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Pharmacy Guild Withdraws Application

Issued 17 May 2002


Pharmacy Guild Withdraws Application For Authorisation

The Pharmacy Guild of New Zealand (Inc) has withdrawn its application to the Commerce Commission for authorisation of a restrictive trade practice.

The Guild had sought authorisation of arrangements relating to the negotiation of prices for the provision of pharmacy services on government-subsidised medicines.

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 resulting from the proposed practice is greater than the detriment to competition.

In its draft determination on 26 April, the Commission reached the preliminary view, on the basis of the information available, that it could not be satisfied that the public benefits of the proposed practices were likely to outweigh the competitive detriments.

A copy of the draft determination is available on the Commission’s website, www.comcom.govt.nz/adjudication.
Background
The Guild’s application sought 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.

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