Competition Commission launches investigation into alleged price fixing by pharmacies
The Namibian Competition Commission this week announced that it has commenced with an investigation for price fixing against the Pharmaceutical Society of Namibia (PSN) and over 200 registered pharmacies.
The Commission’s investigation is based on allegations that the society, a voluntary association of pharmacies has in place a rule that requires pharmacies to impose a uniform 50% mark-up on the dispensing of medicines.
“Information provided to the Commission has suggested that the society 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. Pharmacies which have previously deviated from the 50% mark-up requirement have been subjected to investigations and disciplinary proceedings by the society,” the Commission said.
According to the Commission, 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 price competition and diminishes the product choices by consumers.
“When prices are fixed by competitor pharmacies, consumers have no choice but to pay the fixed price and reduces pressure on pharmacies to reduce the costs of medicines. This can result in unjustified and increased consumer cost for medicines and ultimately reduces access to affordable health care,” the Commission added.
The Commission further said that it is still gathering all the relevant evidence and has recently served a notice of its investigation to the society and registered pharmacies. These parties have since been afforded an opportunity to make representations within 30 working days to the Commission regarding the investigation.