THE Competition Commission on Sunday announced an agreement with two of the three major pathology laboratory companies, Ampath and Lancet, to reduce, with immediate, effect that price of Covid-19 PCR tests to R500 from R850 following a three-month investigation that revealed excessive profiteering.
Competition Commissioner Tembinkosi Bonakele said at a media briefing that the investigation started in October following a complaint from the Council for Medical Schemes that the price of PCR tests, widely used by doctors and other institutions, and which are also becoming a requirement for international travel, was “unfairly inflated, exorbitant and unjustifiable”.
He said that the Commission had not yet reached agreement with the third of the large pathology laboratory companies Pathcare, but he hoped a settlement would be reached in the future.
He said pathology laboratories had been operating under a block exemption from competition legislation since March 2020 that were granted under the emergency powers by government to various essential services to collaborate and co-ordinate responses to the pandemic.
Before the pandemic, the PCR test was priced at around R1400, but the block exemption from competition regulations allowed the price to fall to R850.
The commission’s investigation showed, however, that supplier prices to the pathology companies had fallen since the start of the pandemic, new cheaper technology had become available and that the companies were dealing with much higher volumes than of tests, which should have enabled them to lower the prices of the PCR tests.
He said that following the investigation, the commission had considered the option of pursuing the pathology companies for excessive pricing and fining them, but this type of investigation and proceedings would have taken at least a year or two to conclude.
Considering the fast-changing nature of the pandemic, and pace of technological change in the sector, and what would be the best benefit for consumers, the commission instead opted to reach agreements with the companies on a drastic reduction in prices, said Bonakele.
He said the commission had received reports of shocking abuse of PCR prices, including “abuse of travellers,” as travellers faced no option but to conduct PCR tests to travel. ‘We will be watching the airports,” he said yesterday.
He said the commission was going to ask the Minister of the Department of Trade, Industry and Competition, Ebrahim Patel, to review the block exemption from competition laws given the health service providers in 2020.
BUSINESS REPORT ONLINE