Anti-monopoly health enforcement and compliance trends

The healthcare industry has gradually become a key focal point of the antitrust law enforcement authorities in China. In recent years, the National Development and Reform Commission (NDRC) and the State Administration for Industry and Commerce (SAIC) have incorporated antitrust efforts in the healthcare industry as a focus of their work. As of the end of April 2017, the NDRC and SAIC had fined 11 healthcare enterprises for a total of about RMB133 million (US$19.3 million).

The authors foresee the two law enforcers potentially raising a more forceful ‘antitrust windstorm’ in the healthcare sector this year, and possibly investigating and penalizing in succession certain well-known pharmaceutical and medical device enterprises. Through the investigation and handling of a series of cases, the NDRC and SAIC have accumulated a significant amount of experience in the healthcare sector, and healthcare enterprises are about to face a more serious antitrust compliance challenge.

Q: What are the distinctive features of the already punished healthcare industry antitrust cases? A: The antitrust cases that have been investigated and handled in the healthcare industry manifest the following defining features: (1) the enterprise entities that have been subjected to penalties are diverse, involving enterprises of various natures, such as private enterprises, Sino-foreign equity joint ventures, wholly foreign-owned enterprises, state-owned enterprises, etc.; (2) the types of antitrust acts are variegated, with the law enforcement authorities penalizing not only the abuse of dominant market position but also the violations of reaching and implementing of horizontal or vertical monopoly agreements; and (3) the cases extend over a broad area, covering both the upstream and downstream of the industry chain, with the recipients of penalties including active ingredient producers, pharmaceutical producers and distributors, medical device producers, etc.

Michael Gu is a partner and Sun Sihui is an associate at AnJie Law Firm