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    Home > Medical News > Latest Medical News > The antitrust guide to API is here! Enterprises can't have these behaviors!

    The antitrust guide to API is here! Enterprises can't have these behaviors!

    • Last Update: 2020-10-17
    • Source: Internet
    • Author: User
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    On October 14th, the State Administration of Market Supervision and Administration issued the Antimonopoly Guidelines (Drafts for Comments) on THERA (hereinafter referred to as the Guidelines) for public consultation until October 30th.
    The Guide contains six chapters and 22 articles, which define and regulate monopoly violations in the field of API in a very detailed manner, with the aim of promoting the healthy development of the API industry, maintaining the order of competition in the API market, protecting the interests of consumers and the public interest, preventing and suppressing monopoly in the field of API, and promoting scientific and effective anti-monopoly supervision.
    guide on the prohibition of abuse of market dominance states that API operators should comply with the relevant provisions of the Anti-monopoly Law and prohibit horizontal monopoly agreements with competitors.
    For API production enterprises, it shall avoid reaching joint production agreements, joint purchasing agreements, joint sales agreements, joint tender agreements and other agreements with third parties (e.g., API distribution enterprises, downstream pharmaceutical production enterprises) to communicate sensitive information such as the sale price, production scale and production and marketing plan of API.
    In terms of vertical monopoly agreements, API manufacturers and distribution enterprises shall avoid imposing direct resale price restrictions on downstream distributors, pharmaceutical manufacturers, etc. through oral agreements, written letters, e-mails, price adjustment notices, etc.; Resale prices such as production enterprises, threatening to eliminate rebates, reduce discounts or even refuse supplies or terminate agreements, resale price restrictions on downstream distributors and pharmaceutical production enterprises, and providing incentives such as rebates, priority supply and support, and resale price restrictions on downstream distributors and pharmaceutical manufacturers.
    At the same time, API manufacturers or distribution enterprises with a dominant market position may abuse their dominant market position, for example, the sale of API at unfairly high prices, the refusal to sell API, the limited transaction involving API, the tying of API, the additional unreasonable trading conditions involving API, the differential treatment involving API, and the common abuse of market dominance.
    , if the abuse of market dominance involving RAW drugs is found, the provisions of Chapter III of the Antimonopoly Law shall apply.
    insist on "strict and fast" treatment is worth noting, because the supply of raw materials and drugs and price stability related to the people's life safety and vital interests.
    Where there are frequent monopoly acts in the field of API in China, operators have a high degree of awareness of monopoly behavior, and API operators have committed monopoly acts, especially if they knowingly evade anti-monopoly investigations in violation of the Anti-monopoly Law, the anti-monopoly law enforcement agencies shall, in accordance with the provisions of Articles 46, 47 and 49 of the Antimonopoly Law, take into account such factors as the nature, extent and sustainability of the illegal acts.
    years, the problem of API monopoly is not uncommon, poomin, ice acetic acid, calcium glucosate and other API monopoly events have been fermented.
    , due to the rise in the price of RAW drugs, API monopoly and other reasons led to the discontinuation of some drugs, resulting in a shortage of clinical use.
    , the state has continuously increased the monopoly of raw materials and drugs, investigated and dealt with a number of cases.
    In April this year, the State Administration of Market Supervision investigated and dealt with a major typical case of abuse of market dominance in the field of API, issued the largest fine in the field of API since the implementation of the Anti-monopoly Law, and imposed administrative penalties on three calcium glucosate API distribution enterprises for monopolizing acts, with a total fine of 325.5 million yuan.
    under the high-pressure supervision policy, the API market is gradually moving towards standardization.
    with the introduction of consistent evaluation, volume procurement and related review policies, the status of API is becoming more and more important.
    prices of high-quality API are expected to rise steadily.
    the same time, the global new crown pneumonia epidemic continues to ferment, the global API market pattern is also changing.
    from the international market, some of China's RAW drugs to achieve counter-trend growth, volume prices rose, driving the performance of related enterprises growth.
    from the domestic market, the API sector is in a sustained upward trend.
    industry believes that the new crown outbreak on the volume of raw materials prices will have a short-term impact, in the long run, specialty API enterprises will be expected to get more opportunities for development.
    on the anti-monopoly of raw materials, the relevant person in charge of the State Administration of Market Supervision also said that the production and operation of raw materials and pharmaceuticals shall not engage in monopoly agreements prohibited by the Anti-monopoly Law and abuse of market dominance.
