The Competition Commission (Commission) has published draft terms of reference for its market inquiry into the private healthcare sector (draft terms of reference) for public comment by the extended date of 25 June 2013.
“It was announced on 8 March 2013 that section 6 of the Competition Amendment Act, No 1 of 2009 (Competition Amendment Act) will come into force on 1 April 2013. The Commission made no secret of its intention to institute a market inquiry into the private healthcare sector. However, with the market inquiry provisions of the Competition Amendment Act coming into force, the Commission now has the scope to conduct a market inquiry with more vigour as it is empowered with much wider and more focused investigatory powers. This will enable it to extract the information it deems necessary to conduct its inquiry without requiring the Commission to have reasonable grounds to believe that a particular form or forms of anticompetitive conduct is taking place,” explains Leana Engelbrecht, Associate in the Competition Practice at Cliffe Dekker Hofmeyr business law firm.
Engelbrecht says that it is in this context that the Commission has published the draft terms of reference. As stated by the Commission in the introduction of the draft terms of reference, “these terms of reference set out the scope of market inquiry, it identifies the factors that give the Commission reason to believe that there are features of the private healthcare market that may prevent, distort or restrict competition, and sets out the expected timelines for the inquiry.”
“The Commission will focus its market inquiry identified segments within the private healthcare market, being healthcare providers, hospitals, medical aid schemes, medical aid administrators and medical aid brokers (surprisingly pharmaceutical companies are not expressly identified as a focus of the market inquiry). The key focus of the market inquiry, although not the only aspect with which the inquiry is concerned, will relate to the price setting mechanisms in the private healthcare sector. Although the Commission does not directly state the primary focus of its investigation it is clear that the Commission aims to make policy and regulatory recommendations that would, in its view, improve competition in the private healthcare market and not as much emphasis has been placed on the Commission prosecuting any competitive conduct that it might uncover in the process of the market enquiry,” she explains.
She notes that the Commission envisages the market inquiry to take place through public consultation, information requests and consultations with companies, associations and stakeholders with a panel of experts overseeing the functions of the market inquiry and the preparation of the final report.
“The Commission envisages the launch of the market inquiry to take place in the second quarter of 2013, by September 2013 and that the Commission will issue its draft recommendation in December 2014, with final recommendations to be issued by no later than 30 June 2015,” Engelbrecht adds.
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Author: Angela Graham from Cliffe Dekker Hofmeyr. Originally distributed by MyPR.co.za.
