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

 

New Research: Most Homeless People Working Or Studying

“The cost of housing has been rising without corresponding increases in income, whilst the number of state houses per capita has been in decline. Many low-income people are missing out on housing, whether we recognise them as ‘homeless’ or not. More>>

ALSO:

Post-Traynor: New Offender Info Sharing Plan

“This Bill delivers on that step-change by moving away from name-based records held by individual agencies to a shared, anchor identity based on unalterable information, such as fingerprints and facial recognition. It also gives agencies access to the drivers’ licence photo database and birth, death and marriages information." More>>

  • NZ Law Foundation - New $2M fund for research on information challenges
  • Littoral: New Ship To Deliver Enhanced Naval Capability

    Defence Minister Gerry Brownlee says the Government has approved a Ministry of Defence and New Zealand Defence Force recommendation to request tenders for a new naval ship to support littoral operations. More>>

    July:

    After King's Labour Snub: Māori Party And Kiingitanga To Work Together

    Māori Party Co-leaders Te Ururoa Flavell and Marama Fox met with Kiingitanga representatives in Wellington yesterday to discuss working together on key issues for the betterment of Māori. More>>

    ALSO:

    Waitangi Claim On Rehabilitation: The 'Justus' System For Māori Not Good Enough

    Closing statements at the Waitangi Tribunal case against Corrections called for immediate steps and a comprehensive review to address the high rate of Māori reoffending. More>>

    ALSO:

    Advice: PM Sets Rules For Ministers' Treatment Of Public Servants

    Prime Minister John Key has laid down the law about the way ministers and public servants should interact, saying ministers may not always like the advice they receive, but they must listen to it carefully, respectfully and professionally. More>>

    Gordon Campbell: On The Funding Changes In Special Needs Education, And Uber

    The plan to strip out the educational support for older “special needs” children in order to meet the existing shortfall in funding for special needs in early childhood education is so miserly and relentlessly stupid as to defy belief… More>>

    SPECIAL EDUCATION (& More):

    Online Learning Plans:

    Post Cab Presser: Inquiries And Consciences

    This afternoon the Prime Minister John Key announced that his cabinet had drafted terms of reference for the Havelock North water contamination inquiry... In response to questions on the Shop Trading Hours Amendment Bill, the Prime Minister said he didn't think allowing National MPs a conscience vote was warranted. More>>

    ALSO:

    Get More From Scoop

     

    LATEST HEADLINES

     
     
     
     
     
     
     
     
     
    Politics
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news