    The market regulatory authorities will continue to step up anti-monopoly enforcement efforts in the field of API and pharmaceuticals, crack down on all forms of monopoly acts such as monopoly price increases, monopolize acts in the field of API and pharmaceuticals, especially those that are intended to circumvent anti-monopoly investigations, adhere to strict and speedy treatment, effectively protect the interests of consumers, and safeguard the fair competition order in the API and pharmaceutical markets.
    The purpose and basis of The First Chapter of the Anti-monopoly Guide on the Field of Raw Materials and Pharmaceuticals (Draft for Comments) The purpose and basis of the Guidelines are to promote the healthy development of the API industry, maintain market competition order in the field of API, protect consumer interests and the public interest, prevent and suppress monopoly practices in the field of API, and promote scientific and effective anti-monopoly supervision.
    article 2 The relevant market API industry chain covers production, transportation, distribution and other links, involving a variety of business types, defining the relevant commodity markets and regional markets should follow the general principles and methods established by the Antimonopoly Law and the Antimonopoly Commission of the State Council on the Definition of the Relevant Market, taking into account the particularities of the API, and conducting specific analyses on a case-by-case basis.
    (1) The basic method of defining the relevant commodity market in the field of API in the relevant commodity market is alternative analysis, and when defining the relevant market in a case, the demand substitution analysis can be carried out based on the product characteristics, quality standards, uses, prices and other factors of API.
    , supply substitution analysis can be carried out on the basis of market entry, production capacity, transformation of production facilities, technical barriers and other factors.
    , depending on the circumstances, the relevant commodity market may need to be further subdivided into API production market and API distribution market.
    , because API has a special role in the production of drugs, a API generally constitutes a separate market for related commodities.
    the same API production and distribution markets may need to be further segmented because of the different quality grades and the scope of application of the same API.
    (ii) The relevant regional market definition in the field of raw materials and pharmaceuticals in the relevant geographical market adopts demand substitution and supply substitution analysis.
    the relevant regional markets in the field of API are generally defined as country-wide markets because of the different qualifications and regulatory standards for the production and distribution of API in different countries.
    In the production and distribution of API in China, API production enterprises shall organize production in accordance with the approved process, strictly abide by the quality management norms of pharmaceutical production, and ensure that the production process continues to meet the statutory requirements;
    , the relevant regional markets for the production and distribution of API are generally defined as the Chinese market.
    according to the characteristics and costs of different API transportation, the geographic market for specific varieties of API may need to be further segmented.
    (iii) The role of relevant market definition in various types of monopoly cases adheres to the principle of case analysis, and different types of monopoly cases have different actual needs for the definition of the relevant market.
    When a horizontal monopoly agreement is reached between API operators on fixed prices, dividing the market and limiting output, as well as a vertical monopoly agreement that fixes resale prices and limits the minimum resale price, law enforcement agencies may not clearly define the relevant market in terms of illegality determination;
    , the relevant market definition has a certain role in the competition evaluation of horizontal monopoly agreement and vertical monopoly agreement.
    the provisions of Article 13 or Article 14 of the Agreement are not applicable in accordance with Article 15 of the Antimonopoly Law, the operator shall prove that the Agreement meets the conditions stipulated in Article 15.
    "proving that the agreement reached does not severely limit competition in the relevant market" is one of the conditions set out in article 15, and the relevant market definition thus becomes a necessary step for the operator to prove that his agreement meets the statutory exemption.
    Chapter II Monopoly Agreement Article 13 of the Antimonopoly Law prohibits horizontal monopoly agreements, Article 14 prohibits vertical monopoly agreements, and Article 15 provides for the exemption and conditions of monopoly agreements.
    Article 3 Horizontal monopoly agreements in the field of API (1) The operators of horizontal monopoly agreements shall abide by the relevant provisions of the Anti-monopoly Law and prohibit the agreement with competitors to enter into and implement horizontal monopolies.
    For API production enterprises, it shall avoid reaching joint production agreements, joint purchasing agreements, joint sales agreements, joint tender agreements and other agreements with third parties (e.g., API distribution enterprises, downstream pharmaceutical production enterprises) to communicate sensitive information such as the sale price, production scale and production and marketing plan of API.
