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Drug firms fined for monopolizing sales

By Li Xiaoshu (Global Times)

08:42, November 15, 2011

A pharmacist picks drugs for customers at a drugstore in Hainan Province. Manufacturers usually sell drugs at high profit margins. China's top economic planner has fined two companies for monopolizing the sales of the base ingredient used to make drugs that treat high blood pressure. Photo: CFP

China's top economic planner has penalized two private pharmaceutical companies with a fine of nearly 7 million yuan ($1.1 million) over monopolizing sales and manipulating prices of a popular high blood pressure drug, the National Development and Reform Commission (NDRC) announced on its website Monday.

It is regarded as the country's first severe penalty against oligopolies, who often reap huge profits with the aid of government subsidies and rules that result in only minimal competition, the State-run Central China Television (CCTV) reported Monday.

Weifang Shuntong Pharmaceutical Factory Co and Weifang Huaxin Pharmaceuticals Trading Co, both in Shandong Province, have violated the nation's Anti-Monopoly Law and Price Law by raising the price of promethazine hydrochloride, the base ingredient for compound reserpine tablets, a hypertension medicine listed among China's national essential drugs, according to the NDRC.

The NDRC's anti-monopoly office said the two companies have made windfall profits by raising the antihistamine's price from 200 yuan per kilogram to up to 1,350 yuan per kilogram, after they signed an exclusive sales agreement with China's two and only promethazine hydrochloride manufacturers on June 9 this year.

Though the NDRC has ordered the firms to stop their illegal activity and to dissolve the contract, the monopolistic behavior has led to a supply squeeze for the lower end 0.08 yuan-each compound reserpine tablets. With annual sales of more than 9 billion tablets, the low-end drugs are used by approximately 200 million high blood pressure patients, the Ministry of Health data shows.

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helen at 2011-11-15203.82.94.*
With sales of medicine at hospitals going up 20 times the ex factory prices, many middlemen and officials are profiteering from this. The Chinese people are the victims of such black operation.The CCDI should get into the picture quick before more scandals and scams enrage the people. This transition stage in China has given rise to 'anything for money' mentality and profiteers should be punished severely.Does Beijing have the will to do this!?

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