The State Office Of The CPC Central Committee Issued A Document "Naming" The Upgrading Of Anti-Monopoly In The Field Of Domestic API

Recently, the office of the CPC Central Committee and the State Council printed and issued the action plan for building a high standard market system, which clearly put forward the need to strengthen and improve the law enforcement of anti-monopoly and anti unfair competition, formulate anti-monopoly guidelines and exemption system application guidelines in special fields such as API, and issue guidelines for the implementation of overseas anti-monopoly compliance of enterprises.

On the day before the introduction of the plan, the State Administration of Market Supervision issued a fine of 100 million yuan for Xiansheng pharmaceutical. After three calcium gluconate API distribution enterprises were fined 320 million yuan in 2020, the state once again strengthened the supervision of API industry.

In recent years, some pharmaceutical enterprises take advantage of market monopoly, or manipulate prices to make exorbitant profits, or attach unreasonable trading conditions for unfair competition. Feng Yongqiang, executive director and partner of Jiangsu Yicheng law firm and doctor of law of Nanjing University, pointed out to the 21st century economic reporter that the above plan shows that the state is strengthening anti-monopoly efforts, expanding the main objects of anti-monopoly from general fields to professional subdivisions, enriching the relevant legal system and enhancing the operability of law enforcement.

In the view of Shi lichen, founder of Beijing Dingchen pharmaceutical management consulting center, in the case of domestic API monopoly behavior repeatedly prohibited, we should increase the intensity of punishment, and even put monopoly and other acts that seriously disrupt the market order into punishment. However, Shi lichen pointed out that the root cause of API monopoly is the scarcity of domestic API approval documents under the background of the original API registration system, which makes the monopoly easy to form. The implementation of API record system can fundamentally solve the problem of API monopoly.

New year's first anti monopoly case with a fine of 100 million yuan

On January 29, the state market supervision and Administration Bureau issued a decision on administrative punishment in the case of Xiansheng pharmaceutical abusing its dominant position in the sales market of batroxobin concentrated liquid bulk drug (hereinafter referred to as batroxobin API) in China by abusing its dominant position in the sales market of batroxobin crude drug concentrate (hereinafter referred to as batroxobin API), and refused to trade with the trading counterpart without proper reasons, thus eliminating market competition and damaging the market Consumer interests. Xiansheng pharmaceutical will be fined 2% of the sales volume of 5.036.7 billion yuan in 2019, a total of 107 million yuan.

Worldwide, DSM Nutritional Products Ltd branch pentapharm, Switzerland is the only manufacturer of batroxobin API. In April 2019, Xiansheng pharmaceutical and DSM pentapharm signed the cooperation and supply agreement, and DSM pentapharm exclusively supplied batroxobin API in China.

According to the administrative punishment decision, Xiansheng pharmaceutical controlled the sales market of Batroxobin in China through the above methods. Since November 2019, downstream pharmaceutical enterprises have repeatedly inquired about batroxobin by mail, letter, oral and other forms, hoping to purchase batroxobin API. The downstream preparation enterprises of Xiansheng Pharmaceutical Co., Ltd. are faced with numerous lawsuits, heavy debt burden, have been included in the dishonest executee, and need to be interviewed, and so on, they always refuse to quote.

According to the administrative penalty decision, since February 2020, the legal representatives of downstream preparation enterprises have interviewed relevant persons in charge of Xiansheng pharmaceutical for many times. However, Xiansheng Pharmaceutical Co., Ltd. has proposed to purchase the equity of downstream preparation enterprises, taking batroxobin API supply as part of equity negotiation, and not selling batroxobin API separately. Since then, Xiansheng pharmaceutical has not offered and supplied batroxobin raw materials to downstream preparation enterprises, resulting in the shutdown of downstream preparation enterprises from June 2020, and Batroxobin injection can not be stably supplied.

Shi lichen pointed out that the production of batroxobin API has its particularity, some raw materials can only be produced in Brazil, and Xiansheng Pharmaceutical Co., Ltd. controls downstream preparation enterprises to solve its own "neck sticking" problem.

In addition to Xiansheng pharmaceutical, many pharmaceutical enterprises have been punished for anti-monopoly. In April 2020, the State Administration of market supervision made an administrative punishment decision on the illegal behaviors of Shandong Kanghui pharmaceutical, Weifang taiyangshen medicine and Weifang puyunhui pharmaceutical for abusing their dominant market position. Due to the monopoly of calcium gluconate for injection by the above three companies, the supply of calcium gluconate injection was in short supply and the price rose sharply. The three companies were fined 325.5 million yuan. This is also the biggest penalty in anti-monopoly cases in the field of API since the implementation of the anti-monopoly law.

The anti-monopoly efforts against API have been continuously strengthened

? ? ? In fact, the problem of drug substance monopoly has a long history. Previously, the relevant person in charge of the national development and Reform Commission pointed out in an interview with the media that as early as around 2010, the national development and Reform Commission had noticed the problem of drug substance monopoly and started to investigate the monopoly situation of Shandong Weifang Shuntong Pharmaceutical Co., Ltd.; in 2011, the national development and Reform Commission issued a fine on the company, which is also the national development and Reform Commission in medicine The industry is also the first anti-monopoly penalty in the field of API.

