In a sweeping crackdown on pharmaceutical price-fixing, Chinese regulators have imposed record fines on drugmakers accused of exploiting the pandemic for profit.
China’s antitrust regulators have levied a record $49 million in fines against four pharmaceutical companies for colluding to inflate the price of a critical raw material used in COVID-19 treatments, authorities announced this week.
According to the Tianjin Municipal Administration for Market Regulation, the companies — Zhejiang Xianju Pharmaceutical, Tianjin Pharmaceutical, Jiangsu Lianhuan Pharmaceutical, and Xi’an Guokang Ruijin Pharmaceutical — coordinated price hikes on dexamethasone sodium phosphate beginning in November 2021. The steroid is a key ingredient in medications used to treat severe COVID-19 cases.
The fines were distributed as follows: Zhejiang Xianju was fined $27 million, Tianjin Pharmaceutical $10 million, Jiangsu Lianhuan $8 million, and Xi’an Guokang Ruijin $4 million.
Authorities identified businessman Guo Xianguo as the mastermind behind the scheme. He reportedly approached each company individually with a plan to raise prices sequentially in order to avoid detection by antitrust investigators.
The price of the raw material subsequently spiked from $1,000–$1,250 to as high as $5,300 per kilogram. The companies also restricted supply to manufacture an artificial shortage, regulators said.
Tianjin Pharmaceutical drew particular scrutiny, as this marks the fourth time the company has violated antitrust laws. Its cumulative fines now exceed $23 million.
In a landmark move, three company executives were each fined $83,000, while Guo himself was fined $695,000 — marking the first time individuals have been penalized under China’s antitrust law. Regulators said the case signals the formal launch of China’s new "dual-penalty" enforcement mechanism, targeting both corporations and individuals involved in monopolistic practices.
Source: Weixin
