National Anti-Monopoly Bureau listed!

On November 18, the State Antimonopoly Bureau was officially listed in the office building of the State Administration for Market Supervision and Administration
.
On the same day, the Anti-Monopoly Guidelines of the Anti-Monopoly Committee of the State Council on the Field of APIs (hereinafter referred to as the "Guide") was also released on the website of the State Administration for Market Regulation
.
The establishment of the National Anti-monopoly Bureau is regarded as an important upgrade of the anti-monopoly law enforcement system, and law enforcement forces will be further strengthened
.
The pharmaceutical industry has always been a key area of ​​anti-monopoly supervision, especially in the field of raw materials
.
The issuance of the "Guide" will help promote the healthy development of the API industry, maintain fair competition in the API field, protect the interests of consumers and the public interest, prevent and stop monopolistic behavior in the API field, and promote scientific and effective antitrust supervision
.
The "Guide" contains six chapters and 29 articles in the five major content of the standard for identifying monopoly behaviors, which is closely linked with the structure of the "Anti-Monopoly Law", and clarifies the basic principles and ideas of anti-monopoly supervision for the more prominent monopoly issues in the field of APIs in various aspects.
And methods, refine the criteria for determining monopoly behavior, and mainly stipulate five aspects
.
(1) General rules
.
One is to clarify the purpose and basis of the guidelines, and define relevant basic concepts
.
The second is to propose that the anti-monopoly law enforcement agencies should adhere to the principles of protecting fair competition in the market, scientifically and efficiently supervising in accordance with the law, focusing on protecting consumer interests, and continuing to strengthen legal deterrence when conducting anti-monopoly supervision in the field of APIs
.
The third is to take into account the characteristics of wide coverage of the industrial chain and multiple types of business in the field of APIs, and elaborate on the definition of relevant commodity markets and relevant geographic markets
.
(2) Monopoly agreement
.
The first is to analyze the basic ideas of anti-monopoly enforcement of monopoly agreements, clarify the form of monopoly agreements, and provide specific explanations for other coordinated behaviors
.
The second is to combine the characteristics of the API field, enumerate common ways for operators to reach or implement monopoly agreements and law enforcement considerations, clarify that API operators impose geographic restrictions or customer restrictions on transaction counterparts, which may constitute vertical monopoly agreement behavior, and explained Competitive harm effects of vertical monopoly agreements
.
The third is to refine the analysis ideas of the operators' implementation of collaborative behavior
.
The fourth is to clarify the specific form of the hub-and-spoke agreement, and put forward the analytical thinking for the application of the "Anti-Monopoly Law"
.
The fifth is to explain the exemption and leniency system, and to regulate the behavior of industry associations
.
(3) Abuse of market dominance
.
The first is to combine the characteristics of the API field to clarify the basic ideas for the abuse of dominant market position in anti-monopoly law enforcement, and to clearly identify or presume that the operator has a dominant market position, including the market share of the operator, the relevant market competition situation, and the operator’s The actual production capacity and output, the operator's ability to control the API sales market or the procurement market, the operator's financial and technical conditions, the degree of dependence on the transaction counterparty, the number of actual and potential transaction counterparties, the ability of the transaction counterparty to check and balance, and the market The degree of difficulty of entry, etc.
, and a clear calculation method for market share
.
The second is to focus on detailing the manifestations of common abuses of market dominance, including unfair high prices, refusal to trade, restricted transactions, tying, additional unreasonable trading conditions, differential treatment, etc.
, and targeted responses to monopoly price increases and controlled sales Common monopolistic behaviors in the field of APIs such as supply cuts and requests for repurchase of preparations will enhance the operability of the legal system and provide market entities with clear compliance guidelines
.
The third is to clarify the thinking and consideration factors for joint abuse of market dominance in combination with the operating characteristics and law enforcement practices in the field of APIs
.
(4) Concentration of business operators
.
The first is that the market size of some APIs is relatively small, and the annual turnover of operators may not meet the reporting standards in the "Provisions of the State Council on the Declaration Standards for Concentration of Undertakings", but the evidence shows that the concentration implemented by the undertakings has or may have exclusions.
