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PATHCARE AGREEMENT, TO REDUCE PRICE FOR COVID-19 PCR TESTS,
CONFIRMED AS AN ORDER OF THE TRIBUNAL
The Tribunal has confirmed, as an order, a consent agreement whereby another leading pathology laboratory, namely: Drs Dietrich, Voigt, Mia & Partners and Dr WJH Vermaak Incorporated (“PathCare”) agrees to reduce its price for COVID-19 PCR tests. PathCare will charge no more than R500 (including VAT) per test, with immediate effect.
The Tribunal has recently confirmed two separate consent agreements whereby Ampath and Lancet Laboratories respectively agreed to immediately reduce and cap their prices for COVID-19 PCR tests at R500 (including VAT).
In terms of its consent agreement, concluded with the Competition Commission (“the Commission”), PathCare agrees to:
- stop charging the price of R850 (VAT incl.) which formed the subject matter of a complaint by the Council for Medical Schemes (“CMS”);
- stop charging R750 (VAT incl.), the price charged since 1 December 2021 after the Commission commenced its investigation;
- reduce the price to no more than R500 (including VAT) for two years. PathCare may charge or negotiate a lower price; and
- submit a compliance report to the Commission every three months.
PathCare does not admit that it charged excessive or exorbitant prices in contravention of section 8(1)(a) of the Competition Act, read together with Regulation 4 of the Consumer Protection Regulations. Nothing in the consent agreement amounts to or should be construed as an admission of any facts, conduct, liability or wrongdoing by PathCare.
Background
In October 2021, the Council for Medical Schemes lodged a complaint with the Commission, alleging that private laboratories were charging exorbitant and unjustifiable prices for a COVID-19 test i.e. between R850-R900.
The Commission’s investigation revealed that prices have decreased across pathology suppliers and that pathology groups have been earning significant profits since March 2020. The significant increases in profitability indicated to the Commission that excessive pricing on COVID-19 PCR tests may be present.
During the investigation, PathCare voluntarily reduced its price to R750 (VAT inclusive). However, the Commission concluded that PathCare could profitably sell the tests for R500 (VAT inclusive). On 08 December 2021, the Commission sent letters of demand to pathology groups, including PathCare, to immediately reduce the price to no more than R500 (VAT inclusive) failing which it would launch an urgent application in the Tribunal for appropriate relief aimed at the reduced price of COVID-19 PCR tests to R500 (VAT inclusive).
On 13 December 2021, PathCare responded to the Commission’s request and agreed to the capped price of R500 (VAT inclusive). Consequently, the Commission and PathCare concluded the consent agreement.
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