Behind Ali's 18.2 billion huge fine, pharmaceutical anti-monopoly forces the entire industry to comply with regulations!

Medical News, April 12, April 10, the State Administration for Market Regulation "overtime" issued a notice that shocked four people.
The closely watched Alibaba’s “choice of two” monopoly in the domestic online retail platform service market was subject to administrative penalties.
The State Administration of Market Supervision ordered Alibaba Group to stop illegal activities and impose a fine of 4% of its domestic sales in 2019.
18.
228 billion yuan, equivalent to about one week of Alibaba's 2021 fiscal year Q3 net profit, this is also the largest fine ever issued by China's anti-monopoly authorities, and the country is increasingly strengthening anti-monopoly efforts.

 

In fact, in the pharmaceutical industry, the monopoly of the pharmaceutical market in recent years has not only become the focus of anti-monopoly law enforcement and justice in developed countries and regions such as Europe and the United States, but has also become a problem that China needs to pay attention to and solve.
A few days ago, Tianyao Co.
, Ltd.
issued an announcement stating that it intends to be fined 44.
02 million yuan for being suspected of monopolizing fluocinolone acetoacetate APIs.
The fine will have an impact on Tianyao's 2020 performance.
After receiving the fine, Tianyao will lower its 2020 net profit forecast.

 

Anti-monopoly of APIs has become a regulatory focus

 

According to the “Annual Report on China’s Anti-Monopoly Law Enforcement (2019)” issued by the State Administration for Market Regulation at the end of 2020, there were 6 cases investigated in 2019 in the API industry.
The State Administration for Market Supervision takes anti-monopoly enforcement in the field of APIs as its work.
The top priority.

 

The fluocinolone acetate involved in this case is a glucocorticoid.
It is reported that the Tianjin Municipal Market Supervision Commission believes that Tianyao has divided the sales market of fluocinolone acetonate raw materials in the form of agreement, changed and fixed the price of fluocinolone acetonide raw materials, and eliminated restrictions on competition in the sales field of fluocinolone acetonide raw materials, and violated relevant regulations.
Provisions belong to the act of reaching and implementing a monopoly agreement on "fixing or changing commodity prices" and "dividing the sales market or raw material procurement market".
The company has more than 40 varieties of Methsone series, prednisone series, methylprednisolone series, etc.
, and is in an advantageous position in the industry competition.
The product characteristics of corticosteroids and the special requirements of industry management make it difficult to enter, and the concentration of production is high.

 

Looking back further, the monopoly of the API industry has appeared before.

 

In 2011, Shandong Weifang Shuntong Pharmaceutical Co.
, Ltd.
and Weifang Huaxin Pharmaceutical Trading Co.
, Ltd.
were fined 6.
877 million yuan and 152,600 yuan respectively by the National Development and Reform Commission for illegally controlling the raw material of promethazine hydrochloride and driving up prices, causing related pharmaceutical companies to suspend production This is also the first fine issued by China for the monopoly of APIs.

 

　　The compound reserpine case also caused a great industry sensation at that time.
The source of raw materials increased the sales price from less than 200 yuan per kilogram to 300-1350 yuan.
Many manufacturers of compound reserpine could not afford it and were forced to suspend production in July of that year, and the market was experiencing tight supply.

 

　　In addition, there is the protracted US "vitamin C monopoly case" and the abuse of market dominance by the State Administration of Market Supervision on Shandong Kanghui Pharmaceutical, Weifang Sunshine Pharmaceutical, and Weifang Puyunhui Pharmaceutical in April 2020.
Administrative penalty decisions were made for violations of status, and a total of 325.
5 million yuan was fined and confiscated.
This is the largest fine ever issued for the monopoly of APIs since the implementation of the Anti-Monopoly Law.

 

　　According to incomplete statistics, since 2016, a total of 15 companies have been punished due to monopoly of APIs.
The APIs involved include estazolam, medicinal methyl salicylate, glacial acetic acid, chlorpheniramine, calcium gluconate, Bromhexine hydrochloride, fluocinolone acetate, etc.

 

　　Enhancing compliance has become a compulsory course

 

　　Recently, the industry association issued the latest "Pharmaceutical Industry Compliance Management Regulations", covering the areas of anti-commercial bribery, anti-monopoly, finance and taxation, product promotion, centralized procurement, environment, health and safety, adverse reaction reports, data compliance and Network security and other aspects of the pharmaceutical industry are comprehensively regulated to help pharmaceutical companies find loopholes in the industry and legal supervision, and regulate their own development.

