Interpretation of the Anti-Monopoly Guidelines for Pharmaceutical Sector: Key Risk Considerations

By: Hao Zhan, Ying Song & Ruichen Liu (AnJie Broad)

In this article, authors Hao Zhan, Ying Song & Ruichen Liu (AnJie Broad) examine China’s newly released Anti-Monopoly Guidelines for the Pharmaceutical Sector, officially issued in January 2025 after a six-month public comment process. The Guidelines comprise 55 articles across seven chapters and apply broadly to traditional Chinese medicine, chemical drugs, and biological products across the entire pharmaceutical value chain. The article provides a detailed interpretation of key provisions and offers insights based on real-world enforcement and judicial experience in China.

The authors highlight a more flexible stance in the final Guidelines toward joint R&D agreements, especially where reasonable restrictions are involved. Notably, Article 11 removes provisions from the draft that would have classified certain R&D restrictions as per se illegal. Instead, enforcement authorities are expected to assess these agreements on a case-by-case basis, examining necessity, proportionality, and market impact. While this indicates a more tolerant approach, the authors advise pharmaceutical companies to thoroughly evaluate such agreements for competitive risks before execution.

The Guidelines also directly address pay-for-delay (reverse payment) agreements, with Article 13 identifying them as potential horizontal monopoly agreements when unjustified financial compensation is involved. The Supreme People’s Court has affirmed its jurisdiction to review such agreements under the Anti-Monopoly Law. Compared to earlier interpretations, the final Guidelines place stronger emphasis on the substance and market effects of these agreements, rather than just formal commitments like refraining from patent challenges. The authors recommend companies carefully assess the justifiability of compensation and the potential market implications before entering such settlements…

CONTINUE READING…