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Draft Determination On Pharmacy Guild Application

Issued 26 April 2002


Commerce Commission Releases Draft Determination On Pharmacy Guild Authorisation Application

The Commerce Commission has today released its draft determination in relation to an authorisation application by the Pharmacy Guild of New Zealand (Inc) (the Guild).

The Commerce Act prohibits competitors agreeing to work together in a way that reduces competition between them. This includes prohibiting competitors from agreeing on the price that they will charge to provide goods or services. 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 application seeks authorisation of two practices that would allow the Guild and its members to agree on the pricing it would seek from the Ministry of Health or District Health Boards (DHBs) for pharmacy services on Government subsidised medicines. The Guild then would seek agreement with the Ministry or DHBs over those prices. The prices agreed with the Ministry or DHBs then would be reflected in service agreements between individual retail pharmacies and DHBs as to the payment level the retail pharmacies would receive to provide pharmacy services.

On the basis of the information available to date, the Commission has reached the preliminary view that it cannot be satisfied that the public benefits of the proposed practices are likely to outweigh the competitive detriments.

The Commission now invites industry participants and other interested parties to make written submissions on the draft determination. The closing date for submissions is Friday 17 May 2002.

The Commission will hold a two-day public conference on the application on 4-5 June 2002 in Wellington. The conference will allow interested parties to make oral presentations to the Commission and for the Commission to ask questions.

A final determination on the application is expected to be made by the end of June.

The draft determination is available on the Commission’s website, www.comcom.govt.nz/adjudication/registers.

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