Fines for major labs scrapped in favour of 42% reduction on Covid-19 PCR test

12 December 2021 - 15:22
Covid-19 polymerase chain reaction (PCR) swab test tubes. The Competition Commission has found that private laboratories have been overcharging for these tests, but will not be fining those companies in return for an immediate cost reduction on the tests.
Covid-19 polymerase chain reaction (PCR) swab test tubes. The Competition Commission has found that private laboratories have been overcharging for these tests, but will not be fining those companies in return for an immediate cost reduction on the tests.
Image: Brendon Thorne

The Competition Commission will not be fining private labs found to have been excessive and abusive in their pricing of Covid-19 tests. 

The commission announced on Sunday that polymerase chain reaction (PCR) tests had been reduced from R850 to R500 including VAT effectively immediately.

Commissioner Tembinkosi Bonakele said the intervention by the commission was aimed at mitigating the economic and social affect of the Covid-19 pandemic.

“We did it to protect vulnerable consumers,” he said.

Between September and October the commission was alerted of the pricing abuses after private pathology laboratories experienced substantial cost reductions and were processing significant volumes, but continued to charge the same amount to consumers.

The commission reached an agreement with major laboratories, Du Buisson Kramer Swart Bouwer Incorporated, who own Ampath, and Drs Mauff AC & Partners t/a Lancet Laboratories who own Lancet Laboratories, on the substantial reduction of Covid-19 PCR Test prices.

Bonakele said these companies would not be fined as part of an agreement to get costs down.

“We wanted to secure an immediate price reduction, and I’m grateful that we’ve been able to achieve that.

A full investigation of an excessive price...would have at least taken us...a year
Competition Commissioner Tembinkosi Bonakele

“I think that we could have decided to pursue these companies in order to level a fine against them — that was one of the options. We decided against that because we felt that an immediate reduction was more important.

“A full investigation of an excessive price ... would have at least taken us, I would say a year, which is why we wanted to do an interim relief application. We felt we were stronger on that.

“For us to get these price levels took some compromises, and one of those was this issue was of a fine. We decided to forego a fine for an immediate and deep price reduction, which is in the order of 42%. We think that this is better for consumers. One doesn’t want to spend too much time investigating for a year or two year, developments on the ground would have changed.”

The PCR tests detect genetic material from a specific organism, such as a virus, and are now the standard proof for travel and other purposes.

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