The price of APIs soars, the downstream enterprises suffer from difficulties in monopoly distribution

Many pharmaceutical companies sell drugs to a general agent, who monopolizes the downstream market This is the rule adopted by the State Administration for Industry and Commerce and the national development and Reform Commission to open anti-monopoly investigations and penalties under the current legal system In the past month, the prices of various APIs have skyrocketed dozens of times For example, the price of Chlorphenamine Maleate (chlorphenamine maleate), which is mainly used for rhinitis, allergy of skin and mucous membrane and relieving cold symptoms such as weeping, sneezing and runny nose, has risen from 400 yuan / kg to 23300 yuan / kg, arousing widespread market concern Before that, the prices of inosine, uric acid, phenol, papaverine and other APIs all rose sharply A person in the industry reported to the 21st century economic reporter that the price of papaverine injection for the treatment of visceral spasms such as kidney, gall bladder or gastrointestinal tract is also rising sharply "For commonly used drugs and life-saving drugs like papaverine, the price in June was only 3 yuan / piece, but now the price is 39.8 yuan / piece, or wholesale price." "Generally, the price hike within 5 times is still within the acceptable range The price hike of API is unreasonable In addition to the increase of environmental protection and labor costs, the price hike of API is mainly caused by human factors monopoly." Shi lichen, founder of Beijing Dingchen Management Consulting Co., Ltd., told 21st century economic reporters Wang Haiyang (pseudonym), director of the pharmaceutical research center of a pharmaceutical company in Changsha, reported to the 21st century economic reporter that from the perspective of the whole industrial chain of APIs, dealers, through monopoly, ultimately passed on to the downstream pharmaceutical enterprises, "on the one hand, they have to face the pressure of substantial price increase of raw materials and environmental protection, on the other hand, they have to deal with the pressure of consistency evaluation." Price rise is the trend Many industry insiders told 21st century economic reporter that API is affected by environmental protection evaluation and labor cost The overall price rise is a trend, but this sharp rise has a lot to do with dealer agent monopoly Zhang Wei (pseudonym), head of marketing department of a API enterprise in Shijiazhuang, told 21st century economic news: "on the whole, the price rise of API is a trend, which cannot be contained at present There are many factors that lead to the price rising tide, among which the objective factor is the strengthening of national environmental protection supervision In addition, in order to survive, the same variety of enterprises negotiate price increases to offset the increase in pollution control costs These price increases are reasonable behaviors of enterprises in the national environment The range of price increases is not large, and they are controlled within a reasonable range, that is, most of the price increases are in the range of 30% - 50% " In Zhang Wei's view, most of the soaring varieties are the result of human manipulation, and it is certainly unreasonable to increase the price several times or even more than ten times, "the soaring damage to the downstream preparation enterprises is huge, and it is also negative to the overall development of API Sooner or later, inflation will be effectively controlled and restrained " In the first half of last year, it was about 260 yuan / kg By the end of last year, because Shenyang Xindi pharmaceutical factory did not conform to GMP, it was revoked; only Henan Jiushi Pharmaceutical Co., Ltd produced one product, plus artificial operation, bought out the right to operate, and the price was more than 1000 yuan / kg It peaked around May this year with a price of 18000-20000 yuan / kg At present, after the exposure of the chlorphenamine incident, the commercial companies that hoard goods began to sell, and the price has fallen to within 10000 yuan / kg The supply and demand of drug substance market monopolized by Distribution Agency has been stable for a long time Basically, two or three large pharmaceutical companies occupy more than 80% of the market share, which also facilitates the monopoly of the market and price manipulation The so-called Distribution Agency monopoly refers to the monopoly of supply channels by the dealers through buying up the exclusive sales agency rights of the vast majority of API manufacturers in the market Therefore, the agency monopoly of API distribution is mostly concentrated on some small products "These small varieties tend to have low production cost and low gross profit margin Once they are monopolized, they will have a huge impact on downstream pharmaceutical enterprises." "After the formation of monopoly, low-cost drugs will not be able to be produced, there will be a shortage, the profits of downstream pharmaceutical enterprises will be reduced, and then a large number of medical insurance costs will be lost," he told reporters In the end, the patient will pay for the difference " The national development and Reform Commission has been carrying out anti-monopoly investigations and punishments on agency monopoly "In the past four years, we have found that the behind the monopoly of APIs is a small group of people who constantly exploit legal loopholes and update illegal means." Xu Xinyu, director of the anti monopoly Division II of the price supervision bureau of the national development and Reform Commission, said in an interview On February 10, 2017, the State Administration of industry and Commerce issued a fine of 2.292 million yuan to Wuhan Xinxing elite Pharmaceutical Co., Ltd., which monopolized the methyl salicylate API; three days later, the official website of the national development and Reform Commission announced the punishment announcement on Shandong Weifang longshun and Pharmaceutical Co., Ltd., which had a history of API monopoly, who violently obstructed the anti-monopoly investigation, which was the first one issued by the national development and Reform Commission to obstruct the anti-monopoly investigation Investigation ticket; on July 31, 2017, due to the price monopoly of isoniazid API by Zhejiang xinsecco Pharmaceutical Co., Ltd and Tianjin handway Pharmaceutical Co., Ltd., the two companies were fined a total of 443900 yuan, which is the sixth monopoly case of API Market investigated by China's anti-monopoly law enforcement agencies since the 2011 anti monopoly investigation case of Shandong compound xueliping API In response, the national development and Reform Commission issued the guide for price behavior of short drugs and API operators, which clearly stipulated that the short drugs and API operators with dominant market position should not control the price through exclusive transaction without proper reasons; should not refuse to trade with the counterpart in disguise by setting too high sales price or too low purchase price, etc 。 