The effect of restricting competition clearly stipulates that the Anti-monopoly Law Enforcement Agency of the State Council shall conduct investigations in accordance with the law
.
The second is the concentration of business operators that meet the above-mentioned circumstances, and encourage the business operators of the API field to negotiate with the anti-monopoly law enforcement agency as soon as possible before the implementation of the concentration
.
(5) Abusing administrative power to eliminate and restrict competition
.
The "Guide" mainly refines the areas of APIs that involve restricted transactions, impeding the free circulation of goods, restrictions on bidding and bidding, restrictions on investment or establishment of branches, compulsory operators to engage in monopolistic behavior, formulation of regulations containing exclusions and restrictions on competition, etc.
Abuse of administrative power to exclude , The manifestation of restrictive competition behaviors, it is clear that regulations, normative documents and other policy measures related to the economic activities of market entities in the field of APIs should be reviewed for fair competition to maintain a unified national market
.
Pharmaceutical antitrust cases frequently show how companies can reduce their illegal risks.
In recent years, there have been cases in the API sector where relevant companies use market monopoly positions to manipulate prices for profiteering, or impose unreasonable trading conditions for unfair competition
.
The General Administration of Market Supervision has severely investigated and dealt with the monopoly of glacial acetic acid, chlorpheniramine, calcium gluconate and Batroxobin in accordance with the law, and many companies have received huge fines
.
On November 18, the WeChat public account of "Shanghai Market Supervision" revealed that Nanjing Ningwei Pharmaceutical Co.
, Ltd.
was imposed an administrative penalty by the Shanghai Market Supervision Administration for allegedly selling chlorophosphoridine raw materials at a high price, with a total fine of 6.
58 million yuan
.
Not long ago, the official website of the State Administration of Market Supervision announced that Shangqiu New Pioneer Pharmaceutical Co.
, Ltd.
was fined about 11.
044 million yuan for abusing its dominant market position and selling phenol raw materials at unfairly high prices
.
After investigation, during the period of Shangqiu New Pioneer's monopoly, the average sales price of phenol raw materials increased by 9.
2 times compared with the historical price
.
Since the beginning of this year, the pharmaceutical industry has issued a number of antitrust tickets
.
According to incomplete statistics, as of September 2021, of the 18 publicly available investigations in the pharmaceutical industry, 13 were monopoly of raw materials (1 suspended investigation), and 5 were monopoly of finished drugs (1 of which was both Involving raw materials and finished drugs), one case was a medical device monopoly case
.
In addition, there is another judicial case concerning the monopoly of APIs
.
Sorting out the anti-monopoly cases of APIs from 2016 to the present.
The monopolistic behaviors implemented by relevant companies involve fixed prices, segmentation of the sales market, boycott transactions, unfair high prices, refusal to deal or attach unreasonable trading conditions, tie-in sales, etc.

.
The formulation and promulgation of the "Guide" has further improved the rules of the anti-monopoly supervision system, which is conducive to enhancing the uniformity, scientificity and effectiveness of anti-monopoly law enforcement in the field of APIs, and improving the predictability and transparency of law enforcement
.
At the same time, it is also beneficial for operators in the API field to clarify the boundaries of behavior, strengthen compliance and self-discipline in accordance with the law, and reduce the risk of violations
.
Currently, the "Anti-Monopoly Law" (Draft Amendment) is soliciting opinions from the society, and the deadline is November 21, 2021
.
It is reported that the draft has improved legal responsibilities and increased penalties
.
In response to the problems reflected in the anti-monopoly law enforcement, the amount of fines for related violations has been substantially increased, and the penalties for the legal representatives, main persons in charge, and persons directly responsible for the business operators who have reached a monopoly agreement have been increased, as well as credit punishments.
Regulations
.
From the perspective of the industry, anti-monopoly supervision will be further strengthened after the "Anti-Monopoly Law" is amended
.
Under the situation of further escalation of anti-monopoly pressure, how can pharmaceutical companies avoid "stepping on thunder"? For API companies, some insiders pointed out that given the particularity of the API market structure, the number of manufacturers is usually very limited, and API companies need to pay special attention to the monopoly risk of information communication
.
