FTC to Fine 5 Drug Wholesalers over Bid Rigging

Jiji Press

16:59 JST, March 26, 2023

TOKYO (Jiji Press) — The Fair Trade Commission has imposed penalties totaling some ¥627 million on five drug wholesalers over rigging bids for contracts for hospitals in the Kyushu region.

In addition to the surcharges, the antimonopoly watchdog also slapped the five firms — Alfresa Corp., Kyushu Toho Co., Shoyaku Co., Tomita Pharmaceutical Co. and Astem Inc. — with orders to prevent recurrences on Friday.

Atol Co. was also found to have been involved in the bid-rigging, but escaped punishment under a leniency program as it reported the antimonopoly law violation voluntarily to the FTC before the start of its probes.

According to the FTC, the six companies, in an attempt to secure profits, determined in advance the winners of contracts for supplying drugs to 31 hospitals in seven prefectures in Kyushu run by entities including the National Hospital Organization from June 2016 at the latest to November 2019.

The FTC said that the bid-rigging kept the contract prices high, effectively limiting competition.

Contracts to supply drugs for the 31 hospitals in 2016-2019 totaled around ¥85 billion. Bid-rigging took place for most of the contracts, according to the FTC.

Officials of the watchdog said that the collusion may have affected revisions of government-set drug prices and caused heavier burdens on consumers.

Alfresa parent Alfresa Holdings Corp. and Kyushu Toho parent Toho Holdings Co. released statements online apologizing for the bid-rigging.