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Drug firms face industrywide probe by price regulator

By Wang Yanfei (China Daily) Updated: 2016-05-07 02:36

China's top price regulator will soon launch "large-scale and systematic" anti-trust investigations into drug companies, both foreign and domestic, after it recently summoned them to collect data and information, a source close to the regulator said on Friday.

The National Development and Reform Commission may require more drug companies to provide information after Pfizer, a US pharmaceutical company, and a number of distribution companies and medical device manufacturers were summoned, according to the source, who requested anonymity due to lack of authorization to speak on the matter.

The commission, which is in charge of China's anti-trust affairs, is collecting evidence to see whether these companies might have violated regulations regarding competition, according to the source. But this does not mean these companies have violated the law, the source said.

The NDRC could not be reached for immediate comment, and Pfizer refused to comment.

A spokesman for a foreign drug-making company, who declined to be identified, said the move led by the commission is "regular work" and that the company will work with the commission, if necessary.

The commission has prepared for a long time for the current move, which is intended to improve order in the drug market, the source said.

As China has sought to improve its public healthcare system and make its medical products and services more affordable, the world's largest pharmaceutical companies and local competitors have felt pressure that has triggered a slowdown in sales growth, Bloomberg reported on Friday.

But analysts said China should put in place a more transparent and market-oriented pricing plan as the government emphasizes lowering drug prices and improving the public health system.

Premier Li Keqiang said during an executive meeting of the State Council last month that healthcare reform has entered a crucial stage, with reducing drug prices listed among key tasks.

Li stressed the importance of establishing a drug price tracing system to improve drug management, ensure the quality of drugs and make prices transparent.

Early in January, the NDRC imposed total fines of 4 million yuan ($616,000) on five domestic pharmaceutical companies for acting in collusion to fix the prices of a common drug.

The NDRC first levied fines on the pharmaceutical industry in 2011, when two companies were ordered to pay a total of 7 million yuan in fines.

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