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China Investigates First Drug Monopoly Case
   2016-01-28 20:18:23    CRIENGLISH.com      Web Editor: Hou Limei

China Central Television reports five pharmaceutical companies are punished for monopolistic practices on Thursday, January 28, 2016. [Photo: Screenshot of CCTV]
China has punished five pharmaceutical enterprises for monopolistic practices.

China's Cental Television revealed that from April 2014 to September 2015, these companies held multiple meetings and reached an agreement on the monopoly.

According to the agreement, they raised the price of Allopurinol, a critical drug, to four times of its original price. They also managed to divide the nationwide market into three parts under their control.

Wu Dongmei with the Anti-Monopoly Bureau of National Development and Reform Commission, further elaborates on their violations.

"These enterprises producing Allopurinol should be in a competitive relationship and run their businesses independently. The medicine price should be based on market competition, which will benefit the consumers. However, these enterprises sat together, fixed a price and then divided the market into their own sales territories. Thus, their competitive relationship is dissolved and the price was set favor of the producers, not the consumers."

The five companies were fined 4 million yuan, over 600-thousand USD.

The Chinese government from June last year scrapped long-standing state price controls on most medicines, as part of market-oriented reforms.

Allopurinol is used in the management of gout and other conditions associated with too much uric acid in the body, such as kidney disease.

China only has three enterprises that produce this medicine, all of which are among the five fined companies.

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