China issues anti-monopoly guidelines for drugmaking API market

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BEIJING, Nov 18 (Reuters) - China on Thursday issued guidelines aimed at stamping out monopolies in the active pharmaceutical ingredients (API) market, saying that such behaviour had become common.

"Monopolistic behaviour" in the API industry, which precedes the finished medical product, is common due to the small number of manufacturers and high market concentration, the State Administration of Market Regulation (SAMR) said in a statement published alongside the guidelines.

"(Monopolistic behaviour) affects the prices and stable supply of drugs and harms fair market competition and the interests of consumers," SAMR said, adding that it has cracked down on monopoly cases for multiple API products.

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China will step up anti-monopoly regulation, state media quoted a top-level meeting, chaired by President Xi Jinping, as saying in August.

China issued guidelines regulating API companies' pricing behaviour in 2017, but monopolies still emerged in the sector, state media outlets had said.

The new guidelines say smaller API companies are encouraged to report to authorities their market concentration deals, such as mergers and acquisitions, when they may undermine market competition, even though the companies' annual turnover is lower than the threshold for obliged reporting.

Authorities should also investigate such deals, even though the companies involved are smaller, said the guidelines, issued by the State Council's anti-monopoly committee.

Upstream raw materials as well as intermediates are also subject to the guidelines.

China is the world's biggest manufacturer and exporter of API, according to the National Development and Reform Commission.

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Reporting by Roxanne Liu and Brenda Goh; editing by David Evans and Nick Macfie

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