Yangtze River was fined 764 million!

The penalty document pointed out that the pharmaceutical production and sales subsidiaries of Yangtze River all participated in monopolistic behaviors to varying degrees, and the decision-making and implementation of monopolistic behaviors were subject to the unified leadership and deployment of the parties and did not have independent will
.

It is also mentioned that Xu Jingren, the legal representative of Yangtze River, concurrently serves as the director of the pricing committee and the legal representative of the pharmaceutical production and sales subsidiary, which fully demonstrates that the will of the subsidiary to participate in monopolistic behavior is subordinate
.

How to avoid "price maintenance" from becoming a monopoly?

According to the "Anti-Monopoly Law of the People's Republic of China", if a business operator has reached and implemented a monopoly agreement in violation of the provisions of this law, the anti-monopoly law enforcement agency shall order it to stop the illegal act, confiscate the illegal income, and impose more than one percent of the previous year’s sales A fine of less than 10%; if the monopoly agreement reached has not been implemented, a fine of less than 500,000 yuan may be imposed
.
Because of the real monopoly behavior, the number of fines for Yangtze River is also based on this
.

Yang Zijiang also stated that it is normal price maintenance during the judgment, such as "preventing low-price competition between distributors and pharmacies, and encouraging distributors and retail pharmacies to increase investment in the distribution link to ensure the quality of pharmaceutical products", but this is also one by one.
The reason for the rejection by the General Administration of Market Supervision was basically mentioned in the above content
.

Behind the huge fines, some pharmaceutical companies also feel panic, especially how to maintain the price of medicines normally?

Shi Lichen, the person in charge of Beijing Dingchen Pharmaceutical Management Consulting Center, analyzed that in the pharmaceutical industry, the maintenance of channel and terminal prices and ensuring stable prices are often done by marketers of pharmaceutical companies, and the prices are agreed in the channel cooperation agreement and terminal cooperation agreement.
Part is also normal
.
If the normal price is suspected of monopoly, then all pharmaceutical companies will not be able to operate normally
.
What needs to be clarified are the key points that Yangtze River Pharmaceutical is punished: the company is in a strong position, the product is a best-selling product, the punishment (the establishment of penalties, the implementation of penalties, the effective implementation of monopoly agreements), the fact that fixed and restricted commodity resale prices exist, Eliminates and restricts competition, significantly increases product prices, and seriously damages consumers' legitimate rights and interests and social public interests
.

He pointed out that these behaviors in the pharmaceutical industry may be classified as monopolies: 1.
Companies that implement the controlled sales model may be judged as suspected monopolies: 2.
Companies with exclusive products, if they have signed relevant price fixes with channel terminals Agreements with restrictions will also be suspected of monopoly; 3.
The best-selling products and terminals of strong companies (especially the top 5 companies in the industry) sign price increase agreements, such as raising the price of drugs sold in pharmacies and signing exclusive agreements, also Will be suspected of monopoly
.

Shi Lichen believes that fixing and limiting commodity resale prices, eliminating and restricting competition, significantly increasing product prices, and harming consumers' legitimate rights and interests and social public interests will be the key risks that pharmaceutical companies will guard against when conducting agreements and marketing activities in the future
.

Changes in anti-monopoly trends in the pharmaceutical industry

In the pharmaceutical industry, punishments for suspected monopoly have occurred in API manufacturers/distributors in recent years
.

Not long ago, on April 2, 2021, Tianyao Co.
, Ltd.
was suspected of reaching a monopoly agreement for fluocinolone acetic acid raw materials, and Tianjin Municipal Market Supervision and Administration Commission planned to impose administrative penalties on it, with a fine of up to 44.
02 million yuan;

In January 2021, Simcere Pharmaceuticals was fined 100.
7 million yuan for abusing its dominant position in the sales market of Batroxobin concentrate APIs;

On November 18, 2020, Wanbond Pharmaceutical Group Zhejiang Pharmaceutical Sales Co.
, Ltd.
was fined 2.
474 million yuan for adding unreasonable trading conditions in the production and sales of bromhexine hydrochloride raw materials due to abuse of its dominant market position;

On April 14, 2020, the State Administration for Market Regulation issued an anti-monopoly investigation and punishment.
The three distributors of raw material medicine calcium gluconate for injection, Kanghui, Puyunhui, and Apollo, were fined and confiscated 325.
5 million due to monopoly;

In 2018, Erkang Pharmaceutical's wholly-owned subsidiary was suspected of monopolizing chlorpheniramine APIs and was confiscated 2,394,700 illegal income, fined 8,479,400, and confiscated a total of 10 million yuan
.

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For a relatively long period of time, due to the market restrictions of API companies, China has only a few production and supply companies, but the number of downstream companies is as many as hundreds.
When supply exceeds demand, manufacturers or distributors form alliances to speculate the API market.
Prices or monopoly supply are extremely common
.

In response to the chaos in the field of APIs, China has also vigorously rectified the monopoly of APIs in recent years
.
The punishment of Yangzijiang Pharmaceuticals this time shows that the anti-monopoly trend of pharmaceuticals is blowing towards preparations.
Enterprises should avoid controlled sales, especially monopolistic behaviors such as fixed drug resale prices and limited drug resale prices
.