The exchange of sensitive information between API manufacturers requires special prudence.
Once any tacit or coordinated behavior aimed at restricting or excluding competition is reached, it will easily constitute a monopoly agreement
.
API companies may also be presumed to have a common market dominance because they jointly own 100% of the API market.
Therefore, related excessive price increases can easily be regarded as unfairly high prices and refuse to supply specific customers.
Behaviors can also easily trigger the monopoly risk of refusal to trade
.
Judging from the fines received by the pharmaceutical industry this year, anti-monopoly has entered the field of preparations from raw materials, and this has triggered a big discussion in the industry on the way out of the controlled sales model.

.
Insiders reminded that companies should pay special attention to and actively self-examine in the course of business operations, whether there is any involvement in price maintenance through the following means: such as signing cooperation agreements, issuing price adjustment letters, verbal notifications, etc.
, with drug wholesalers, retail pharmacies, etc.
And other downstream companies reached an agreement to fix the resale price of drugs and limit the minimum resale price of drugs, and ensure the agreement through measures such as formulating implementation rules, strengthening assessment and supervision, penalizing low-price sales distributors, and entrusting intermediary agencies to monitor online drug prices.
Implement
.
If so, it means that the company has violated Articles 46 and 49 of the Anti-Monopoly Law and must hurry up to rectify and operate in compliance with regulations
.
The Anti-Monopoly Committee of the State Council’s Anti-Monopoly Guidelines for API Fields Chapter I General Provisions and the basis for the first item is to prevent and stop monopolistic behaviors in the API field, further clarify market competition rules, maintain the order of market competition in the API field, and protect the interests of consumers This guide is formulated in accordance with the "Anti-Monopoly Law of the People's Republic of China" (hereinafter referred to as the "Anti-Monopoly Law") and other laws and regulations
.
Article 2 Related Concepts (1) APIs refer to the raw materials used in the production of various drugs that meet the requirements of relevant laws and regulations on drug management and are the effective ingredients in drugs
.
The raw materials used in this guideline include chemical raw materials and Chinese herbal medicines
.
(2) Drugs refer to substances that are used to prevent, diagnose, and treat human diseases, purposely regulate human physiological functions, and stipulate indications or functional treatments, usage and dosage, including traditional Chinese medicines, chemical medicines and biological products, etc.

.
(3) API operators refer to all kinds of enterprises engaged in the production and operation of APIs with the approval of relevant supervision and management departments
.
(4) An API manufacturer refers to an enterprise that has been approved by the relevant supervision and management department to produce and sell APIs by means of chemical synthesis, animal and plant extraction, and biotechnology
.
(5) An API distributor enterprise refers to an enterprise that has been approved by the relevant supervision and management department to not produce APIs, but only engage in the sales and marketing of APIs
.
(6) Pharmaceutical production enterprises refer to enterprises that have been approved by relevant supervision and management departments and obtained pharmaceutical production licenses to produce and sell pharmaceuticals
.
(7) A drug distribution enterprise refers to an enterprise that has been approved by the relevant supervision and management department and has obtained a drug business license to engage in drug business and sales
.
Article 3 Basic Principles Anti-monopoly law enforcement agencies adhere to the following principles in conducting anti-monopoly supervision in the field of APIs: (1) Protecting fair competition in the market
.
Adhere to the same treatment and equal treatment of market players, strengthen regulation and supervision in accordance with the law, focus on preventing and stopping monopolistic activities in the field of APIs, protecting fair competition in the market, maintaining a good order of competition, supporting the innovation and development of API operators, and enhancing international competitiveness
.
(2) Scientific and efficient supervision in accordance with the law
.
The basic system, regulatory principles, and analytical framework determined by the Anti-Monopoly Law and related supporting laws, regulations, and guidelines are applicable to market entities in the field of APIs
.
The anti-monopoly law enforcement agency strengthens competition analysis and legal argumentation based on the specific circumstances of cases in the field of APIs, continuously strengthens and improves anti-monopoly supervision, and enhances the pertinence and scientific nature of anti-monopoly law enforcement
.
