China's antitrust tentacle extends to multinational pharmaceutical enterprises

Source: xinhuanet.com, July 8, 2013, 60 Chinese and foreign pharmaceutical enterprises were investigated [report on the website of Hong Kong's South China Morning Post, July 4], Title: investigation of pharmaceutical enterprises in China on cost and price manipulation At a time when foreign companies are under pressure from Beijing for possible price manipulation, China's top economic planning department is investigating the cost and pricing mechanism of pharmaceutical companies, including the business units of GlaxoSmithKline and Merck Previously, China also conducted an independent investigation into milk powder The investigation has led to a reduction in milk powder prices According to a statement released on February 2 by the national development and Reform Commission, the agency is investigating production costs and pricing mechanisms of several Chinese and foreign pharmaceutical companies The national development and Reform Commission will investigate 27 enterprises on cost and 33 enterprises on pricing According to the national development and Reform Commission, the survey aims to understand the internal cost and pricing of these enterprises, as well as adjust the drug price in time In addition to GlaxoSmithKline and Merck, the foreign companies under investigation include Astaire and Berlin Ingelheim, Baite International Co., Ltd and frazenius Co., Ltd A research team from the agency will visit the companies involved between July and October, the national development and Reform Commission said An industry source familiar with the situation said the focus of the survey appeared to be "transfer pricing" "Transfer pricing" is a pricing strategy that determines how costs are allocated between large enterprise business units Beijing also plans to analyze the price differences of products sold by foreign companies in China and other markets Multinational pharmaceutical companies feel chilly [Financial Times website reported on July 4] title: China's drug censorship has made pharmaceutical groups feel chilly After the fiery development of the past 10 years, the Chinese government decided this week to investigate the pharmaceutical industry, which makes multinational pharmaceutical groups expanding in the country feel chilly Local business executives stressed that it was part of a series of reviews by the national development and Reform Commission, which set a "ceiling" on the price of all government subsidized patented and generic drugs But some have warned that the move is a sign of tighter regulation, heralding broader and deeper price cuts A consultant in the pharmaceutical industry said: "we know that the price will be reviewed after the director of the new national health and Family Planning Commission takes office Everyone expected this, but this review seems to be more comprehensive and earlier than expected " Citibank said in an analysis report in January that since March 2011, under the guidance of the national development and Reform Commission, all kinds of drugs for different diseases have experienced five rounds of price reduction, with an average range of 15% - 20% Citibank predicted that over priced drugs and imported drugs will become the focus of price reduction in the future The trend of drug price reduction has made China an attractive market in the eyes of many Western pharmaceutical companies, even before the global recession, due to its large aging population, rapid economic growth and commitment to improve health care According to the prediction of the consulting company, the scale of China's pharmaceutical market will rise from the third place in the world to the second place by 2020.