in public supervision. In the first half of the year, the anti-monopoly fines in the pharmaceutical industry amounted to 623 million yuan

2025-09-19   

In the first half of this year, China's market regulatory authorities held high the sword of anti-monopoly, gathered efforts to regulate the "prescription" for the people, cleared the "heart troubles" of the public in medicine, enhanced the "immunity" of enterprises to competition and compliance, used real measures to solve people's worries, and improved the "happiness index" of the people with the warmth of the people's livelihood. Hot topics focus on commonly used drugs, low-priced drugs, and life-saving drugs, which are closely related to the health of the people. Monopoly cases have been punished to individuals, with a fine of 623 million yuan and a decrease in drug prices of over 60%... Recently, it was learned from the State Administration for Market Regulation that in the first half of this year, China's market supervision departments have wielded the sword of anti-monopoly, gathered efforts to regulate and prescribe drugs for the people, cleared the "worries" of the public about medical drugs, enhanced the "immunity" of enterprises to competition and compliance, solved people's worries with real recruitment and practical measures, and improved the "happiness index" of the people with the warmth of the people's livelihood. Promoting a significant decrease in drug prices and providing medical care for the sick is a fundamental need of the people for a better life. The monopoly of commonly used drugs, low-priced drugs, and life-saving drugs has led to shortages of some drugs and skyrocketing drug prices, becoming a pressing concern for the public. As a key foundation for the production of formulations, the concentration of the raw material drug market is high, and the harm caused by monopolistic behavior is enormous. The price increase and shortage of raw materials are the root cause of the price increase and shortage of emergency drugs. To break the stubborn problem of pharmaceutical monopoly and lower the prices of commonly used drugs, low-priced drugs, and life-saving drugs, market regulatory departments must fight every inch to achieve this goal. According to the penalty decision of relevant law enforcement and regulatory departments, from February 2022 to March 2024, Jinyao Pharmaceutical, Zhejiang Xianju, Jiangsu Lianhuan, and Xi'an Guokang Ruijin jointly increased the sales price of dexamethasone sodium phosphate raw material from 8000 yuan/kg to 13000 yuan/kg. This operation directly led to a 282 fold increase in the specific drug, dexamethasone sodium phosphate injection, used to treat severe patients with COVID-19, from 0.35 yuan per tube to 98.76 yuan per tube. Under the designated jurisdiction of the State Administration for Market Regulation, the Tianjin Municipal Commission for Market Regulation has lawfully investigated and dealt with price monopoly behaviors reached and implemented by Jinyao Pharmaceutical, Zhejiang Xianju, Jiangsu Lianhuan, and Xi'an Guokang Ruijin. The final price of dexamethasone sodium phosphate injection was reduced from 7.2 yuan to 0.45 yuan, a decrease of nearly 94%. Not only that, a series of major cases, such as the monopoly agreement case of sulfamethoxazole injection (a commonly used drug in anesthesia surgery) and the monopoly case of magnesium trisilicate raw material (used for neutralizing stomach acid, protecting ulcer surface, etc.), which have received widespread attention in society, have also been investigated. These law enforcement cases have restored the market competition mechanism involving the "life-saving drugs" of the general public, restored market order, and restored normal supply of related drug raw materials, ultimately leading to a "double reduction" in patient medication costs and medical insurance expenditures. The relevant person in charge of the State Administration for Market Regulation stated that they will continue to increase anti-monopoly law enforcement efforts in the pharmaceutical industry, make every effort to promote the investigation and handling of major monopoly cases in the fields of shortage drugs and emergency drugs, and maintain a high-pressure situation of "sharp swords hanging high". The market regulatory authorities have sent a strong regulatory signal by seriously investigating and punishing monopoly cases in the pharmaceutical industry, insisting on putting the people first and having 'zero tolerance' for pharmaceutical monopoly behavior. ”Professor Jin Shanming from the Law School of the University of Chinese Academy of Social Sciences pointed out that this will help regulate the competition order in the pharmaceutical market, create an orderly market competition atmosphere that dare not monopolize, cannot monopolize, and does not want to monopolize, promote innovation and technological progress in the pharmaceutical industry, enable patients to obtain necessary therapeutic drugs at more reasonable prices, and effectively protect the vital interests and basic medical needs of patients. Accountability and fair competition are the core and soul of a market economy. In the pharmaceutical industry, there are many operating entities with complex business models, long industrial chains, and multiple links. Antitrust supervision faces great challenges and difficulties. Take action at critical moments and exert force in critical areas. Under the guidance of the State Administration for Market Regulation, market supervision departments in various regions have launched special anti-monopoly law enforcement actions in the field of people's livelihood for three consecutive years, focusing on six key areas including medicine, public utilities, funeral services, and industry associations. They have strengthened anti-monopoly supervision and law enforcement, vigorously rectified market monopoly chaos, effectively safeguarded the rights and interests of operators and consumers, created a fair competition environment, and worked hard to solve problems for the vast number of business entities. Market regulatory departments in various regions have identified the pharmaceutical industry as one of the key areas of the special anti-monopoly law enforcement campaign for people's livelihoods, and have launched a "combination punch" with multiple measures. It is reported that since 2018, China's market regulatory authorities have successively imposed source penalties on enterprises engaged in monopolistic behavior related to raw materials and high-value dental consumables closely related to people's livelihoods, such as calcium