    For API distribution enterprises, horizontal monopoly agreements such as quantity purchased, purchase object, sales price, sales quantity, sales object, etc. with other API distribution enterprises with competitive relationship shall be avoided;
    (ii) There is no significant difference between the field of competitive analysis of API with other areas and industries in terms of horizontal monopoly agreement competitive analysis, and therefore this guide is no longer further refined.
    agreement on horizontal monopoly in the field of API shall be handled by the market supervision and administration department in accordance with relevant laws and regulations such as the Antimonopoly Law.
    article 4 Vertical Monopoly Agreement (1) Agreement form and competition damage vertical monopoly agreement in the field of API may be manifested as direct restrictions, such as the resale price of downstream enterprises by API manufacturers through the terms of the contract, or indirect restrictions, such as profits, discounts and rebates of fixed dealers, by eliminating rebates, reducing discounts, refusing supply or lifting agreements by downstream enterprises that do not comply with the price limits.
    In the field of API, vertical monopoly agreements are reached mainly through distribution agreements between production or distribution enterprises and downstream enterprises, and may also be reached through oral agreements, written correspondence, e-mail, price adjustment notices, etc.
    , the implementation of vertical monopoly agreements by individual API manufacturers or distribution enterprises will limit in-brand competition and harm the interests of downstream distributors and pharmaceutical manufacturers.
    Especially when many or even all operators in the relevant market adopt similar vertical monopoly agreements, the competition in the API market will be significantly weakened, harming the interests of API distribution enterprises and pharmaceutical production enterprises, making the prices of API and related drugs significantly higher than the level of competition, and harming the competition in the API and related pharmaceutical markets.
    the recognition of vertical monopoly agreements in the field of API, the relevant provisions of drug association review and approval may be considered.
    14 of the Antimonopoly Law expressly prohibits fixed resale prices and limits minimum resale prices.
    effects of resale price restrictions are mainly reflected in maintaining the high price of API and weakening market competition.
    API production enterprises and distribution enterprises shall avoid the following acts: 1. Direct resale price restrictions on downstream distributors, pharmaceutical production enterprises, etc. through oral agreement, written correspondence, e-mail, price adjustment notice, etc.; 2. Adopt fixed dealer profits, discounts and rebates and other means to restrict distributors, pharmaceutical production enterprises, etc. Resale prices; 3. Resale price restrictions on downstream distributors and pharmaceutical manufacturers by means of eliminating rebates, reducing discounts or even refusing supply or lifting agreements; 4. Providing incentive measures such as rebates, priority supply, and support; and resale price restrictions on downstream distributors and pharmaceutical manufacturers.
    (3) Geographical restrictions and customer restrictions refer to api production enterprises or distribution enterprises to limit the transaction of relatives only in a specific distribution area to one or more downstream API distributors, downstream distributors do not sell to other distribution areas.
    customer restriction refers to the API production enterprises or distribution enterprises to limit the transaction of relatives can only sell raw materials to or may not be sold to specific API distribution enterprises, pharmaceutical production enterprises.
    and customer restrictions may weaken competition in the API market, divide the market, and create price discrimination.
    and customer restrictions may make it difficult for other API dealers or pharmaceutical manufacturers to obtain supplies, keeping API and drug prices high.
    and distribution enterprises shall avoid the implementation of geographical restrictions or customer restrictions. article
    If an API manufacturer or distribution enterprise claims that its agreement may be applied to Article 15 of the Anti-monopoly Law, it shall, on a case-by-case basis, prove that its agreement meets the statutory conditions stipulated in Article 15 of the Anti-monopoly Law and determine whether its agreement can be exempted.
    article 6 Industry associations in the field of API may not organize API production enterprises or API distribution enterprises to reach monopoly agreements, and may not facilitate monopoly agreements reached by API production enterprises or distribution enterprises.
    , Chapter III of the Antimonopoly Law shall apply to the abuse of market dominance involving RAW drugs.
    usually, first define the relevant market, determine whether the operator has a dominant market position in the relevant market, and then, according to the case, refer to Articles 9 to 15 of this chapter to specifically analyze whether it constitutes an abuse of market dominance.
    The determination of the dominant market position determines whether the API operator has a dominant position in the relevant market and shall be analyzed in accordance with the factors and circumstances stipulated in Articles 18 and 19 of the Anti-monopoly Law that identify or presume that the operator has a dominant market position.
    the characteristics of the API industry, the following factors can be specifically considered: (i) the original.
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