(3) Pay attention to protecting the interests of consumers
.
Anti-monopoly law enforcement agencies severely crack down on various types of API monopolies, promote companies to improve operational efficiency, maintain market competitive prices, guide and encourage API operators to use more resources for process improvement, quality and efficiency improvements, and promote APIs Effective supply and stable supply of medicines protect the interests of consumers
.
(4) Continue to strengthen legal deterrence
.
Anti-monopoly law enforcement agencies continue to increase law enforcement in the field of APIs, and those who knowingly violate the Anti-Monopoly Law deliberately implement or take measures to evade investigations shall be severely dealt with in accordance with the law, strengthen legal deterrence, and effectively curb monopolistic activities in the field of APIs , Focus on improving people's livelihood and well-being
.
Article 4 Relevant market definition The API industry chain covers production, transportation, distribution and other links, involving various types of business.
The definition of relevant commodity markets and geographic markets needs to follow the Anti-Monopoly Law and the Guidelines of the Anti-Monopoly Committee of the State Council on Relevant Market Definition 》Determined general principles, taking into account the characteristics of the API industry, and conducting specific analysis in combination with individual cases
.
(1) Relevant commodity market The basic method for defining the relevant commodity market in the field of APIs is substitution analysis
.
When defining the relevant market in a case, it is possible to conduct a demand substitution analysis based on factors such as the product characteristics, quality standards, use, and price of the API
.
When necessary, supply substitution analysis can be conducted based on factors such as market entry, production capacity, transformation of production facilities, and technical barriers
.
Depending on the specific circumstances, it may be necessary to further subdivide the relevant commodity market into an API production market and an API distribution market
.
Since APIs have a special effect on the production of drugs, an API generally constitutes a separate related commodity market, which may be further subdivided according to specific circumstances
.
If there is a substitution relationship between different types of APIs, it may be determined that multiple types of APIs constitute the same relevant commodity market based on specific circumstances
.
(2) Relevant geographical markets The definition of relevant geographical markets in the field of APIs adopts demand substitution and supply substitution analysis
.
Different countries have different qualifications and regulatory standards for the production and distribution of APIs
.
For the production and distribution of APIs in China, API operators shall organize production in accordance with the approved process, strictly abide by the drug production quality management specifications and the drug management quality management specifications, and ensure that the production and operation processes meet the legal requirements; imported APIs need to obtain relevant Chinese regulations.
Approval by the supervision and management department
.
Therefore, the relevant geographic market for the production and distribution of APIs is generally defined as the Chinese market
.
According to the characteristics and costs of the transportation of different APIs, the geographic market for specific types of APIs may be defined as a certain geographic range
.
Chapter II Monopoly Agreements The "Anti-Monopoly Law" prohibits operators from reaching and implementing monopoly agreements
.
To identify monopoly agreements in the field of APIs, Chapter 3 of the Anti-Monopoly Law and the Interim Provisions on Prohibition of Monopoly Agreements apply
.
Monopoly agreements clearly listed in Articles 13 and 14 of the Anti-Monopoly Law shall be prohibited in accordance with law; monopoly agreements that meet the conditions set forth in Article 15 of the Anti-Monopoly Law shall be exempted in accordance with the law
.
Article 5 Forms of Monopoly Agreements Monopoly agreements in the field of APIs refer to agreements, decisions or other concerted actions by operators to exclude or restrict competition
.
Agreements and decisions can be in written or oral forms
.
Other coordinated behaviors refer to the fact that the operators have not clearly entered into an agreement or decision, but have substantially coordinated behavior through other means, except for parallel behaviors such as price follow-up by the relevant operators based on independent intentions
.
Article 6 Horizontal Monopoly Agreements It is forbidden to enter into a horizontal monopoly agreement stipulated in Article 13 of the Anti-Monopoly Law by the operators of competitive APIs
.
The following behaviors of API operators generally constitute monopoly agreements prohibited by Article 13 of the Anti-Monopoly Law: Sales agreement, joint bidding agreement, etc.
