Core Viewpoint - The State Administration for Market Regulation (SAMR) has prohibited the acquisition of Shandong Huatai Pharmaceutical Co., Ltd. by Wuhan Yuntong Pharmaceutical Co., Ltd., marking a significant regulatory action under China's Anti-Monopoly Law [1][2]. Group 1: Regulatory Action - This case is the fourth prohibition of a business concentration since the implementation of the Anti-Monopoly Law in 2008 and the first to prohibit a concentration that did not meet the reporting threshold [1]. - The SAMR has mandated that the parties involved take measures to restore the situation to its pre-concentration state [1]. Group 2: Market Impact - The concentration involves the drug "Papaverine Hydrochloride Injection," which is crucial for treating various vascular spasms and has no effective substitutes [1]. - Wuhan Yuntong has a dominant market share in the upstream raw material supply, controlling 90%-95% of the market from 2019 to 2022, indicating strong market power [2]. - The concentration is believed to have led to a significant increase in the price of Papaverine Hydrochloride Injection, with an average factory price rising over 400% from 2017 to 2018, and a further increase of 60%-65% in 2019 [2][3]. Group 3: Future Implications - The SAMR's decision aims to eliminate Wuhan Yuntong's control over the Papaverine Hydrochloride Injection market, promoting fair competition and protecting consumer rights [3]. - The case is currently under further review, with a deadline for completion set for August 18, 2025 [3].

Core Viewpoint - The State Administration for Market Regulation has prohibited Wuhan Yitong Pharmaceutical Co., Ltd. from acquiring shares of Shandong Huatai Pharmaceutical Co., Ltd. due to antitrust concerns, emphasizing the need to maintain competition in the market for hydrochloride poppy alkaloid injection [1][2] Group 1 - The acquisition was deemed to have an exclusionary and restrictive effect on competition in the hydrochloride poppy alkaloid injection market in China [1] - Wuhan Yitong is required to transfer its indirect holdings in Shandong Huatai Pharmaceutical to an unrelated third party by January 22, 2026, and must not participate in the management of Shandong Huatai during this period [1] - If the share transfer is not completed by the deadline, Wuhan Yitong must apply to the market regulator for an extension and provide reasons for the delay [1] Group 2 - By September 30, 2025, Wuhan Yitong must terminate its agency agreement for hydrochloride poppy alkaloid raw materials with Qinghai Pharmaceutical and cannot execute related agreements until this is resolved [2] - The ultimate controller of Wuhan Yitong has committed not to engage in any future operator concentration in the fields of hydrochloride poppy alkaloid raw materials and injections [2] - The market regulator retains the authority to supervise and inspect Wuhan Yitong and its ultimate controller's compliance with these obligations [2]