The state issued a document to severely punish monopolistic procurement of pharmaceutical devices
Government units abuse administrative power restriction, monopolize consumables, medicine and equipment procurement and distribution and bidding, severely punished.
A number of local health committees were named and notified
Recently, the NMPA issued the Case of the Special Action to Stop the Abuse of Administrative Power to Exclude and restrict Competition in 2022 (the third Batch), which once again named several local government units for abusing administrative power to exclude and restrict competition and other violations.
Since 2022, the NMPA has issued three cases of special actions to stop the abuse of administrative power to exclude or restrict competition.
After years of clampdown, the NMPA issued a notice in June this year to solicit comments on the Draft of the Regulations on Stopping Abuse of Administrative Power to Exclude and Restrict Competition (hereinafter referred to as the Draft).
The Draft makes it clear that administrative organs, including provincial and municipal governments and the health commission, as well as organizations authorized by laws and regulations to manage public affairs shall not abuse their administrative power to exclude or limit competition.
Once it is confirmed that an act of excluding or restricting competition has been carried out, the directly responsible person in charge and other directly responsible persons shall not only be punished according to law, but also be handed over to the discipline inspection and supervision organ with jurisdiction.
The draft also makes clear provisions on seven categories of violations involving the abuse of administrative power by administrative organs to exclude or restrict competition, including local protection in the field of bidding, designated transactions and market barriers in product market access.
Abuse of administrative power to eliminate and restrict competition in seven categories of violations.
(Draft for soliciting opinions in 2022)
I. To restrict or restrict in disguised form the units or individuals to operate, purchase and use the goods and services provided by the operators designated by them (hereinafter collectively referred to as “goods”)： |
（i）To restrict or restrict in disguise the operation, purchase and use of commodities provided by specific operators by explicitly requiring, implying, refusing or delaying administrative examination and approval, repeating inspection, denying access to platforms or networks, etc. |
（ii）To restrict or restrict in disguised form the operation, purchase and use of commodities provided by specific operators by limiting the location, ownership form and organizational form of bidders. |
（iii）Without the basis of laws and regulations, by setting up unreasonable project repositories, list repositories, alternative repositories, qualification repositories and other means, to restrict or restrict the operation, purchase and use of the commodities provided by specific operators. |
（iv）Other commodities that are restricted or restricted in a disguised form to the operation, purchase or use of commodities by units or individuals provided by their designated business operators. |
II. To prevent other business operators from entering the relevant market or apply unequal treatment to other business operators to exclude or restrict competition. |
III. Hindering the free flow of goods between regions： |
（i）Discriminatory charging items, discriminatory charging standards, or discriminatory pricing or subsidy policies shall be set for goods from other places. |
（ii）To stipulate technical requirements and inspection standards for non-local commodities different from those of similar local commodities, or adopt discriminatory technical measures such as repeated inspection and repeated certification of non-local commodities to hinder or restrict the entry of non-local commodities. |
（iii）When adopting administrative license and filing specifically for non-local commodities, or administrative licensing or filing for non-local commodities, set different licensing or filing conditions, procedures, time limits, etc., to hinder or restrict the entry of non-local commodities into the local market. |
（iv）To set up checkpoints, set up shielding through software or the Internet, and other means to hinder or restrict the entry of non-local goods or the transportation of local goods. |
（v）Using standards to conduct acts that impede the free flow of goods. |
（vi）Any other act that impedes the movement of goods between regions. |
IV. Exclude or restrict operators from participating in bidding and other business activities: |
(i)Failure to publish tendering and bidding information in a timely, effective and complete manner according to law. |
（ii) Making it clear that non-local operators cannot participate in specific bidding. |
(iii) To set discriminatory qualification requirements or evaluation standards for the operators participating in the bidding. |
(iv) To restrict operators from participating in tendering and bidding in disguise by setting qualifications, technical and commercial conditions that are incompatible with the specific characteristics and actual needs of the bidding project or have nothing to do with the performance of the contract. |
（v）Other acts that exclude or restrict business operators from participating in bidding and other business activities. |
V. To exclude, restrict, force or in disguised form force foreign operators to invest or set up branches locally: |
(i) Refusing, forcing or in disguised form forcing foreign business operators to invest or set up branches locally. |
（ii）In the absence of laws and regulations, it makes or puts forward unreasonable requirements on the scale and method of local investment by non-local operators, as well as the address and business model of the establishment of branches. |
(iii) To stipulate different requirements for investment, scale of operation, mode of operation, payment of taxes and fees between non-local operators and local operators in terms of investment, scale of operation, mode of operation and payment of taxes and fees, and apply discriminatory treatment in terms of production safety, energy conservation and environmental protection, quality standards, etc. |
(iv) Other acts that exclude, restrict, compel or in disguised form compel foreign operators to invest locally or establish branches. |
VI. To compel or in a disguised form to compel business operators to engage in monopolistic acts as stipulated in the Anti-monopoly Law. |
Ⅶ. To formulate and promulgate regulations containing contents excluding or restricting competition in the form of measures, decisions, announcements, notices, opinions, minutes of meetings, letters, etc. |
These abuses of administrative power to limit and exclude competition, for whatever “purpose”, are extremely unhealthy for the industry as a whole. From the attitude of the national ministries and commissions, it is not difficult to see that the pharmaceutical industry anti-unfair competition, anti-monopoly and other actions are imperative.
China is encouraging China end uses for more domestic products in latest years. Thus, more and more overseas manufacturers are planning localization in China. BradyKnows localization team has extensive experiences in facility establishment, audit, supplier evaluation, manufacturing, registration, and marketing in China. Pls feel free to let us know any questions on China entry via info@bradyknowsmedical.com
By Lian Mengjun，Medical Device Distributors Alliance
Translated & edited | Bradyknows