, to negotiate the production quantity, sales quantity, sales price, sales target, sales area, etc.
of the raw material medicine; Communicate and coordinate sensitive information such as API sales prices, production capacity, production and sales plans at trade fairs, industry meetings, etc.
; (3) API manufacturers and other competing API operators have reached an agreement not to produce or sell APIs and other ingredients Agreement on compensation by drug dealers; (4) The API distributors communicate and coordinate with other API operators in a competitive relationship on the purchase quantity, purchase objects, sales price, sales quantity, sales objects, etc.

.
There is no significant difference between the API field and other fields and industry horizontal monopoly agreements in terms of competition analysis, and this guide will not be further detailed
.
Article 7 Vertical Monopoly Agreements It is forbidden for API operators to enter into vertical monopoly agreements as stipulated in Article 14 of the Anti-Monopoly Law with counterparties
.
The following behaviors of API operators generally constitute monopoly agreement behaviors prohibited by Article 14 of the Anti-Monopoly Law: (1) To API distributors through contract agreements, oral agreements, written letters, emails, price adjustment notices, etc.
, Drug manufacturers, etc.
implement direct fixation of resale prices and limited minimum resale prices (hereinafter referred to as resale price restrictions); Implement disguised resale price restrictions; to provide incentives such as rebates, priority supply, and support, or to threaten punitive measures such as canceling rebates, reducing discounts, or even refusing to supply or canceling agreements, to target API distributors and pharmaceutical manufacturers Resale price restrictions are generally considered to be supervision and punishment measures for the implementation of vertical monopoly agreements
.
The implementation of geographic restrictions or customer restrictions by API operators may constitute a monopoly agreement prohibited by Article 14 of the Anti-Monopoly Law
.
Among them, the geographical restriction means that the API operator restricts the counterparty of the transaction to only supply to one or several downstream API distribution companies in a specific distribution area, and the downstream API distribution company does not sell to other distribution areas; customer restrictions refer to the API The business operator restricts the counterparty of the transaction to only sell or not sell the API to specific API distributors and pharmaceutical manufacturers
.
Geographical restrictions and customer restrictions may lead to market segmentation and price discrimination, weaken the competition in the API market, and may also make it difficult for other API distributors or drug manufacturers to obtain relevant product supplies, and keep the prices of APIs and drugs at a high level
.
Under normal circumstances, the implementation of a vertical monopoly agreement by a single API operator will restrict intra-brand competition and harm the interests of API distributors and pharmaceutical manufacturers
.
Especially if multiple or even all operators in the relevant market adopt similar vertical monopoly agreements, competition in the API market will be significantly weakened, harming the interests of API distributors and drug manufacturers, and making the prices of APIs and related drugs significantly higher than The level of competition hurts the market competition of APIs and related drugs
.
Article 8: Coordination of Cooperative Behavior: To recognize a cooperative behavior in the field of APIs, direct evidence can be used to determine whether there is a concerted behavior
.
If direct evidence is difficult to obtain, you can determine whether the operators are aware of relevant information in accordance with the provisions of Article 6 of the Interim Regulations on Prohibition of Monopoly Agreements and indirect evidence consistent with logic to determine whether there is a concerted behavior among the operators
.
The operator can provide contrary evidence to prove that there is no concerted behavior
.
Article 9 Hub and Spoke Agreement Operators shall not organize API operators to reach a monopoly agreement or provide them with substantial assistance in reaching a monopoly agreement
.
Competitive API operators may use the vertical relationship with other operators, or be organized and coordinated by other operators, to reach a hub-and-spoke agreement with the effect of a horizontal monopoly agreement
.
Analyze whether the agreement is a monopoly agreement regulated by Article 13 of the Anti-Monopoly Law, mainly considering whether the API operator should know or know that other operators have signed the same, similar or cooperative agreement with the same API distributor
.
Article 10 Exemptions If an API operator claims that his agreement can be applied to Article 15 of the Anti-Monopoly Law, he shall submit evidence that his agreement meets the statutory conditions stipulated in Article 15 of the Anti-Monopoly Law
.
The anti-monopoly law enforcement agency makes a judgment according to the specific circumstances of the case
.
