NDRC fines Medtronic for price monopoly

The National Development and Reform Commission’s (NDRC) recent administrative penalty against Medtronic (Shanghai) management for the company’s price monopoly signalled a new focus of antitrust enforcement, said a legal expert.

“The targets of the NDRC’s antitrust investigations have been rolled over one after another, and the medical device and drug sectors are the next major target industries,” Alan Zhou, a partner of Global Law Office in Shanghai, told China Business Law Journal. “Vertical monopoly agreement fixing resale price and limiting minimum resale price is the major focus in NDRC’s investigation”.

This has been the first decision published by the NDRC among a series of antitrust investigations regarding medical devices and medical enterprises since late 2016. Medtronic’s execution and implementation of monopoly agreement fixing and limiting minimum resale prices was found to have violated the Antitrust Law. Accordingly, the NDRC ordered Medtronic to immediately cease the implementation of its monopoly agreements and imposed a fine of RMB118.5 million (US$17 million).