Huge price reduction for Covid tests in S Africa after Competition Commission’s intervention

Johannesburg, Dec 24: After intervention of the Competition Commission, three largest private pathology companies in South Africa have agreed to reduce the price of COVID-19 Rapid Antigen Tests to no more than 150 rands.
The new price is less than half of the previous charge of between 320 and 350 rand per test.
“This is yet another major victory for South Africans, particularly the vulnerable groups during the time of a devastating and resilient pandemic,” Competition Commissioner Tembinkosi Bonakele said.
“The reduction of COVID-19 Rapid Antigen Tests’ prices will help alleviate the plight of consumers and widen accessibility and affordability of rapid antigen testing which is a critical part of the initiatives to avoid escalation of the pandemic,” Bonakele added.
Although the companies had reduced their prices to between 230 and 250 rands in the past month, the Commission still believed that this was excessive, given that the UNICEF price for a test kit is just 50 rands.
The price agreement brings the costs of the tests at the private pathology companies Pathcare, Lancet, and Ampath in line with the National Health Laboratory Services’ charge of 150 rands.
The new pricing will go into effect immediately and will remain in place for at least two years.
“The three laboratories have also undertaken to submit to the Commission a compliance report that will include financial statements every three months to monitor prices charged for COVID-19 Rapid Antigen Tests and any material changes in costs,” the Commissioner said.
The latest agreement was the second this month after the pathology companies earlier agreed to reduce the price of PCR tests to 500 rands each from their previous 850 rands.
“It was during the PCR test investigation that the Commission became aware that similar concerns may exist in relation to COVID-19 Rapid Antigen Tests,” Bonakele said.
“The Commission will continue with its investigation on supply and delivery of COVID-19 Rapid Antigen Tests,” the Commissioner added.
“We will not hesitate to apply for maximum administrative penalties against companies found guilty of exploiting consumers and customers,” Bonakele concluded.
The Commission launched an investigation into the pricing after it received a complaint from the Department of Health.
In October this year, the Commission had also received a formal complaint from the Council for Medical Schemes (CMS) alleging that the price for supplying COVID-19 PCR tests by the pathology groups was unfairly inflated, exorbitant and unjustifiable.
The CMS, whose member medical aid schemes have come under huge pressure in the past two years because of the pandemic, called for the Commission to investigate possible contravention of the Competition Act.
The Commission’s investigation into that complaint found that the pathology groups have been earning significant profits since March 2020, especially in the current financial year to date.
Health industry analysts said the settlement was a way of avoiding any possible hefty penalties that could be imposed by the Commission, particularly if it found that there was any collusion between the companies or if there had been any price-fixing regarding the tests.
Consumers were also not convinced that the lower costs were just a goodwill gesture on the part of the companies to aid them.
“My immediate family of seven people had to fork out almost 10,000 rands recently because of travel requirements. If they were really interested in reducing costs for the consumer, they could have done so months ago by reducing their profits without the Competition Commission having to get involved, and we would have saved a large amount as well,” Johannesburg resident Amrit Bhana said. (PTI)

Follow our WhatsApp channel