Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Commission Issues Warning Over ‘No Discounting’ Clause

Commission Issues Warning Over ‘No Discounting’ Clause


Issued 13 February 2014


The Commerce Commission has warned all New Zealand District Health Boards (DHBs) and pharmacies nationwide that “no discounting” clauses in the 2012 Community Pharmacy Services Agreement (CPSA) are likely to have breached s 27 of the Commerce Act 1986.


The Pharmacy Guild has also been warned for its role in advocating for the inclusion of the clauses in the CPSA.


The CPSA is a standard form agreement between each DHB and each community pharmacy for the provision of pharmaceutical services to the public. The Commission believes that two of the clauses in the 2012 agreement had the effect of prohibiting pharmacies from waiving, or discounting, the $5 pharmaceutical co-payment paid by patients for the dispensing of each prescription item.


Commerce Commission Chairman Dr Mark Berry said, “On receiving notice of our investigation, the DHBs took action and removed the restrictive clause from the agreements at the start of 2013. This meant that a warning letter was an appropriate response.”


Dr Berry said that removing this clause was also an excellent outcome for consumers who stand to benefit from pharmacies being able to compete on prescription charges.


“Once the no discounting clause was removed, two pharmacies in lower socio-economic areas in Christchurch and Auckland advertised discounting again and noticed an increase in the number of prescriptions being dispensed.”


“The outcome of this investigation sends a number of important messages to the parties involved. Government agencies must consider the effects on competition when entering into procurement contracts,” Dr Berry said.


“Pharmacies and other health providers must also remember that they are in competition with each other despite the collegial nature of their professions. And professional associations, such as the Guild, are also subject to the Act and need to give attention to complying with the competition laws,” said Dr Berry.


A copy of the warning letter to DHBs, pharmacies and the Pharmacy Guild can be viewed athttp://www.comcom.govt.nz/business-competition/competition-enforcement-outcomes/commerce-act-enforcement-actions-register/


Background
Community pharmacy services are funded by the Government via a standard services agreement, the CPSA. The CPSA is entered into by each DHB and service provider (ie, pharmacy) and typically re-negotiated every three years. The CPSA covers the provision and funding of core pharmacy services, as well as certain other specified pharmacy services. The 2012 CPSA, which came into effect on 1 July 2012, overhauls the way pharmacists are paid by DHBs and is being phased in over a two year transition period.


The 2012 CPSA caps nationwide payments to pharmacists at $370.5m per year. Under the 2012 CPSA, pharmacists will be paid by the government via DHBs for services provided rather than for the number of items dispensed.


© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Two Years With New Methods: Crime Stats Show Increase Led By Burglary

The two years of data show an increase in the total victimisation rate of 3.1 per cent, with 12,060 more victimisations in the 2015/16 year when compared to 2014/15 year. From this increase, 72 per cent is attributable to burglaries. More>>

ALSO:

Auckland Relocation Grants: 12 Grants Paid So Far

Since the policy took effect one month ago, 12 applicants have received the non-recoverable grant, supporting 32 people. $54,508 has been paid out, covering things like moving costs, bond, rent in advance and letting fees. More>>

ALSO:

Vaccine Funding Change: HPV Vaccines For All Children

PHARMAC has today announced changes to funded vaccines, which will benefit an extra 100,000 people... The human papillomavirus (HPV) vaccine will be available for all children and adults up to the age of 26 years, and boys will now be included in the HPV school vaccination programme. More>>

ALSO:

Gordon Campbell: On Why The Opinion Polls For Key And Trump Defy Gravity

What is going on? Donald Trump got confirmed as the Republican presidential candidate at a bizarrely chaotic political convention… and promptly received an upwards bump in the polls to where he’s now rating ahead of Hillary Clinton, for only the second time this year. More>>

Sugar: Auckland Leisure Centres Axe Unhealthy Drinks

Auckland Council is to stop selling drinks that are sweetened by sugar from vending machines at its leisure centres in a bid to try to reduce obesity and type 2 diabetes... More>>

ALSO:

Gordon Campbell: On Todd McClay’s Faulty Memory

Time and again, whenever an issue arises the initial response by government is to deny or diminish the problem – nothing to worry about here, everything’s OK, move on. Then, hang on. In line with the usual pattern, as embarrassing details emerged into daylight, the story changed. More>>

ALSO:

Labour's 'Future Of Work': Major Reform Of Careers And Apprenticeships

The next Labour Government will transform careers advice in high schools to ensure every student has a personalised career plan, Leader of the Opposition Andrew Little says. More>>

ALSO:

State Investments Management: Treasury Likes IRD, Not Education Or Corrections

The Inland Revenue Department has scored an 'A' in the first tranche of the Treasury's investor confidence rating for state agencies that manage significant Crown investments and assets, gaining greater autonomy as a result, while the Corrections and Education ministries gained a 'C' rating. More>>

ALSO:

Govt Goal: NZ To Be "Predator Free" By 2050

Prime Minister John Key has today announced the Government has adopted the goal of New Zealand becoming Predator Free by 2050... “That’s why we have adopted this goal. Our ambition is that by 2050 every single part of New Zealand will be completely free of rats, stoats and possums." More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news