Article 11 Leniency System Anti-monopoly law enforcement agencies encourage operators of APIs participating in horizontal monopoly agreements to proactively report the relevant situation of horizontal monopoly agreements and provide important evidence, and at the same time stop suspected illegal acts and cooperate with investigations
.
For business operators who meet the requirements for leniency, the anti-monopoly law enforcement agency can mitigate or waive the penalty
.
The specific standards and procedures for business operators to apply for leniency shall be governed by the "Interim Provisions on Prohibition of Monopoly Agreements" and the "Guidelines for the Application of Leniency System in Horizontal Monopoly Agreement Cases of the Anti-Monopoly Commission of the State Council
.
" Article 12 Industry Associations Industry associations shall not organize API operators to reach monopoly agreements, nor provide conveniences for API operators to reach monopoly agreements
.
Chapter III Abuse of Dominant Market Position The "Anti-Monopoly Law" prohibits operators with a dominant market position from engaging in behaviors that abuse their dominant market position and eliminate or restrict competition
.
To identify the abuse of dominant market position in the field of APIs, Chapter 3 of the Anti-Monopoly Law and the Interim Provisions on Prohibition of Abuse of Dominant Market Position apply
.
Under normal circumstances, it is first necessary to define the relevant market, analyze whether the operator has a dominant market position in the relevant market, and then analyze whether it constitutes an abuse of the dominant market position according to the individual case
.
Article 13: The determination of market dominance to determine whether an API operator has a dominant position in the relevant market shall be based on the determination or presumption that the operator has a dominant market position in accordance with Articles 18 and 19 of the Anti-Monopoly Law Analysis of the factors and circumstances
.
Combining the characteristics of the API industry, the following factors can be specifically considered: (1) The market share of API operators; (2) The relevant market competition; (3) The actual production capacity and output of API operators; (4) API operators The operator’s ability to control the API sales market or the procurement market; (5) The financial and technical conditions of the API operator; (6) The degree of dependence of the transaction counterpart on the API operator; (7) The actual and potential transaction counterpart The quantity and the ability of the counterparty to check and balance the API operators; (8) The difficulty of other API operators to enter the relevant market
.
When evaluating the market share of an API distributor, you can consider factors such as its sales, sales, inventory, and the proportion of the distributor's control of the production company's sales volume.

.
When there is evidence that an API operator has actual control over other operators, the market share of the API operator and the operator under actual control are generally combined for calculation
.
Article 14: Common abuses of market dominance From the perspective of law enforcement practices, common abuses of market dominance in the field of APIs include selling APIs at unfairly high prices, refusing to deal with counterparties, and restricting transactions with counterparties.
trading, tying products or attach unreasonable trading conditions at the time of the transaction, the differential treatment of the same conditions of the trading counterpart and so on
.
Article 15 Unfairly high prices of API operators with dominant market positions abuse their market dominance and sell APIs at unfairly high prices, which not only eliminates and restricts market competition, but also pushes up the market prices of APIs and related drugs and harms them.
The legal rights and interests of the counterparty and the interests of consumers are traded, and the national medical insurance fund is wasted
.
To analyze whether the above behavior constitutes the above behavior, the following factors can be considered: (1) The sales price is significantly higher than that of other operators selling the same type of API or comparable APIs under the same or similar market conditions, and the cost changes during the relevant period; ( 2) The selling price is significantly higher than the price of the same operator in other regions with the same or similar market conditions; (4) When the cost (purchase price) increases, the price increase of the sales of raw materials is significantly higher than the cost increase; (5) The sales of raw materials at high prices through other operators, such as transfer tickets
.
Article 16 Refuse to deal with API operators with dominant market positions, abuse their dominant market position, refuse to sell APIs without proper reasons, eliminate and restrict market competition, affect the normal supply of drugs, and harm the legitimate rights and interests of the counterparties and consumers Benefit
.
The following factors can be considered when analyzing whether the above-mentioned behavior is constituted: (1) There is no legitimate reason, in the process of dealing with the counterparty, the current sales volume of the counterparty is substantially reduced or the current sales of the counterparty are delayed or interrupted.