 

　　Among them, anti-monopoly and anti-commercial bribery have become the focus of the industry.

 

　　In fact, the state's high-pressure anti-monopoly is to promote fair, just, and open and healthy competition in the market.
This is to regulate the market from the top down at the institutional level and create a good competitive environment.
What is also worthy of attention is the need for bottom-up industry self-discipline and corporate compliance development.
The Pharmaceutical Industry Association is also using the concept of "great compliance" to comprehensively regulate the entire process of production, operation, and management of pharmaceutical companies in multiple fields.
Among them, anti-commercial bribery, anti-monopoly, and product promotion are the three areas with the highest degree of concern and the most concentrated corporate risks.

 

　　Monopoly always goes hand in hand with APIs.
The "Guidelines on Anti-monopoly in the Field of APIs (Draft for Comment)" aims to prevent and stop monopolistic activities in the field of APIs, and guide operators in the field of APIs to operate in compliance with laws and regulations.
Behind this reflects the fact that APIs affect the whole body: In the past, there have been announcements of some companies canceling their qualifications for online listing in many provinces, especially in the context of mass procurement.
The cost of APIs is related to the fate of preparation manufacturers, such as APIs.
Fluctuations occur, drugs are limited by the low bid-winning price, and pharmaceutical companies are unwilling to produce at a loss, leading to defaults.
In the light of the abolition of the bid, the more serious is the inclusion of bad records, and the cancellation of the bid-winning qualifications of all products in the province; for the general public, the cut-off of the supply of commonly used medicines affects the choice and availability of medicines.

 

　　The reason is that behind the monopoly of APIs is the scarcity of API approvals.
According to data released by the National Development and Reform Commission, out of more than 1,500 chemical raw materials in my country, only one company can produce 50 types of raw materials, 44 types of raw materials can be produced by only two companies, and only 3 types of 40 types of raw materials can be produced.
, There are often as many as hundreds of relevant drug approvals for downstream companies corresponding to an API.

 

　　How to solve the dilemma, the illegal cost of monopolistic behavior in the past is low, and the constantly refreshed monopoly ticket will generate a huge deterrent at the system level.
It can be predicted that the upstream and downstream cooperation between pharmaceutical and API companies may be strengthened to form a community of interests.

　　Medical News, April 12, April 10, the State Administration for Market Regulation "overtime" issued a notice that shocked four people.
The closely watched Alibaba’s “choice of two” monopoly in the domestic online retail platform service market was subject to administrative penalties.
The State Administration of Market Supervision ordered Alibaba Group to stop illegal activities and impose a fine of 4% of its domestic sales in 2019.
18.
228 billion yuan, equivalent to about one week of Alibaba's 2021 fiscal year Q3 net profit, this is also the largest fine ever issued by China's anti-monopoly authorities, and the country is increasingly strengthening anti-monopoly efforts.

 

　　In fact, in the pharmaceutical industry, the monopoly of the pharmaceutical market in recent years has not only become the focus of anti-monopoly law enforcement and justice in developed countries and regions such as Europe and the United States, but has also become a problem that China needs to pay attention to and solve.
A few days ago, Tianyao Co.
, Ltd.
issued an announcement stating that it intends to be fined 44.
02 million yuan for being suspected of monopolizing fluocinolone acetoacetate APIs.
The fine will have an impact on Tianyao's 2020 performance.
After receiving the fine, Tianyao will lower its 2020 net profit forecast.

 

　　Anti-monopoly of APIs has become a regulatory focus

 

　　According to the “Annual Report on China’s Anti-Monopoly Law Enforcement (2019)” issued by the State Administration for Market Regulation at the end of 2020, there were 6 cases investigated in 2019 in the API industry.
The State Administration for Market Supervision takes anti-monopoly enforcement in the field of APIs as its work.
The top priority.

 

　　The fluocinolone acetate involved in this case is a glucocorticoid.
It is reported that the Tianjin Municipal Market Supervision Commission believes that Tianyao has divided the sales market of fluocinolone acetonate raw materials in the form of agreement, changed and fixed the price of fluocinolone acetonide raw materials, and eliminated restrictions on competition in the sales field of fluocinolone acetonide raw materials, and violated relevant regulations.
Provisions belong to the act of reaching and implementing a monopoly agreement on "fixing or changing commodity prices" and "dividing the sales market or raw material procurement market".
The company has more than 40 varieties of Methsone series, prednisone series, methylprednisolone series, etc.
, and is in an advantageous position in the industry competition.
The product characteristics of corticosteroids and the special requirements of industry management make it difficult to enter, and the concentration of production is high.

