NaCC sniffs for price fixing in 200 pharmacies

 

If registered pharmacies have been fixing prices of medicine and robbing people of their right to accessing quality health care, they are in for a tough time as the Namibia Competition Commission has already started investigating them.

 The probe is being launched on the Pharmaceutical Society of Namibia (PSN) and over 200 registered pharmacies.

These investigations have been spurred by allegations that the PSN, a voluntary association of pharmacies, has a rule that requires pharmacies to impose a uniform 50% mark-up on the dispensing of medicine.

 

“Information provided to the commission has suggested that the PSN strictly enforces the 50% mark-up requirement and warns pharmacies of possible sanctions for purportedly transgressing ethical rules and making themselves guilty of touting if such pharmacies deviate from the 50% mark-up requirement,” said the commission yesterday.

The commission said pharmacies that have disregarded this order have been subjected to investigations and disciplinary proceedings by the PSN.

Price fixing is illegal in Namibia as per the terms of the Competition Act.

 

The setting of a uniform price between pharmacies which are supposed to be trading in competition with each other is a concern for consumer welfare since it removes competition and diminishes product choices.

 

The commission said when prices are fixed by competitor pharmacies, consumers have no choice but to pay the fixed price which reduces pressure on pharmacies to reduce the cost of medicine.

 

This can result in unjustified and increased consumer cost for medicine and ultimately reduces access to affordable health care.

 

“The investigation is therefore aimed at determining whether the alleged conduct of the PSN and registered pharmacies could potentially amount to a decision by an association or undertakings (being the PSN) or an agreement or concerted practice between undertakings (the pharmacies) which amounts to the fixing  of purchase or selling prices or other trading conditions pertaining to the dispensing of medicine as envisaged in terms of section 23(1) read with section 23(2)(a) and or 23(2)(b) and section 23(3)(a) of the Competition Act,” said the commission.

 

Meanwhile, the commission has stressed that it is still gathering relevant evidence and has recently served a notice of such an investigation to the PSN and registered pharmacies.

 

Both parties have been given a chance to make their presentations within 30 working days to the commission regarding the matter.

 

At the end of the investigation and depending on evidence, the commission will determine whether or not the conduct of the PSN and the pharmacies amounts to a contravention of the Competition Act.