China punishes bid rigging enterprises in centralized medicine procurement

BEIJING, Aug. 21 (Xinhua) -- Six pharmaceutical enterprises have been punished for colluding in a bidding process in China's centralized procurement of medicines program, according to the National Healthcare Security Administration on Wednesday.

Investigations of the suspected crimes of the enterprises and relevant groups and individuals involved in the collusion scheme are underway, the administration said in a statement.

Prior investigation found that in the process of the seventh batch of national centralized procurement of medicines, the six bidding enterprises targeting a specific kind of medicine, as well as several individuals from an organized group and some pharmaceutical agents, had either organized or participated in bid rigging.

By signing agency agreements, negotiating bid prices, and promising to share benefits, the bidding enterprises and the agents made arrangements concerning the winning and losing enterprises in the bidding process, a practice that is suspected of violating procurement bidding documents and relevant laws, the statement said, while adding that the violation had resulted in losses for medical insurance funds.

The statement also confirmed that overpaid funds resulting from the collusion had been recovered from the enterprises. In addition, the four original winning companies had been disqualified, while all six participating enterprises had been blacklisted and suspended from taking part in future centralized procurement processes.