The State Administration for Market Regulation (SAMR) in China has unveiled a draft proposal for “Antitrust Guidelines for the Pharmaceutical Industry” and is currently soliciting public feedback until August 23, 2024. This comprehensive document, encompassing 55 articles across seven sections, is designed to clarify the foundational principles of anti-monopoly law enforcement within the pharmaceutical sector.
The Guidelines are crafted to deter monopolistic practices among pharmaceutical companies, ensuring fair market competition, fostering innovation, and safeguarding the interests of consumers and the broader public. They emphasize the importance of drug operators enhancing anti-monopoly compliance and instituting robust management systems, with industry associations playing a supportive role in bolstering self-regulation.
For online drug sales, the Guidelines stipulate that operators must not exploit data, algorithms, technological advantages, or platform rules to engage in monopolistic behaviors. They also explicitly prohibit a range of anti-competitive practices, including price-fixing, output or sales restrictions, market division, and restrictive agreements that hinder technological advancement or entry into the market.
The document outlines exemptions for certain practices, such as consignment sales and centralized drug procurement, and provides a pathway for exemptions under Article 20 (1) (1) of the Anti-Monopoly Law for joint research and development efforts that may otherwise be suspected of constituting a monopoly agreement. Antitrust enforcement agencies are also directed to consider consumer benefits when evaluating potential exemptions.
Furthermore, the Guidelines delineate actions that constitute an abuse of market dominance, such as unfair pricing, refusal to transact, or imposing unreasonable conditions. They also establish criteria for identifying coordinated market dominance through collaboration and provide detailed instructions for the declaration and handling of business concentrations that may impact market competition.
In recent years, SAMR has been proactive in its oversight, investigating and addressing over 20 cases of monopolistic agreements and abuses of market dominance in the pharmaceutical industry, involving notable entities such as China Grand Pharmaceutical and Healthcare Holdings Ltd (HKG: 0512; CGP) and Yangtze River Pharma.- Flcube.com
