First Chinese pharma firm fined for price fixing in the US

A US court has fined North China Pharmaceutical Co (NCPC) $162 million for price fixing, the first time a Chinese drug company to be fined in an US antitrust case.

Two other Chinese ''Vitamin C'' manufacturers, Weisheng Pharmaceutical Co Ltd and China Pharmaceutical, who were also named in the lawsuit, had last week settled the case out of court by offering to pay an agreed $22.5 million.

NCPC, one of China's four-largest vitamin and antibiotic suppliers, currently produces over 430 kinds of antibiotics, semi-synthetic antibiotics, pharmaceutical intermediates, vitamins, biotechnology products, veterinary and neutraceuticals both in bulk and in finished products.

NCPC and its ''Vitamin C'' production unit Hebei Welcome Pharmaceutical Co were ordered by a jury in Brooklyn, New York to pay $162.3 million in fines after being found guilty in a conspiracy to fix prices of ''Vitamin C'' tablets in the US.

The lawsuit filed last month by two US companies alleges since late 2001, Chinese ''Vitamin C '' manufacturers have acted in collusion to intentionally limit supply of ''Vitamin C '' to the US market in order to manipulate prices.

The judgment was based on the lawsuit filed by a Texas-based animal-feed company and a New Jersey-based vitamin distributor, who have accused Chinese ''Vitamin C'' exporters of working together to raise prices for years. The ''Vitamin C'' prices in the US were raised from $2.5 per kg to $15 per kg.

The raw vitamins sold by the Chinese exporters were used in the US as an ingredient in food and beverage products, consumer vitamin supplements and animal products, according to the plaintiffs.

Though NCPC said that it would appeal the ruling, neither did it nor its production arm Hebei Welcome Pharmaceutical challenge the allegation that they had fixed prices.

Instead, they argued that their government forced them to coordinate and fix production and price.