Pharmacy Guild authorisation application

Pharmacy Guild authorisation application

Media Release

Issued 21 December 2001/136

Commerce Commission receives authorisation application from Pharmacy Guild

The Pharmacy Guild, on behalf of its 700+ members, has applied to the Commerce Commission for authorisation for it to enter into arrangements with the Ministry of Health, on behalf of the District Health Boards, or the DHBs themselves.

The arrangements involve the amount of money DHBs will provide to the Guild's community pharmacy members, and the prices those pharmacies can charge patients, in return for the provision of subsidised pharmacy services.

The Commerce Act prohibits competitors agreeing to work together in a way that reduces competition between them. This includes arrangements that have the purpose or effect of fixing prices.

However, the Act does allow for authorisation of potentially anti-competitive business practices if the public benefit is greater than the detriment to competition.

The Act sets no deadline for the Commission to consider authorisation of a potential anticompetitive practice. Public notices asking for submissions will be published shortly.

Public copies of the application are available from the Commerce Commission's Wellington Office, Level 7, Landcorp House, 101 Lambton Quay, or contact Catherine Best (04) 498-0953.

Background information

The Guild is the organisation that represents the interests of most retail pharmacies in New Zealand. It has been engaged, on behalf of its members, in negotiations with the Ministry of Health of a standard pharmacy services contract to replace existing arrangements. The Ministry of Health has been acting on behalf of the 21 DHBs in this matter. The negotiations involve the amount of money DHBs will pay community pharmacy members on behalf of patients by means of the Patient Pharmacy Benefit Subsidy, in return for providing services, or arranging the provision of services.

ENDS

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