The Tianjin Municipal Market Regulation Committee, under the guidance of the State Administration for Market Regulation (SAMR), imposed administrative penalties for anti-competitive behavior, targeting individual Guo XX and four pharmaceutical companies: Tianjin Tianyao Pharmaceutical Co., Ltd., Zhejiang Xianju Pharmaceutical Co., Ltd., Jiangsu Lianhuan Pharmaceutical Co., Ltd., and Xi'an Guokang Ruijin Pharmaceutical Co., Ltd. Legal actions are also being pursued against individuals directly responsible for the monopoly agreement.
The investigation, initiated in April 2024, uncovered that starting in November 2021, Guo XX organized meetings and site visits to coordinate with representatives from the four companies. They reached a verbal agreement to halt price competition and jointly raise the price of dexamethasone sodium phosphate, a key raw material. As a result, the four companies simultaneously stopped supplying the market, reducing availability and driving up prices. Between February 2022 and March 2024, the price of dexamethasone sodium phosphate surged from 8,000 yuan per kilogram to 13,000 yuan per kilogram, violating fair competition laws and negatively impacting consumers and public interests.
In accordance with China's Anti-Monopoly Law, the Tianjin Municipal Market Regulation Committee imposed the following penalties: a maximum fine of 5 million yuan for Guo XX, confiscation of illegal profits from the four companies, and fines equal to 8% of each company's prior year's sales, totaling 355 million yuan. In addition, each of the four individuals responsible for the monopoly agreement was fined 600,000 yuan.
Notably, the fines varied by company. Tianyao Pharmaceutical, the first to apply for leniency, voluntarily disclosed the monopoly scheme and provided crucial evidence, resulting in an 80% reduction in its fine, bringing it down to about 26.43 million yuan. Lianhuan Pharmaceutical, which applied for leniency second, received a 30% reduction, lowering its fine to 43.13 million yuan. In contrast, Ruijin Pharmaceutical and Xianju Pharmaceutical did not submit leniency applications and faced the full 8% fine based on their 2023 annual sales. Ruijin Pharmaceutical was fined approximately 4.02 million yuan, while Xianju Pharmaceutical was penalized with a hefty fine of around 172 million yuan.
Dexamethasone sodium phosphate is a key ingredient in dexamethasone sodium phosphate injection, a corticosteroid used to treat inflammatory, allergic, rheumatic, and autoimmune diseases. The drug is included in both the National Essential Medicines List and the National Medical Insurance Drug List. In 2023, it was part of the ninth batch of the National Centralized Drug Procurement program and was widely used for the clinical treatment of severe COVID-19 cases during the pandemic.
The market regulator deemed the companies' monopoly behavior particularly severe, as dexamethasone sodium phosphate formulations were used in COVID-19 treatment, making them essential for public health. SAMR emphasized that such conduct directly impacts national health and public welfare. The regulator reiterated its commitment to strengthening anti-monopoly enforcement in the pharmaceutical sector, imposing strict penalties, and holding responsible parties accountable. This will ensure fair competition, protect consumer interests, and prevent the abuse of market power.
