Mo­nop­oly prices for med­i­cal de­vices pose threat to the in­ter­est of pa­tients

China Daily (Hong Kong) - - COMMENT - THE CHINA UNIT

of US com­pany Medtronic, a lead­ing sup­plier of high-end med­i­cal de­vices, was fined 119 mil­lion yuan ($17.3 mil­lion) for mo­nop­o­lis­tic prac­tices, the Na­tional De­vel­op­ment and Re­form Com­mis­sion an­nounced on Wed­nes­day. Bei­jing News com­mented on Saturday:

The Chi­nese an­titrust au­thor­i­ties is­sued their first pun­ish­ment in the med­i­cal de­vice in­dus­try to Medtronic, which was fined for fix­ing prices by seek­ing mo­nop­oly agree­ments with its deal­ers.

The com­pany even at­tempted to thwart the of­fi­cial in­ves­ti­ga­tion. Dur­ing a “surprise” visit by Chi­nese anti-mo­nop­oly en­forcers, the com­pany’s China branch re­fused to co­op­er­ate and stopped the in­ves­ti­ga­tors from tak­ing any ac­tion for over six hours.

Im­ped­ing an in­ves­ti­ga­tion un­doubt­edly con­sti­tutes a se­ri­ous vi­o­la­tion of China’s Anti-Mo­nop­oly Law, so do the com­pa­nies’ mo­nop­o­lis­tic prac­tices in the coun­try’s med­i­cal in­stru­ment man­u­fac­tur­ing mar­ket, which is now the world’s sec­ond largest.

Price-fix­ing can cause big­ger dam­ages to fair com­pe­ti­tion than a tech­no­log­i­cal mo­nop­oly. In Medtronic’s

case, its China unit had re­sorted to be­hind-the-scene op­er­a­tions to make il­licit gains and grab mar­ket share, ac­cord­ing to the an­titrust in­ves­ti­ga­tion that lasted for al­most a year.

Such tricks have played a ma­jor role in driv­ing up the prices of high-end med­i­cal de­vices to un­usu­ally high lev­els in China, pos­ing a grave threat to the in­ter­ests of not just other mar­ket play­ers but also pa­tients.

Not just the man­u­fac­tur­ers and their lo­cal deal­ers, some hos­pi­tals were re­ported to have a stake in the sales of im­ported med­i­cal equip­ment. Their con­spir­acy comes at the cost of pa­tients. The Medtronic scan­dal should be a wake-up call to China’s top an­titrust en­forcer, who has pledged to pay closer at­ten­tion to an­titrust in­ves­ti­ga­tion of the phar­ma­ceu­ti­cal and med­i­cal equip­ment in­dus­tries.

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