China's "anti-blood survival" for medical devices

China issued the first medical device price monopoly case ticket. According to reports, the National Development and Reform Commission recently imposed a fine of 118.5 million yuan on the behavior of Medtronic (Shanghai) Management Co., Ltd. and its counterparts in dealing with and implementing the monopoly agreement on the price of medical devices in the fields of cardiovascular, reductive therapy and diabetes.

Antitrust enforcement is maintenance

Consumer interest killer

Medical devices are highly specialized, and there is a serious information asymmetry between ordinary consumers and producers and service providers, which leads to substantial restrictions on market bargaining power. In the governance of the medical market, the traditional approach is multi-sectoral regulation and coexistence and is dominated by industrial policies. However, the practice in the past few decades shows that industry supervision and industrial policies can not effectively control the medical market including medical devices. The competition policy dominated by anti-monopoly law enforcement should be the main focus of safeguarding consumer interests.

Since entering the Chinese market in 1996, Medtronic is a leader in the field of cardiovascular, restorative therapy and diabetes-related medical devices. Its maintenance of high-priced resale of related medical device products has hindered the normal functioning of the market price mechanism and increased the number of patients. burden.

Medtronic fixes the resale price of medical devices and the gross profit margin of platform makers through distribution agreements, distribution agreements, email notifications and verbal negotiations, and limits the minimum bid price of dealers and the lowest price that dealers resell to hospitals. This undoubtedly limits distribution. The competition between merchants limits the access of general consumers to relevant medical device services at a reasonable price/performance ratio. If this behavior restricting the resale price excludes or restricts market competition, it constitutes a vertical price monopoly agreement prohibited by Article 14 of the Anti-Monopoly Law.

China's "anti-blood survival" for medical devices

For product markets where information is asymmetrical and consumers lack bargaining power, antitrust enforcement that protects consumer interests is especially important. In the case that traditional multi-sector industry regulation and industrial policies cannot provide effective governance, anti-monopoly law enforcement should become a “killer” to safeguard the interests of consumers in the Chinese medical market.

More than 40 law enforcement officers were trapped for 6 hours, who gave the "Me Dun"

CCTV disclosed more specific details in the broadcast news: NDRC law enforcement officers conducted a surprise inspection of Medtronics in April this year. More than 40 law enforcement officers were trapped at Medtronic China headquarters for more than six hours, and Medtronic management and US headquarters. After more than a dozen communications, the company cooperated with the investigation. Although the domestic and foreign monopoly enterprises surveyed in the past have also engaged in "soft resistance", it is rare for Medtronic to openly oppose anti-monopoly investigations in a fierce manner that encloses law enforcement officers for more than six hours.

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