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How should we avoid the five forms of compliance?
 
Author:中國銘鉉 企劃部  Release Time:2017-9-14 10:40:18  Number Browse:992
 
In recent years, the pharmaceutical industry has become the focus of anti-monopoly law enforcement in recent years.

The monopoly is divided into two forms: horizontal monopoly and vertical monopoly. Among them, the horizontal monopoly agreement refers to the agreements, decisions or other cooperative behaviors that are reached between operators who have competition relations. For drugs, often a particular cause requires a particular drug, and a more expensive consumer must accept it. So in drug on the market, easy to form the production or sales between the same kind of drug manufacturers, distributors or pharmacy by agreement between the collaborative behavior to drive up the price of horizontal monopoly.

It can be said that horizontal monopoly is a common problem in the compliance process of pharmaceutical industry. Pharmaceutical industry horizontal price-fixing form mainly has: fixed or improve the drug price, the collusion between bidders bidding, or raw materials purchasing market segmentation, boycotts, trading and reverse payment protocol. Such a monopoly is often found in essential drugs or in some clinical treatment.



Fix or raise drug prices

In the drug industry, the practice of fixing or increasing drug prices is common between drug manufacturers and sellers.

An operator who produces or sells similar drugs can agree on a price, so long as it restricts competition, it can lead to unreasonable prices. This unreasonable price can lead to the unfair transfer of drug consumers' incomes to the drug operators of the combined bidding.

case

In January 2016, the national development and reform commission of chongqing qingyang, the datong, jiangsu wto-day order, shangqiu huajie five companies and implement don't Piao alcohol piece of monopoly agreement in administrative penalty in accordance with the law and give as much as 8% of penalty proportion, fined a total of 3.9954 million yuan. According to disclosure, from April 2014 to September 2015, the five companies successively four meetings, negotiations don't Piao alcohol prices rise, agreed in 2014 to increase the price to not less than 18 yuan/bottle, and agreed in 2015 to 23.8 yuan/bottle.

The tenderer colluded the bid

The nature of colluding tendering is different because of different behaviors. In the pharmaceutical industry, the collusion bidding in the scope of horizontal price monopoly agreement mainly refers to the behavior of drug operators participating in bidding to collude with each other to raise the price of drugs.

Now countries around the world are mostly adopt the way of "take quantity procurement" to reduce the cost to reduce drug prices, while in the process of the drug public procurement, is prone to collusion between bidders bid behavior. Therefore, the measures to combat colluding are one of the main means of competition law enforcement, especially in developing countries with relatively high government expenditure as a proportion of GDP.

case

In May 2006, Mexico's competition commission requested information on the procurement of drug tenders from the Mexican social security agency (IMSS), Latin America's largest provider of health services. The material provided is evidence of complicity in IMSS's public procurement process. The survey focused on public bidding for two specific products, known as insulin and electrolyte solutions, between 2003 and 2006. The survey showed that there was frequent communication between bidders, especially during the time of the tender. In the end, the commission decided in 2010 to impose fines of 151.7 million pesos on the six drug companies, backed by Mexican courts.

Division of sales or raw material procurement

Sales market segmentation or raw materials procurement market though not direct price monopoly, but in the pharmaceutical industry of elasticity of demand is very small, divided into the two types of markets, makes the drugs and raw materials are limited in certain range, drugs or drugs raw material price is no longer affected by market competition, but by the impact of these members agreement. It destroyed the drugs and raw materials market price order, and the segmentation of market behavior damage deprives the choice of consumer, is driving up prices for raw materials eventually pay by consumers, which damage the interests of its.

case

In 2011, the national development and reform commission in the pharmaceutical industry in the first case is dealt with in shandong weifang antitrust enforcement of two drug companies control pharmaceutical raw materials market, forcing the downstream enterprises dramatically raise the illegal action of compound reserpine drug prices. The two companies were eventually fined $687,000 and $15.26 million respectively.

And in the national development and reform commission to implement don't Piao alcohol piece of monopoly agreements in the second case of antitrust penalty of the pharmaceutical industry, five members of the agreement in addition to the fixed price, also implemented a segmentation don't Piao alcohol sales market monopoly agreements behavior, don't Piao alcohol piece of eliminate or restrict market competition, have important effects on drug prices.

Boycott trade

Transverse boycott, in the pharmaceutical industry is independent of each other between drug manufacturer or distributor, in order to maintain mutual agreement or, to act in concert, refuses to common to rival trading behavior.

Specifically, on the one hand, the pharmaceutical industry association, through its members' unanimous refusal to accept a certain pharmaceutical company from its peers to join the association, in order to control the access of the drug market, for the purpose of market competition. Association, on the other hand, because of a certain drug firms "guild regulations", such as alone will be some sort of drug prices, while other association members agreed to the "illegal" drug firms out of society, thus keeping the drug, the original price.

case

Happened in July 2003, hangzhou good parity large pharmacy be boycotted case everyday, because of the pharmacy drug prices low destroyed by other competitors as guild regulations, a boycott by some suppliers, nearly 1000 kinds of commodities are stop supply, even joint on hospital part provinces and cities, to boycott the pharmacy. In addition, some pharmacies in hangzhou held a joint industry meeting to discuss the sanctions. The anti-monopoly law is regulated by the joint boycott to limit the orderly competition in the pharmaceutical industry.

Reverse payment agreement

Reverse payment protocol behavior refers to the patentee and the defendant in a patent infringement lawsuit (potential patent infringer) to reach a settlement agreement on patent disputes, potential patent infringer agreed not to enter the market in a certain time period, and by the patent holder to Pay the remuneration behavior, the behavior also can be more accurately referred to as the patent fee Delay behavior (Pay - for - Delay).

These agreements are widespread in the patent medicine manufacturers and generic drug company require generics companies delay or give up the generic drugs, at the same time give the certain economic compensation, in order to maintain the patent medicine manufacturers high monopoly profits. In our country, the monopolistic behavior of this type has not been found for a while. But it has been shown that multinational pharmaceutical companies in China have privately signed a counterpayment agreement with Chinese generics manufacturers, only to end up without success.

case

The federal trade commission estimated in 2010 that a patent deferred agreement would cost American consumers nearly $3.5 billion a year. As the patent protection period for traditional core types of drugs approaches, from 2009 to 2020, a large number of drug patents expire, and the global drug market has reached the climax of drug patents. In this period, a large number of patent drug manufacturers are threatened by the market of generic drug companies, and it is very likely that they will make such monopolistic behaviors in order to maintain their own monopoly. (the writer is from the law department of Beijing university of Chinese medicine)

 
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