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Guild satisfied with Commerce Commission investigation

13 February 2014

Guild satisfied with outcome of Commerce Commission investigation

This morning the Commerce Commission publicly announced the outcome of the 2012 Community Pharmacy Services Agreement (PSA) investigation that began last year.

The Commission acknowledged that only the courts can decide whether there has been a breach of the Commerce Act, but did however warn the Guild for “aiding, abetting, counselling or procuring DHBs and/or its members to include “no discounting” provisions in the PSA which it considered to be anti-competitive.”

The investigation was launched due to a possible breach of the Commerce Act by clauses included in the PSA prohibiting the discounting of the prescription co-payment and offering inducements, specifically clauses H4.4 and M1.3.

Pharmaceuticals are subsidised by government funding. The prescription co-payment is the amount that patients pay towards their medicines. The maximum amount of the co-payment is set by the government.

The Guild is pleased that the Commerce Commission has noted the useful role it plays in negotiating agreements, advocating and consulting on behalf of its members.

The Guild takes its responsibility as a representative body seriously and will continue to be mindful of the prohibitions in the Act against price fixing and anti-competitive agreements and will be reminding its members of their obligations under the Commerce Act.

The Guild acted in good faith during PSA discussions and provided relevant information to DHBs to enable them to develop a fair service and funding model to support patients.

During the PSA consultation process the DHBs took responsibility to ensure the PSA complied with law including the Commerce Act, and the Guild relied on this legal advice.

Once the unintentional breach was identified in January last year, the DHBs immediately announced that they would not enforce the clauses. The Guild fully supported the DHBs’ decision and this change was formalised in the revised contract.

The Pharmacy Guild of New Zealand (Inc) is a national membership organisation representing community pharmacy owners. We provide leadership on all issues affecting the sector and we advocate for the business and professional interests of community pharmacy.

For additional information on the Guild and community pharmacy, please go to www.pgnz.org.nz.

ENDS

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