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

 

PARLIAMENT TODAY:

Royals: The Prince Of Wales And Duchess Of Cornwall To Visit

Prime Minister John Key welcomes today’s announcement that the Prince of Wales and The Duchess of Cornwall will visit New Zealand in November. This will be the second joint visit for Their Royal Highnesses to New Zealand. More>>

ALSO:

Tracey Martin Replaced: Ron Mark Is New New Zealand First Deputy Leader

Clayton Mitchell was the successful candidate for the Associate Whip position. Winston Peters was re-elected as Leader by the Caucus. Ron Mark was elected as the Deputy Leader with effect from 10am, Friday, 3rd July. More>>

ALSO:

Rebuild Rebrand: "Regenerate Christchurch" To Replace CERA

The regeneration of Christchurch will be the city’s focus for the next five years as local leadership progressively takes control of the rebuild, Canterbury Earthquake Recovery Minister Gerry Brownlee says. More>>

ALSO:

Nauru: Scholars Urge Minister To Act On Deteriorating Democracy

“Since the 2013 election in Nauru, there has been a series of disturbing developments on the islands that indicate a severe deterioration in the state of its parliamentary democracy and in the rule of law,” say the scholars. More>>

ALSO:

Foreign Affairs: NZ Begins Presidency Of UN Security Council

Prime Minister John Key has welcomed the start of New Zealand’s month-long Presidency of the United Nations Security Council in New York. More>>

ALSO:

Labour: Cash For Charter Schools, Mould For State Schools

“Recently released financial statements show the Whangarei charter school He Puna Marama received $3.9 million in government funding to the end of last year. Yet their audited accounts show they only spent $1.4 million on education, leaving almost $2.5 million over two years unaccounted for." More>>

ALSO:

Kiwirail Plans Shift From Electric: National Urged Not To Take Backwards Step

The National Government shouldn’t drag New Zealand backwards by replacing its climate friendly electric trains with carbon-polluting diesel trains, the Green Party said today. More>>

ALSO:

Capital Connection:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news