At that time, the domestic drug anti-monopoly was still in the exploratory stage, and then the relevant policies were further improved.

Following the "price behavior guide for short supply drugs and API operators" issued by the national development and Reform Commission in 2017, the State Administration of market supervision and Administration issued the anti-monopoly guidelines in the field of APIs (Draft for comments) (hereinafter referred to as the "guidelines") on October 13, 2020.

? ? In fact, the above-mentioned guide is to prevent and stop the monopoly behavior in the field of API, and guide the operators in the field of API to operate in compliance with laws and regulations. The guide has six chapters and 22 articles, which defines and regulates the illegal monopoly activities in the field of API in detail, aiming to promote the healthy development of the API industry, maintain the market competition order in the field of API, and protect the interests and society of consumers To prevent and stop monopoly in the field of API.

The document explains and explains the exemption conditions and conditions of the anti-monopoly law in the field of API, including the prohibition of horizontal monopoly agreement, prohibition of vertical monopoly agreement and monopoly agreement. At the same time, in the guide, the most concerned issues in the industry, such as how to define the relevant market, whether the operator has the abuse of market dominance in the relevant market, and whether the definition constitutes the abuse of market dominance behavior, are also responded and interpreted in the guide.

Feng Yongqiang pointed out to the 21st century economic reporter that China's anti-monopoly work has been carried out since the promulgation of the anti unfair competition law in the 1990s. After the implementation of the anti-monopoly law in 2008, the legal basis, regulatory object and regulatory means of anti-monopoly work have become more clear, and a lot of illegal monopoly behaviors have been dealt with. "The" action plan for building a high standard market system "issued by the central government office and the State Council is a step up by the state to strengthen anti-monopoly efforts, mainly expanding the main objects of anti-monopoly from general fields to professional subdivisions, enriching the relevant legal system and enhancing the operability of law enforcement. In order to improve the effect of market economy, we should further build a sound institutional foundation. "

A senior person in the industry who has long been concerned about the problem of API monopoly introduced to the 21st century economic report that the previous monopolies in the domestic API industry mostly occurred in small products, with a small volume and limited impact on enterprises. Therefore, from the perspective of anti-monopoly punishment, the fines of related enterprises were not high.

However, in recent years, drug monopoly events such as chlorpheniramine, glacial acetic acid and calcium gluconate occur frequently, which leads to the price rise of raw materials, which leads to the production suspension of some drugs and the shortage of clinical use. For example, the price of chlorpheniramine once rose from 400 yuan per kilogram to 23300 yuan per kilogram, a 58 fold increase in a month.

In August 2019, Chen Jinfu, deputy director of the State Medical Insurance Bureau, publicly said: "some drugs or API production links are highly concentrated, and the distribution channels of API are easy to be controlled, and illegal profit-making can be achieved through monopoly control."

"At present, the monopoly of API has a greater and greater impact on people's drug use. In fact, API is of great significance to the pharmaceutical industry. It is an effective component of drugs. Only after certain preparation can these ingredients become drugs for clinical application. In particular, after the pilot project of "4 + 7" procurement with volume, more APIs may be monopolized in the future, and preparations will be more affected. " A person in charge of a listed pharmaceutical company told the reporter of the 21st century economic report.

On January 28, the general office of the State Council issued the opinions on promoting the normalization and institutionalization of centralized drug procurement, making important arrangements for the normalization and institutionalization of centralized drug procurement in the next step.

At the State Council's regular policy briefing held on January 29, Cui Hao, head of the drug regulatory department of the State Food and drug administration, explained the above opinions, pointing out that enterprises may face uncertainties such as rising prices of API and excipients after winning the bid.

In Shi lichen's opinion, in recent years, the anti-monopoly of API in China has been strengthened, which is conducive to the development of the whole pharmaceutical industry, and can also promote enterprises to become more and more compliant.

At the same time, Mr. Shi also admitted that in the API industry, the horizontal monopoly caused by the joint agreement and collusion of several enterprises is more common, and this behavior is more hidden, which increases the difficulty of anti-monopoly investigation. Therefore, on the one hand, we should strengthen supervision and law enforcement, on the other hand, we should change the supply and demand structure of API Market from the source, and stimulate reasonable market competition. "The structural concentration of API Market and the shortage of supply and demand are the prerequisite factors for monopoly behavior. However, the problem of sticking neck is that the number of approval documents for API is limited, the approval cycle is long, and the number of approval documents grows slowly. "

Feng Yongqiang stressed to the 21st century economic reporter that the monopoly formed due to market and technical reasons is not illegal. "Antitrust is not against monopoly itself, but against the effect of restricting market competition caused by monopoly."

"As far as the pharmaceutical industry is concerned, the state's anti-monopoly should not be regarded as a shackle. In fact, it is reasonable to have monopoly advantages in specific subdivision areas through the normal operation of enterprises or excellent technology. However, pharmaceutical enterprises should not regard monopoly advantages as chips to achieve the purpose that cannot be achieved through market rules. In this state of mind, strengthening the anti-monopoly efforts of the state will not damage the interests of pharmaceutical enterprises Feng Yongqiang pointed out.

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