 

　　Looking back further, the monopoly of the API industry has appeared before.

 

　　In 2011, Shandong Weifang Shuntong Pharmaceutical Co.
, Ltd.
and Weifang Huaxin Pharmaceutical Trading Co.
, Ltd.
were fined 6.
877 million yuan and 152,600 yuan respectively by the National Development and Reform Commission for illegally controlling the raw material of promethazine hydrochloride and driving up prices, causing related pharmaceutical companies to suspend production This is also the first fine issued by China for the monopoly of APIs.

 

　　The compound reserpine case also caused a great industry sensation at that time.
The source of raw materials increased the sales price from less than 200 yuan per kilogram to 300-1350 yuan.
Many manufacturers of compound reserpine could not afford it and were forced to suspend production in July of that year, and the market was experiencing tight supply.

 

　　In addition, there is the protracted US "vitamin C monopoly case" and the abuse of market dominance by the State Administration of Market Supervision on Shandong Kanghui Pharmaceutical, Weifang Sunshine Pharmaceutical, and Weifang Puyunhui Pharmaceutical in April 2020.
Administrative penalty decisions were made for violations of status, and a total of 325.
5 million yuan was fined and confiscated.
This is the largest fine ever issued for the monopoly of APIs since the implementation of the Anti-Monopoly Law.

 

　　According to incomplete statistics, since 2016, a total of 15 companies have been punished due to monopoly of APIs.
The APIs involved include estazolam, medicinal methyl salicylate, glacial acetic acid, chlorpheniramine, calcium gluconate, Bromhexine hydrochloride, fluocinolone acetate, etc.

 

　　Enhancing compliance has become a compulsory course

 

　　Recently, the industry association issued the latest "Pharmaceutical Industry Compliance Management Regulations", covering the areas of anti-commercial bribery, anti-monopoly, finance and taxation, product promotion, centralized procurement, environment, health and safety, adverse reaction reports, data compliance and Network security and other aspects of the pharmaceutical industry are comprehensively regulated to help pharmaceutical companies find loopholes in the industry and legal supervision, and regulate their own development.

 

　　Among them, anti-monopoly and anti-commercial bribery have become the focus of the industry.

 

　　In fact, the state's high-pressure anti-monopoly is to promote fair, just, and open and healthy competition in the market.
This is to regulate the market from the top down at the institutional level and create a good competitive environment.
What is also worthy of attention is the need for bottom-up industry self-discipline and corporate compliance development.
The Pharmaceutical Industry Association is also using the concept of "great compliance" to comprehensively regulate the entire process of production, operation, and management of pharmaceutical companies in multiple fields.
Among them, anti-commercial bribery, anti-monopoly, and product promotion are the three areas with the highest degree of concern and the most concentrated corporate risks.

 

　　Monopoly always goes hand in hand with APIs.
The "Guidelines on Anti-monopoly in the Field of APIs (Draft for Comment)" aims to prevent and stop monopolistic activities in the field of APIs, and guide operators in the field of APIs to operate in compliance with laws and regulations.
Behind this reflects the fact that APIs affect the whole body: In the past, there have been announcements of some companies canceling their qualifications for online listing in many provinces, especially in the context of mass procurement.
The cost of APIs is related to the fate of preparation manufacturers, such as APIs.
Fluctuations occur, drugs are limited by the low bid-winning price, and pharmaceutical companies are unwilling to produce at a loss, leading to defaults.
In the light of the abolition of the bid, the more serious is the inclusion of bad records, and the cancellation of the bid-winning qualifications of all products in the province; for the general public, the cut-off of the supply of commonly used medicines affects the choice and availability of medicines.

 

　　The reason is that behind the monopoly of APIs is the scarcity of API approvals.
According to data released by the National Development and Reform Commission, out of more than 1,500 chemical raw materials in my country, only one company can produce 50 types of raw materials, 44 types of raw materials can be produced by only two companies, and only 3 types of 40 types of raw materials can be produced.
, There are often as many as hundreds of relevant drug approvals for downstream companies corresponding to an API.

 

　　How to solve the dilemma, the illegal cost of monopolistic behavior in the past is low, and the constantly refreshed monopoly ticket will generate a huge deterrent at the system level.
It can be predicted that the upstream and downstream cooperation between pharmaceutical and API companies may be strengthened to form a community of interests.