Can Distribution Agency monopoly be effectively restricted under the current legal framework? Zhang Yongquan, a lawyer from Guohao (Tianjin) law firm, explained to the reporter: "in the forms of monopoly stipulated by the anti-monopoly law, concentration of business operators includes four categories: monopoly agreement, abuse of dominant position, concentration of business operators and administrative monopoly, among which concentration of business operators not only refers to horizontal concentration, that is, multiple API manufacturers form price trust together, or participate in mutual decision-making; it also includes Including vertical concentration of operators, that is, many pharmaceutical companies sell drugs to a general agent, and the general agent monopolizes the downstream market This is the rule adopted by the State Administration for Industry and Commerce and the national development and Reform Commission to open anti-monopoly investigations and penalties under the current legal system But it is natural for capital to pursue profits Before the anti-monopoly and anti-commercial bribery mechanisms are improved, even criminal means cannot fundamentally solve the problem " The increase of the price of the raw material drugs will inevitably cause the cost of the downstream pharmaceutical enterprises to rise, because the profits are compressed and the sales volume is sharply reduced "This is a universal phenomenon and an inevitable result at present In addition, the consistency evaluation is approaching, and the pressure on pharmaceutical enterprises is increasing day by day, and it is not easy to solve " Zhang Weigan said, "those small and medium-sized pharmaceutical enterprises with single variety, less profit, small market share and lack of voice are likely to be eliminated by the market due to their poor strength Production halts, bankruptcies and acquisitions may be the end result of such businesses " In order to alleviate the pressure on pharmaceutical enterprises, the former State Food and Drug Administration publicly solicited opinions on the related review system in December 2017 Article 2 of the measures for the administration of joint review and approval of APIs, pharmaceutical excipients and drug packaging materials and pharmaceutical preparations (Draft for comments) stipulates that a management system will be established with the quality of pharmaceutical preparations as the core, the quality of APIs, pharmaceutical excipients and drug packaging materials as the basis, and the joint review and approval of the original excipients and preparations The original excipients will not be reviewed and approved separately This also means that the API is no longer issued with the approval number alone as the finished product preparation, but under the background of establishing the drug quality management system with the drug listing license holder as the main responsibility, the preparation manufacturing enterprise will find the API enterprise alone, corresponding to the API required for the production of the preparation, and the approval method of the API associated with the preparation will be implemented "The related review is a kind of guidance, which means that the production and sales of APIs should be carried out in accordance with this mode, but this policy cannot be implemented temporarily this year This year, the enterprises with normal production number are still the main market players." Zhang Wei told reporters that even API enterprises with document numbers are not all producing API Due to various conditions, the number of API enterprises is actually decreasing, so the situation of API shortage is not easy to solve in a short period of time " Even if the related review is implemented, the enterprises with document number who have worked in the market for many years still have great advantages "Because of many years of experience in production process proficiency and customer control, new competitors will face many difficulties The time cost of the related review and the risk cost transferred to the preparation enterprise are obstacles to the new API manufacturer, so the related review will not immediately solve the existing problems, but it should be a good choice in the long run " Some experts in the industry pointed out that as the prices of APIs skyrocketed, we should strengthen the tracking and monitoring of the source of APIs, the inventory of enterprises and the market trading behavior, comprehensively study and judge the emerging problems and trends, pay close attention to the pharmaceutical and API production and distribution enterprises with obvious price increases, and carry out special cost price investigations when necessary We will strengthen the supervision of the drug and API markets, investigate and deal with all kinds of illegal behaviors such as bid up prices and monopolies in accordance with the law, increase penalties, and maintain market order We will study and formulate the guide to the price behavior of monopoly APIs for short drugs, establish a blacklist system for dishonest operators, and formulate measures to prohibit the operators from engaging in the pharmaceutical industry in accordance with the law for those who repeatedly investigate and commit the cases of monopoly of short drugs and APIs.