gluconate, bromhexine hydrochloride, fluoxetine acetate, camphor, phenol, and chlorfenapyr. Among them are well-known pharmaceutical companies such as Xiansheng Pharmaceutical, Northeast Pharmaceutical, and Yangtze River Pharmaceutical. According to data disclosed by the State Administration for Market Regulation, following the investigation and punishment of 7 pharmaceutical monopoly cases with a fine of 1.77 billion yuan in 2023, the market supervision department will handle 5 more pharmaceutical monopoly cases with a fine of 623 million yuan in the first half of 2025. In March of this year, the Shanghai Municipal Administration for Market Regulation, in accordance with the jurisdiction designated by the State Administration for Market Regulation, imposed administrative penalties on three pharmaceutical companies including Shanghai Xinyi United, ordering them to stop illegal activities, confiscating illegal gains and imposing a total fine of 223 million yuan, and imposing a fine of 500000 yuan on relevant personnel. For the first time, individual responsibility for reaching a monopoly agreement was pursued. Three months later, the Tianjin Municipal Market Supervision Commission, in accordance with the jurisdiction designated by the State Administration for Market Regulation, imposed administrative penalties on the natural person Guo for organizing and implementing monopoly agreements with four pharmaceutical companies, including Jinyao Pharmaceutical. The four companies were fined a total of 355 million yuan for their illegal gains, and relevant personnel were fined 600000 yuan respectively; A fine of 5 million yuan has been imposed on organizer Guo, and for the first time, legal responsibility for the monopoly agreement organizer has been pursued. The relevant person in charge of the Anti Monopoly Law Enforcement Department of the State Administration for Market Regulation pointed out that the above-mentioned monopoly cases are "punished to individuals", and the organizers and executives are held accountable, achieving a triple punishment of "enterprise+organizer+responsible person". While imposing maximum penalties on natural persons and involved enterprises with malicious nature, we also adhere to a balance of leniency and severity, and reduce penalties for parties who voluntarily provide evidence in accordance with the law. Assisting in the acceleration of competition compliance, anti-monopoly law enforcement not only corrects harmful competition behaviors that have occurred and actively restores market competition order, but also promotes innovation and enhances people's well-being through competition. On January 23, 2025, the State Council Anti Monopoly and Anti Unfair Competition Commission issued the "Anti Monopoly Guidelines for the Pharmaceutical Industry", providing clear and concise guidance for anti-monopoly law enforcement and operator compliance in the pharmaceutical industry. The anti-monopoly supervision work in the pharmaceutical field is related to the public interest and the vital interests of the people. ”In the view of Professor Meng Yanbei from the Law School of Renmin University of China, the release of the above guidelines plays an important role in maintaining a fair competition order in the pharmaceutical industry and promoting high-quality development of the pharmaceutical industry. Law enforcement is the best way to popularize the law. The effective investigation and handling of one pharmaceutical monopoly case after another has greatly deterred illegal operators. The relevant person in charge of Shanghai Xinyi United stated that the company has actively taken relevant measures, improved the institutional system, and deepened compliance training; Comprehensively investigate risks and strengthen compliance mechanisms; Optimize operational models, increase investment in innovation, and focus on building a sustainable development pattern with core competitiveness. Jinyao Pharmaceutical announced that it will "improve the anti-monopoly compliance system, embed the anti-monopoly compliance system into daily processes; conduct compliance self inspections and optimize and adjust business processes; carry out anti-monopoly compliance training, and continuously strengthen the anti-monopoly compliance awareness of all employees". In response to the industry's chronic problems exposed in anti-monopoly law enforcement in the pharmaceutical field, market regulatory authorities have pushed the governance threshold forward, shifting from "painful punishment" to "strong defense" full chain supervision, setting up anti-monopoly compliance lectures, and helping enterprises accelerate competition compliance. Professor Ding Maozhong from the School of Economics and Law at Shanghai University of Political Science and Law reminded pharmaceutical industry practitioners at the anti-monopoly compliance lecture that "from the cases of refusal and obstruction of investigations by relevant enterprises announced by the State Administration for Market Regulation, strengthening competition compliance has become a 'survival item' for enterprises, and it is necessary to enhance the 'immunity' of anti-monopoly compliance and effectively build their own core competitiveness." Pharmaceutical practitioners who participated in the compliance lecture expressed that "the training covers the latest anti-monopoly regulations and guidelines in the pharmaceutical field, and through real case analysis of the consequences of violations, it has strong pertinence and guidance. It is really rewarding." Enterprises will improve their anti-monopoly compliance system, carry out compliance self-examination and optimize business processes, enhance anti-monopoly compliance awareness, and focus on building. A sustainable development pattern with core competitiveness. The health of the people is the foundation of a nation. The market supervision department stated that it will thoroughly implement the decisions and deployments of the Party Central Committee and the State Council, accelerate the construction of a unified national market, continuously strengthen anti-monopoly supervision and law enforcement in the pharmaceutical industry, focus on improving the efficiency of supervision for the people, build a defense line to maintain fair competition market order, inject competitive compliance power into the high-quality development of the pharmaceutical industry, and contribute market supervision strength to safeguard the health of billions of people. (New Society)

Edit:Wang Shu Ying Responsible editor:Li Jie

Source:Rule of Law Daily

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