Big 3 pathology labs accused of collusion


By Lynne Altenroxel and Jillian Green

The country's three biggest pathology laboratories have been accused of price-fixing.

Two of those named in a complaint submitted to the Competitions Commission on Monday - Lancet and Ampath - have already been investigated over allegations into kickbacks.

They are alleged to have paid doctors in return for test referrals.

Now the Treatment Action Campaign (TAC) has accused Lancet, Ampath and Pathcare of using their domination of the National Pathology Group (NPG), which negotiates tariff increases, to operate as a virtual monopoly.

In a submission to the Competitions Commission, the Aids activists allege that:

  • The private hospital groups, which own substantial shares in the three pathology laboratories, use their power in annual tariff negotiations with medical aid representatives to increase prices. The submission argues that, because the hospitals own shares in the pathology labs, it is in their interests for the price of tests to be as high as possible.

  • Netcare has shares in Ampath laboratories, while the Mediclin and Afrox hospital groups have shares in Pathcare and Lancet.

  • There is evidence that the three dominant laboratories - which together control about 80 percent of the market - do not compete against each other.

  • The laboratories use low-cost tests but charge consumers and funders for high-cost tests.

  • They also use newer, cheaper technologies for conducting tests but charge customers for older, more expensive methods.

    "We submit that the NPG and/or its dominant members have or are engaging in price-fixing," the document states.

    "We urge the commission to make recommendations to the minister of health for greater regulatory oversight over private laboratories."

    The TAC submission follows a spat between an independent pathology lab, Toga Laboratories, and certain of its competitors. Toga last year significantly undercut its competitors by offering three Aids-related blood tests at a cost of R550, instead of well over R1 000.

    The tests are a major part of the cost of providing anti-retroviral treatment.

    Lancet Laboratories was not in a position to comment on Monday but instead directed all media queries to the NPG.

    The NPG referred queries to its chairperson, Tony Harrison, who is also a member of Lancet Laboratories.

    Harrison said he had no information regarding the submission made by the TAC and "contested that the three laboratories were working as a cartel".

    "The three do not collude with each other, other than in charging the Board of Healthcare Funders' tariff for tests. This issue of fixing of fees must be looked at by the South African Medical Association and the BHF, not by individual labs," he said.

    National pathology director at Ampath, Dr Jan van Rooyen, said the allegation by the TAC was "completely inaccurate".

    Hospital fees were negotiated annually between the South African Medical Association and the BHF, and not with hospital groups.

    "During those negotiations, the lowest recommended fee is decided upon... and this is the fee we charge," he said.

    Van Rooyen also said the other allegations were not true.

    Pathcare was unavailable for comment on Monday.


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