PathCare, the third-largest private pathology laboratory in SA, has agreed with the Competition Commission to lower its price for Covid-19 PCR tests to no more than R500 including VAT per test.
The agreement was announced by the commission on Monday and will see the laboratory group cut its Covid-19 PCR test price from about R850 with immediate effect. The settlement between PathCare and the competition body comes just one day after a similar agreement was reached with Ampath and Lancet, the two largest private pathology laboratories in SA.
When the Competition Commission announced its settlement with Ampath and Lancet on Sunday, it revealed it was considering lodging an interim application for urgent relief against PathCare at the Competition Tribunal, saying talks with the company had become bogged down by “legalese”.
“This is a major victory for South Africans, particularly the vulnerable groups during the time of a devastating and resilient pandemic,” competition commissioner Tembinkosi Bonakele said in the announcement of the agreement with PathCare. “This substantial reduction of PCR test prices will surely alleviate the plight of consumers and enhance greater access to Covid-19 PCR testing, which is a critical part of the initiatives to avoid the escalation of the pandemic.”
The Competition Commission’s decision to investigate the price of Covid-19 PCR tests came after it received a complaint from the Council for Medical Schemes in October alleging that test prices were unfairly inflated, exorbitant, unjustifiable and in contravention of the Competition Act. A subsequent investigation found private laboratories were earning “excessive profit” on the PCR tests — which the commission regards as an essential product or service to combat the pandemic — because they failed to reduce prices in response to falling testing costs.
As part of the agreement with the commission, the three private laboratory groups will have to submit compliance reports that include financial statements every three months so the prices charged for Covid-19 PCR tests can be monitored. The price reduction will also remain in place for two years.
On Sunday, the commission’s chief economist and acting deputy commissioner, James Hodge, said the regulator would also be looking into the pricing of rapid antigen tests for Covid-19.
“In terms of the antigen test and the price of that … that is certainly next on our list,” said Hodge. “PCR is the gold standard in testing — it seems that for travel it is becoming a requirement. But we also think that where alternatives such as the antigen test can be brought in where a PCR is not a requirement, that can also bring pressure on PCR test pricing.”
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