China industry body quizzes medical device makers over pricing

China industry body quizzes medical device makers over pricing

BEIJING - A Chinese industry group is collecting information on the pricing and business practices of foreign and local makers of medical equipment for the government in a survey that sources said was unusual in the amount of detail it sought.

Two industry sources who have seen the questionnaire said it was unclear if regulators were about to investigate China's US$20 billion (S$25.4 billion) medical devices market following multiple probes into corruption and possible price fixing in the pharmaceuticals sector.

But one of the sources, an executive at a foreign biotechnology firm, said the questions on pricing led him to believe one of its aims was to determine if companies were setting minimum prices for vendors, which could violate China's 2008 anti-monopoly law.

The survey was commissioned last month by the Commerce Ministry's anti-monopoly bureau, said Xu Shan, deputy director for international cooperation at the government-backed China Association for Medical Devices Industry (CAMDI).

Xu said she was not aware of any formal investigation into the sector. While the association's survey did not ask questions about corruption, Xu said regulators would likely focus on such practices at some stage.

"In the future, there will be even stricter rules," Xu told Reuters in a telephone interview, declining to elaborate on what those rules might be.

"The rules should likely not be restricted to price fixing, but will also target commercial bribery," added Xu.

The association represents some 3,000 companies that make medical equipment or healthcare items - from magnetic resonance imaging (MRI) scanners to bandages. The survey was sent to all association members but not all had responded, Xu said.

Lawyers have said Chinese industry bodies frequently seek information from companies as a precursor to a formal probe.

The China Automobile Dealers Association, for example, said last week it was collecting data on the sale of foreign cars for the National Development and Reform Commission (NDRC).

The NDRC is responsible for enforcing anti-trust rules on pricing and has spearheaded many of the recent probes that have spanned milk powder to jewellery as well as medicines.

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