Recently, Jiu Zhou Tong's Jiu Zhou Tong Medical Device was fined for 'providing false information' in a bidding process at a hospital in Shenzhen, and is prohibited from participating in Shenzhen procurement for one year. Jiu Zhou Tong responded to a Caixin reporter that this event is a pending fact, appeal materials have been organized, and it is still under administrative reconsideration. This year, multiple listed companies have been fined for irregularities in bidding and procurement, and industry insiders state that companies need to pay more attention to compliance details in the bidding process.
According to Caixin, on September 6, the Shenzhen Financial Bureau issued a punishment decision. Jiu Zhou Tong, a pharmaceutical distribution giant, released a subsidiary Jiu Zhou Tong Medical Device Group Co., Ltd. which 'concealed the truth and provided false information' when participating in a bidding activity at a hospital in Shenzhen, and was fined and banned from participating in government procurement of Shenzhen for one year.
In response, Jiu Zhou Tong told Caixin reporters that this event is a pending fact and it is currently in the penalty defense period. The company has actively organized appeal materials and the matter is still under administrative reconsideration. Therefore, there is still uncertainty regarding the punishment result. The punishment mentioned above will not have a significant impact on the subsidiary.
This year, several medical listed companies or their subsidiaries have been fined in various levels or military bidding and procurement for 'collusion' or 'providing false materials'. An industry expert told Caixin that in the current bidding and procurement process, regulatory and verification methods are becoming more intelligent and networked. Non-standard operations by participating companies can easily be detected. Relevant companies should pay more attention to compliance construction and implementation in the bidding process to avoid being penalized in the bidding and procurement credit evaluation system for 'lose more because of a minor fault'.
Another subsidiary has been punished, Jiu Zhou Tong responded: currently appealing.
According to the administrative penalty decision recently released by the Finance Bureau of Futian District, Shenzhen, in the bidding of the 'Futian Traditional Chinese Medicine Anorectal Hospital (dome, bed, hanging tower) equipment project', Jiu Zhou Tong Medical Device Group Co., Ltd. (hereinafter referred to as 'Jiu Zhou Tong Equipment') provided 4 pieces of false information, including 3 acceptance forms and 1 user evaluation form. Therefore, the Finance Bureau of Futian District, Shenzhen has recorded Jiu Zhou Tong Equipment in the supplier's integrity file, imposed a fine of 37,717.5 yuan, and prohibited its participation in government procurement of Shenzhen for one year.
A Hubei pharmaceutical company executive familiar with the bidding and procurement process told Caixin reporters, 'Objectively speaking, in the past, it was difficult for bidding personnel to verify this kind of information, and Jiu Zhou Tong is a large company with numerous customer groups and participation in bidding and procurement activities across different regions, so omissions may be inevitable.'
Tianyancha shows that Jiu Zhou Tong Equipment is a subsidiary of listed company Jiu Zhou Tong Holdings. The company was established in 2012 and is primarily engaged in the manufacture of special equipment. So far, Jiu Zhou Tong Equipment has invested in 180 companies, and controls 256 companies in total, and has participated in 1,725 bidding projects.
However, in fact, this is not the first time that a subsidiary of Jointown Pharmaceutical Group has been penalized by the procurement authority. According to the information from the military procurement website, Ningxia Jointown Pharmaceutical Co., Ltd., Yunnan Jointown Medical Instruments Co., Ltd., and Beijing Jointown Pharmaceutical Co., Ltd., all subsidiaries of Jointown Pharmaceutical Group, have been penalized and prohibited from participating in corresponding military procurements for various violations, such as providing false materials, collusion, unclear response templates in bidding documents, and similarity of bid documents with other companies' content.
In response to this, Jointown Pharmaceutical Group stated to Caixin reporter that many public notices are not the final conclusion, and the related subsidiaries are actively appealing. They have all submitted an 'Appeal Letter' and are awaiting the appeal results. The punishments from the military procurement authorities, which may be involved, will not have a significant impact on the external conditions of the production and operation.
"The company has always adhered to legal and compliant operations. The above situations are only due to errors in product parameters and other information during the procurement bidding process, which are business-level issues. In response to the current situation, the company has formulated relevant control documents to regulate the bidding and tendering work in various regions, and will strictly implement measures to prevent similar behavior from happening again," added Jointown Pharmaceutical Group.
There have been many instances of violations in tendering and procurement this year. The industry emphasizes that companies need to pay extra attention to the details of bidding and procurement compliance.
In addition to Jointown Pharmaceutical Group, several pharmaceutical listed companies have been penalized for irregularities in tendering and procurement this year. This includes Sinopharm, Chinares Pharma, C.Q. Pharmaceutical Holding, Zhangzhou Pientzehuang Pharmaceutical, and other large pharmaceutical listed companies or subsidiaries, which have been temporarily prohibited from participating in military procurement activities for different durations. Chinares Pharma and C.Q. Pharmaceutical Holding previously stated that it would not affect the bidding and procurement of the group company. For more details, see the suspensions or cancellations of involvement in military procurement qualifications. Some involved pharmaceutical companies urgently stated that it would not affect their operations.
Regarding the suspensions of military procurement qualifications for multiple listed companies, Xu Yucai, a senior expert in medical reform, previously stated to Caixin reporter that although military procurement is relatively independent, when the relevant departments have information linkage, the involved listed companies and affiliated companies may receive more attention in future social bidding and procurement.
In addition, the National Office for Joint Procurement of Drugs announced on August 21 the handling results of the previous bromfenac bid-rigging and collusion incident. SSY Group and Apichope Pharmaceutical, and other involved enterprises have been temporarily suspended from participating in national procurement to varying degrees. Apichope Pharmaceutical has been ordered to return 266 million yuan of related purchase funds.
"Nowadays, in government bidding and procurement, bid documents and other materials have undergone electronic reform. After electronicization, many traces can be easily traced, such as IP addresses and electronic seals. All these details will be checked and recorded in relevant software platforms such as the Public Resource Trading Center. Once there is any omission, it may violate the relevant regulations," said a senior executive from a Hubei pharmaceutical company who is familiar with the bidding and procurement process.
The above-mentioned person also told Caifeng society reporters that in the current pharmaceutical procurement, companies will be required to sign a compliance commitment letter. All legal consequences will be borne by individuals and companies, and any violations in procurement will also affect the credit evaluation of pharmaceutical procurement. In addition, more new technologies are being applied in regulatory measures, and the main characteristics of regulatory measures are intelligence and networking, which also puts higher requirements on the participating companies and relevant personnel.
Guo Xinfeng, an expert in the pharmaceutical industry, told Caifeng society reporters that companies participating in pharmaceutical procurement now need to pay extra attention to the details of the procurement process. The construction of the procurement team and compliance training should also keep up with the times. They can no longer operate in the old-fashioned way, otherwise they may lose the relevant market.