On December 22nd, the Shanghai Municipal Market Supervision Bureau issued the Decision on Administrative Punishment on the grounds of monopolizing four pharmaceutical companies, namely Shanghai Shangyao No.1 Biochemical Pharmaceutical Co., Ltd., Wuhan Huihai Pharmaceutical Co., Ltd., Wuhan Kede Pharmaceutical Co., Ltd. and Hubei Minkang Pharmaceutical Co., Ltd., with the penalty amount exceeding 1.2 billion yuan.
The investigation by Shanghai Market Supervision Bureau also found that Wuhan Huihai Pharmaceutical Co., Ltd., Wuhan Kede Pharmaceutical Co., Ltd. and Hubei Minkang Pharmaceutical Co., Ltd. belong to the same actual controller.
The three enterprises in Wuhan Huihai were fined 762 million yuan this time. The reporter found that Wuhan Huihai received a ticket in May this year.
monopolize
On social platforms, many patients spit out that the price of polymyxin B sulfate for injection is too expensive, and a few grams of a bottle sells for 2303 yuan. A user’s father is sick and uses 5 pieces a day.
It is understood that this drug specializes in killing Acinetobacter baumannii and Pseudomonas aeruginosa, and there is no substitute in the market. It must be used after the above bacteria are infected. Although the price is expensive, I have to accept it.
However, there are also patients who can buy imported products, the price is only 300 yuan-400 yuan, and the effect is just as good.
Patients are used to the fact that the price of imported products is higher than that of domestic products, but in this product, the price of domestic products is much higher than that of overseas products.
According to the statistics of the third party, in 2022, the weighted average price of polymyxin B sulfate for injection in other countries and regions is 65 yuan/branch, and the net price in China market is 35 -44 times of this price.
The truth behind this is that Wuhan Huihai Department manipulated and monopolized imported raw materials, and the raw materials purchased from overseas 73 yuan/gram -94 yuan/gram were gradually pushed up to 18,000 yuan/gram-35,000 yuan/gram through price increases. Finding the biochemical production of medicine, the biochemical production of medicine only earns processing fees, and Wuhan Huihai sells it to all parts of the country. Although all places are bidding, the retail price is more than 2,000.
Wuhan Huihai not only monopolizes the sale of polymyxin B sulfate for injection, but also uses the secret song.
On the evening of May 28th, the State Administration of Market Supervision published on its official website the administrative penalty decision on the case of Yuanda Pharmaceutical and Wuhan Huihai reaching and implementing a monopoly agreement and abusing market dominance.
According to the investigation by the General Administration of Market Supervision, since 2010, only Yuanda Pharmaceutical and Shanxi Zhendong Taisheng Pharmaceutical Co., Ltd. have the qualification to produce norepinephrine and epinephrine in China. Wuhan Huihai actually controls the sales of norepinephrine and epinephrine in Shanxi Zhendong Taisheng through underwriting.
These two companies are competitors, and should have provided quality services or competitive prices in the market to promote the benign development of the market.
But the two companies have joined forces.
According to the penalty decision, from June 2016 to July 2019, Yuanda Pharmaceutical and Wuhan Huihai reached and implemented a monopoly agreement on the sale of norepinephrine bitartrate (hereinafter referred to as norepinephrine) and epinephrine.
Yuanda Pharmaceutical sells norepinephrine injection and epinephrine hydrochloride injection to Wuhan Huihai at a low price, and then repurchases them at a high price; Yuanda Pharmaceutical requires related pharmaceutical companies to sell norepinephrine injection and epinephrine hydrochloride injection to Wuhan Huihai at low prices, and then resell them at high prices by Wuhan Huihai.
As a result, the relevant pharmaceutical companies can’t buy this kind of raw materials from channels other than Yuanda Tianqing, and the supply of raw materials and the sales of preparations are also controlled by Yuanda Pharmaceutical, which pushes up the prices of emergency rescue drugs norepinephrine injection and epinephrine hydrochloride injection, increases the cost of patients’ medication and the national medical insurance expenditure, and harms the interests of patients and social public interests.
According to the previous report of Health Times, since 2015, the prices of most first-aid drugs have been rising rapidly, with a small increase of three times and a large increase of nearly 60 times. For example, norepinephrine increased nearly 4 times, cedilanid increased 25 times, phosphoryl iodide increased 49 times, and phosphoryl chloride increased 51 times.
