Antitrust Guidelines for APIs are coming!

On October 13, the State Administration for Market Regulation issued the "Guidelines for Anti-monopoly in the Field of APIs (Draft for Comment)" (hereinafter referred to as the "Guidelines") to solicit opinions from the public until October 30. The "Guide" has six chapters and 22 articles. It defines and stipulates monopoly violations in the field of APIs in great detail. It aims to promote the healthy development of the API industry, maintain the order of competition in the API market, and protect the interests of consumers and the public interest. , Prevent and stop monopolistic behavior in the field of APIs, and promote scientific and effective anti-monopoly supervision.

Prohibition of abuse of dominant market position

The "Guide" points out that API operators should abide by the relevant provisions of the "Anti-Monopoly Law" and prohibit reaching and implementing horizontal monopoly agreements with competitors. For API manufacturers, they should avoid entering into joint production agreements, joint purchase agreements, joint sales agreements, joint bidding agreements, etc. with other API manufacturers that have a competitive relationship to negotiate the production quantity, sales quantity, sales price, and sales target of the API Such as the main content of the agreement; should avoid third parties (such as API distributors, downstream drug manufacturers) communicating with sensitive information such as API sales prices, production scales, production and sales plans, etc.

In terms of vertical monopoly agreements, API manufacturers and distributors should avoid direct resale price restrictions on downstream distributors, pharmaceutical manufacturers, etc. through oral agreements, written letters, emails, price adjustment notices, etc.; adopt fixed distributor profits Disguised restrictions on resale prices by distributors, drug manufacturers, etc., by means of discounts, discounts, and rebates; threatened by means of canceling rebates, reducing discounts, or even refusing to supply or reselling agreements, and restricting downstream distributors and drug manufacturers ; Incentive measures such as providing rebates, prioritizing supplies, and providing support, impose resale price restrictions on downstream distributors and pharmaceutical manufacturers.

At the same time, API manufacturers or distributors with dominant market positions may abuse their market dominance, for example, selling APIs at unfairly high prices, refusing to sell APIs, restricted transactions involving APIs, and partnerships involving APIs. Sales, additional unreasonable trading conditions involving raw materials, differential treatment involving raw materials, and joint abuse of market dominance. If it is determined that the abuse of market dominance involving APIs, the provisions of Chapter 3 of the Anti-Monopoly Law shall apply.

Adhere to "strict and heavy and quick" handling

It is worth noting that the safety and vital interests of the people are related to the guaranteed supply and price stability of raw materials and medicines. Monopolistic behaviors in the field of APIs in my country are frequent, and operators have a high degree of awareness of monopolistic behaviors. API operators have implemented monopolistic behaviors, especially those who knowingly violated the "Anti-Monopoly Law" and deliberately evaded anti-monopoly investigations. In accordance with the provisions of Articles 46, 47, and 49 of the Anti-Monopoly Law, the agency will take into account the nature, extent and duration of the violations and other factors, and deal with them severely.

In recent years, the monopoly of raw materials has become commonplace. Monopoly of raw materials such as chlorpheniramine, glacial acetic acid, and calcium gluconate has been fermented. Due to rising prices of raw materials and monopoly of raw materials, some drugs have been discontinued, resulting in a shortage of clinical use.

In response to this, the state has continuously stepped up the rectification of monopolistic behavior of APIs and investigated and dealt with many 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 raw materials, issued the largest fine in the field of raw materials since the implementation of the "Anti-Monopoly Law", and distributed three calcium gluconate raw materials. Enterprises have imposed administrative penalties for monopolistic activities, with a total fines of 325.5 million yuan.

Under high-pressure regulatory policies, the API market is gradually becoming standardized. With the promulgation of policies such as consistency evaluation, mass procurement and related review, the status of APIs has become more and more important. The price of high-quality raw materials is expected to rise steadily. At the same time, the global new crown pneumonia epidemic continues to Ferment, and the global API market is also changing. From the perspective of the international market, some of China's APIs have achieved growth against the trend, and both volume and price have risen, driving the performance growth of related companies. From the perspective of the domestic market, the API sector is on a continuous upward trend. Industry insiders believe that the new crown epidemic will have a short-term impact on the volume and price of APIs. In the long run, specialty API companies are expected to gain more development opportunities.

Regarding the anti-monopoly of APIs, the relevant person in charge of the State Administration for Market Regulation also stated that APIs and drug production and operation companies must not engage in monopoly agreements and abuse of dominant market positions prohibited by the Anti-Monopoly Law. The market supervision department will continue to increase anti-monopoly law enforcement in the field of raw materials and pharmaceuticals, severely crack down on various forms of monopoly behaviors such as monopoly price increases, and monopolistic behaviors in the field of raw materials and pharmaceuticals, especially those that deliberately avoid anti-monopoly investigations. Adhere to strict, heavy and quick handling, effectively protect the interests of consumers, and maintain a fair competition order in the raw materials and pharmaceutical markets.