There is a transaction; (2) There is no legitimate reason to refuse to start a new transaction with the counterparty of the transaction; (3) There is no legitimate reason, after the API is underwritten, the refusal to deal with the counterparty of the transaction; (4) There is no legitimate reason, and restrictions are imposed Conditions, in a disguised form, make it difficult for counterparties to trade with them
.
Article 17 Restricted trading of API operators with dominant market position, abuses their dominant market position, and without justified reasons, restricts the counterparty of the transaction to only trading with it or only with the designated operator, eliminating or restricting market competition , Affecting the normal supply of drugs, harming the legitimate rights and interests of the counterparty and the interests of consumers
.
The following factors can be considered when analyzing whether the above behavior is constituted: (1) There is no legitimate reason, the counterparty of the transaction can only purchase or sell APIs, and no transaction with other operators is allowed; (2) The transaction is limited without a legitimate reason Persons can only purchase or sell APIs from their designated operators; (3) Without a legitimate reason, the transaction counterparty shall not be allowed to trade APIs with specific operators
.
Article 18 Tying: An API operator with a dominant market position abuses its dominant market position, tying products without proper reasons, eliminating or restricting market competition, and harming the legitimate rights and interests of the counterparty and the interests of consumers
.
To analyze whether the above behavior is constituted, the following factors can be considered: (1) Tying other APIs; (2) Tying pharmaceutical excipients, packaging materials, medical devices, etc.
; (3) Tying drugs; (4) Tying other commodities
.
Article 19 Attaching unreasonable trading conditions An API operator with a dominant market position abuses its dominant market position, attaching unreasonable trading conditions to transactions involving APIs, eliminating or restricting market competition, and damaging the legitimate rights and interests of trading counterparties And consumer interests
.
To analyze whether the above behavior constitutes the above behavior, the following factors can be considered: (1) require the drug manufacturer to sell all or part of the drug; (2) require the drug manufacturer to sell the drug in accordance with the specified transaction object, price, quantity and other conditions; ( (3) Require pharmaceutical manufacturers or distributors to provide drug revenue sharing; (4) Require unreasonable security deposits, or add other unreasonable expenses in addition to the price of raw materials; (5) Contract duration and payment methods for the sales of raw materials , Transportation and delivery methods, etc.
additional unreasonable restrictions; (6) additional unreasonable restrictions on the sales area and sales target of APIs or drugs; (7) additional unreasonable trading conditions that have nothing to do with the subject matter of the transaction
.
Article 20: Differential treatment of API operators with dominant market position, abuse of their dominant market position, without justified reasons, impose different trading conditions on counterparties with substantially the same conditions, eliminate or restrict competition, and damage the legitimate rights and interests of counterparties And consumer interests
.
To analyze whether the above behavior constitutes the above behavior, under the same trading conditions, the following factors can be considered: (1) The transaction price of the API or the discount given is significantly different; (2) The quality and grade of the API are significantly different; (3) The API is significantly different The payment method and delivery method of the transaction and other conditions that affect the counterparty of the transaction to participate in market competition are obviously different
.
Article 21.
Other abuses of market dominance behaviors where operators in the field of APIs purchase products at unfairly low prices, sell products at prices below cost, and other abuses of market dominance identified by the Anti-monopoly Law Enforcement Agency of the State Council.
The analysis is based on Chapter 3 of the Anti-Monopoly Law and the Interim Provisions on Prohibition of Abuse of Dominant Market Position
.
Article 22 Joint Abuse of Dominant Market Position Two or more API operators are responsible for the division of labor and cooperate with each other to implement the monopolistic behaviors stipulated in this chapter, which may constitute a joint abuse of market dominance.

.
To determine that two or more API operators have a dominant market position, factors such as market structure, relevant market transparency, degree of homogeneity of relevant commodities, and consistency of operator behavior should also be considered
.
Chapter IV Concentration of Undertakings The Anti-Monopoly Law prohibits undertakings from implementing concentration of undertakings that have or may have the effect of eliminating or restricting competition
.