Wuhan Huihai
In the former case, Wuhan Huihai was in a dominant position, while the latter was in a subordinate position. In the former case, Wuhan Huihai was confiscated and fined 762 million yuan, while in the latter case, the illegal income of Wuhan Huihai was confiscated and fined 4126800 yuan.
Wuhan Huihai was rarely reported before. According to the disclosure of the regulatory authorities, Wuhan Huihai, Wuhan Kede and Minkang Pharmaceutical are the companies actually controlled by Li Meilin and Annababy Zeng.
Wuhan Huihai not only monopolizes the sale of polymyxin B sulfate for injection, but also uses the secret song.
Wuhan Huihai Pharmaceutical Co., Ltd. belongs to Hubei Minkang Pharmaceutical Group. official website introduced that the company originated from the famous "Xingshengxiang" medicinal material number in eastern Sichuan and western Hubei at the end of Qing Dynasty. At the beginning of 1954, "Xingshengxiang" and two other medicinal materials "Yi Anshun" and "Yi ‘an" jointly established Yichang Minkang Pharmaceutical Factory, the largest pharmaceutical enterprise in eastern Sichuan and western Hubei at that time.
In August 1954, Yichang Minkang Pharmaceutical Factory merged with Shanghai Fei’s (private) pharmaceutical factory, in 1986 Minkang Pharmaceutical Factory merged with Yichang Limin Chemical Factory, and in 1994 it merged with Yichang No.4 Pharmaceutical Factory. In October of the same year, Yichang Minkang Pharmaceutical Co., Ltd., a Sino-foreign joint venture, was established with Singapore Meizuo Private Co., Ltd. and Singapore Universe Private Co., Ltd., and in September 2003, it was restructured into a Singapore-owned enterprise, Hubei Minkang Pharmaceutical Co., Ltd.
According to the latest industrial and commercial data, in December 2021, Hubei Minkang Pharmaceutical Group Co., Ltd., as a new shareholder, held 66% equity of Hubei Minkang Pharmaceutical Co., Ltd. Zeng Yi is the major shareholder of Minkang Group, holding 85% of the shares.
Annababy Zeng is the son of Li Meilin, and both of them have little public information. In 2019, Xiaogan. com published an article "Merrill Lynch: Dormancy and Xu Li". Li Meilin was a Yunmeng person and started a successful business abroad. At the beginning of 2010, Li Meilin really felt the change and development potential of Yunmeng County when he returned to his hometown to visit relatives, and he had the intention to invest in Yunmeng. The Yunmeng county government attached great importance to it, and relevant departments organized special class personnel to rush to Wuhan to get in touch with her. Inspired by nostalgia and affection, in April 2010, Hubei Merrill Lynch Pharmaceutical Co., Ltd. settled in the county economic development zone, covering an area of 300 mu. Committed to the research and development of pharmaceutical excipients, new chemical raw materials and preparations. Li Meilin also moved Wuhan Huihai, which was originally located in Wuhan, back to Yunmeng.
disastrous effect
There is a world of difference between the profits generated by sub-operation and monopoly.
Take polymyxin B sulfate for injection as an example. In 2022, the sales income of Shangyao Biochemical was 4.14 billion yuan, and the illegal income was 338 million yuan. The sales of Wuhan Huihai, Wuhan Kede and Minkang Pharmaceutical last year were 138 million yuan, 907 million yuan and 248 million yuan respectively, and the illegal income was 47.58 million yuan, 617 million yuan and 2.05 million yuan respectively. The sales revenue of this medicine is 5.414 billion yuan, and the illegal income is 1 billion yuan.
Partners in this chain can also reap huge profits. In 2019, SAIC Biochemical requested to increase the processing fee from 140.4 yuan/piece (including tax) to 200 yuan/piece. In January, 2023, the parties again demanded that the processing fee be increased from 200 yuan/Branch to 230 yuan/Branch. This processing fee is more expensive than the sales price in many overseas countries. In addition, all aspects of product sales are likely to be stakeholders. As medical practitioners, the price difference between China and foreign countries is clear at a glance.
Wuhan Huihai skillfully compiled the network, plundered the excess benefits, and suffered the medical insurance funds and patients.
However, illegal business operations will eventually be countered. In June this year, Zhendong Pharmaceutical responded to investors. Shanxi Zhendong Taisheng Pharmaceutical Co., Ltd., a subsidiary of the company, had previously supplied Wuhan Huihai Pharmaceutical Co., Ltd. at the price agreed in the contract. The price was reasonable, and the company did not participate in the follow-up sales process. At present, the company no longer sells the above APIs to Wuhan Huihai.
Proofreading: Peng Qihua