A group of retail pharmacies may not boycott medical schemes who refuse to accept its trading conditions, the Competition Commission said on Thursday.
The commission ruled that United South African Pharmacies (Usap) — an association of retail pharmacies — had contravened the Competition Act in boycotting the Anglo American Corporation Medical Scheme (Aacmed) and the Engen Medical Fund.
The schemes had complained Usap had boycotted them after they refused to accept the discount the pharmacy group offered on chronic and acute medication, said the commission’s manager of compliance, Zodwa Ntuli, in a statement.
Under the boycott Usap’s members would not supply chronic and acute medication to the two scheme’s members.
Usap also placed the schemes on its C-list, which meant they were ”not recommended”.
The two funds were also refused credit, so scheme members had to pay cash or buy on agreed credit terms.
”These decisions were made mainly in an attempt to compel the said medical schemes to permit their members to purchase chronic medication from Usap members despite the fact that the two schemes individually did not agree to the discount offered by Usap,” said Ntuli.
The commission found this behaviour was unlawful in terms of the Competition Act as Usap had ”acted collusively”.
”It is unlawful for competitors to fix trading conditions of this nature, irrespective of what the reasons or the consequences are,” said commissioner Menzi Simelane.
”Assuming one were to consider the consequences, in this case the boycott was dangerous as it significantly affected the supply of chronic medication to members of the schemes, who may not only be sickly but old as well.
”Thus anti-competitive practices will not be tolerated, whether direct or indirect, especially if such are at the expense of consumers,” he said.
The commission has concluded a ”consent agreement” with Usap, which includes an administrative penalty of R250 000. This still has to be confirmed by the Competition Tribunal.
Under the agreement Usap may not deal with any medical scheme in contravention of the Competition Act.
Usap also has to send letters to Aacmed and Engen Medical Fund confirming they have been removed from the ”not recommended” list. — Sapa