The anti-monopoly review of the concentration of business operators in the API industry is not significantly different from that of other industries.
The concentration of business operators that meet the reporting standards in the "Regulations of the State Council on the Declaration Standards for the Concentration of Business Operators" (hereinafter referred to as the "Regulations") shall report to the State Council in advance.
The monopoly law enforcement agency declares, and if it fails to declare in accordance with the law, the concentration shall not be implemented
.
The State Council’s Anti-Monopoly Law Enforcement Agency, in accordance with the “Anti-Monopoly Law,” “Provisions,” and “Interim Provisions on the Review of Concentration of Undertakings,” review the concentration of undertakings in the field of APIs, and investigate and deal with the concentration of undertakings in violation of the law
.
Article 23.
Concentration of operators that fail to meet the reporting standards Due to the relatively small market size of some API varieties, the annual turnover of operators may not meet the reporting standards in the Regulations
.
However, when the number of operators of this type of API is small, and the market share and market concentration in the relevant market are high, the concentration implemented by the operators has or may have the effect of eliminating or restricting competition, and the operators participating in the concentration can actively declare
.
Where the concentration of business operators in the field of APIs does not meet the reporting standards of the "Regulations", but there is evidence that the concentration of business operators has or may have the effect of eliminating or restricting competition, the Anti-monopoly Law Enforcement Agency of the State Council shall conduct investigations in accordance with the law
.
Article 24.
Negotiations between Operators and Law Enforcement Agencies Regarding the concentration of operators that may meet the conditions in Article 23 of these Guidelines, API operators are encouraged to discuss relevant issues with anti-monopoly law enforcement agencies as soon as possible before implementing the concentration
.
Chapter V Abuse of Administrative Power to Eliminate and Restrict Competition The Anti-Monopoly Law prohibits administrative agencies and organizations authorized by laws and regulations that have the function of managing public affairs to abuse administrative power to eliminate or restrict competition
.
Abuse of administrative power to exclude or restrict competition in the API market shall be handled by the anti-monopoly law enforcement agency in accordance with the "Anti-Monopoly Law" and other relevant laws and regulations
.
Article 25 Abuse of administrative power to restrict transactions or restrict the free circulation of commodities.
Administrative agencies and organizations authorized by laws and regulations with the function of managing public affairs engage in the following acts to exclude or restrict competition in the API market, which are prohibited by the Anti-Monopoly Law Acts of: (1) Restrict or disguisely restrict units or individuals from operating, purchasing, and using APIs provided by their designated operators; (2) Setting discriminatory standards and policies for foreign API operators, and adopting discriminatory technical measures , Or adopt administrative licensing, filing, checkpoints, and shielding methods specifically for foreign API operators to restrict foreign API operators from entering the local market and hinder the free circulation of foreign APIs; (3) to set discriminatory qualifications Exclude or restrict foreign API operators from participating in local tendering and bidding activities through methods such as requirements, evaluation criteria, or non-disclosure of information; (4) Adopt unequal treatment with local API operators to exclude or restrict foreign API operators Investors or set up branches locally
.
Article 26: Abusing administrative power to force operators to engage in monopolistic activities.
Administrative agencies and organizations authorized by laws and regulations with the function of managing public affairs to force or in a disguised form to force API operators to engage in monopolistic activities are prohibited by the Anti-Monopoly Law.
Behavior
.
Article 27: Fair competition review administrative agencies and organizations authorized by laws and regulations that have the function of managing public affairs shall formulate market access and exit, industrial development, investment promotion, bidding, government procurement, business conduct norms, qualification standards, etc.
Regulations, regulatory documents, other policy documents and specific policy measures in the form of "one matter, one discussion" for the economic activities of market players in the field of APIs shall be subject to fair competition review in accordance with the provisions of the State Council
.
Chapter VI Supplementary Provisions Article 28 Scope of Application This Guide is applicable to upstream chemical raw materials and pharmaceutical intermediates required for the production of APIs and pharmaceutical excipients
.
Article 29 Interpretation of the Guidelines This Guidelines shall be interpreted by the Anti-Monopoly Committee of the State Council and shall be implemented as of the date of issuance
.