[4] Compiled from: Red Star News
 
On May 28, the State Administration for Market Regulation imposed administrative penalties on Grand Pharma (China) Co., Ltd. and Wuhan Huihai Pharmaceutical Co., Ltd. for reaching and implementing a monopoly agreement and abusing market dominance. It ordered Grand Pharma and Wuhan Huihai to cease illegal activities, confiscated Grand Pharma's illegal gains of 149 million yuan, and imposed a fine of 136 million yuan; confiscated Wuhan Huihai's illegal gains of 30.9248 million yuan, and imposed a fine of 4.1268 million yuan.

 
 

Case review
According to the penalty decision, through the monopoly agreement, Grand Pharma has long been the sole supplier of norepinephrine bitartrate (hereinafter referred to as norepinephrine) active pharmaceutical ingredient and epinephrine active pharmaceutical ingredient in the Chinese market, preventing relevant preparation manufacturers from purchasing this type of active pharmaceutical ingredient from channels other than the parties. The supply of active pharmaceutical ingredients and the sale of preparations were also controlled by Grand Pharma, driving up the prices of the emergency drugs norepinephrine injection and epinephrine hydrochloride injection, increasing patient medication costs and national medical insurance expenditures, and harming the interests of patients and the public.
 
According to the investigation by the State Administration for Market Regulation, from June 2016 to July 2019, the parties reached and implemented a monopoly agreement with Wuhan Huihai Pharmaceutical Co., Ltd. (referred to as Wuhan Huihai) regarding the sale of norepinephrine bitartrate (referred to as norepinephrine) active pharmaceutical ingredient and epinephrine active pharmaceutical ingredient; from May 2010 to April 2021, the parties abused their dominant position in the Chinese norepinephrine active pharmaceutical ingredient and epinephrine active pharmaceutical ingredient markets, without justifiable reasons, requiring preparation manufacturers to accept unreasonable trading conditions such as selling norepinephrine injection and epinephrine hydrochloride injection to them at low prices, providing rebates to them, and selling preparations in regions and at prices specified by them.
 
After multiple communications between Grand Pharma and Wuhan Huihai, they reached an oral agreement in June 2016, stipulating that Wuhan Huihai would stop selling norepinephrine and epinephrine active pharmaceutical ingredients.
 
Grand Pharma compensated Wuhan Huihai in two ways: first, by selling norepinephrine injection and epinephrine hydrochloride injection to Wuhan Huihai at low prices and then repurchasing them at high prices; second, by requiring relevant preparation companies to sell norepinephrine injection and epinephrine hydrochloride injection to Wuhan Huihai at low prices, which Wuhan Huihai then resold at high prices.
 
In response, in November 2020, the State Administration for Market Regulation initiated an investigation into Grand Pharma (China) Co., Ltd. and Wuhan Huihai Pharmaceutical Co., Ltd. for suspected monopolistic practices. On May 28 of this year, the administration made an administrative penalty decision in accordance with the law.
 
 
《[1] The People's Republic of ChinaAnti-Monopoly Law
Article 22
Operators with market dominance are prohibited from engaging in the following acts of abusing their market dominance:
(1) Selling goods at unfairly high prices or purchasing goods at unfairly low prices;
(2) Selling goods at below-cost prices without正当 justification;
(3) Refusing to deal with trading counterparties without正当 justification;
(4) Without justifiable reasons, restricting the counterparty to trade only with itself or only with a designated undertaking;
(5) Tying goods or imposing other unreasonable trading conditions during transactions without正当 justification;
(6) Applying differential treatment to trading counterparties with equivalent conditions in terms of transaction prices or other trading terms without正当 justification;
(7) Other abuses of a dominant market position as determined by the anti-monopoly enforcement agency under the State Council.
An undertaking with market dominance shall not use data, algorithms, technology, platform rules, etc. to engage in the abusive conduct specified in the preceding paragraph.
For the purposes of this Law, "market dominance" refers to a market position held by an undertaking that enables it to control the price, quantity, or other trading conditions of commodities in the relevant market, or to hinder or affect the ability of other undertakings to enter the relevant market.
 
 
[1] The author's perspective
Abuse of market dominance not only tramples on fair trading regulations and disrupts the order of fair competition, but also infringes upon the interests of other undertakings and consumers. At the same time, it plunders social resources, leads to inefficiency in social development, causes losses to overall social welfare, and hinders social progress. From the above laws and regulations, it can be seen that the means and forms of abusing market dominance are diverse, such as selling or purchasing goods at unfair prices, selling at below-cost prices, etc. However, the essence is that after an enterprise gains a certain market advantage, it abuses this advantage to engage in unfair transactions with other market entities or to exclude competitors.
 
In this case, Grand Pharmaceutical became the sole supplier of two active pharmaceutical ingredients through monopoly agreements, not only controlling the market price of these ingredients but also attempting to control the supply-demand structure of other suppliers and purchasers, disrupting market balance. Ultimately, it is consumers who are affected, with deeper impacts on medical insurance and social stability. Thus, market dominance is not inherently wrong, but once abused, the consequences are unimaginable.