The Competition Commission has referred a complaint against Adcock Ingram Critical Care (AICC) to the Competition Tribunal, alleging excessive pricing of key dialysis products used in the treatment of kidney failure.
The referral, registered yesterday, relates to the period between July 2019 and June 2024. The commission alleges that Adcock contravened section 8(1)(a) of the Competition Act 89 of 1998, which prohibits dominant firms from charging excessive prices.
AICC is involved in critical care manufacturing and distribution, including intravenous fluids and renal dialysis systems. Dialysis products play a vital role in replacing kidney function for patients suffering from kidney deterioration or failure.
Peritoneal dialysis can be administered at home, while continuous renal replacement therapy is typically carried out in intensive care units. The commission’s complaint focuses on the pricing of the products used in these treatments, rather than the treatments themselves.
The case arises against a backdrop of growing concern over kidney disease in South Africa. An estimated 6% to 17% of the population is living with chronic kidney disease, with prevalence expected to rise due to high rates of diabetes, hypertension and HIV. The cost of renal replacement therapies is a key barrier to access, placing financial strain on the public healthcare system, private medical schemes and patients.
Following an investigation prompted by a formal complaint, the commission found that AICC holds a dominant position in the market for renal replacement therapy products in South Africa. It further concluded that the company’s prices for peritoneal dialysis and continuous renal replacement therapy products were excessive during the period under investigation, as they significantly exceeded the economic costs of producing them.
Abuse of dominance
These costs include both operating expenses and the cost of capital. According to the commission, this pricing behaviour constitutes a prima facie case of abuse of dominance under the Act. The investigation also found that the alleged excessive pricing contributed to rising dialysis treatment costs, exacerbating the financial burden on healthcare providers, medical schemes and patients.
Competition commissioner Doris Tshepe said the case highlights the broader impact of pricing practices in the healthcare sector.
“The pricing of essential healthcare products has important implications for healthcare costs, access to treatment, and the efficient functioning of healthcare markets,” Tshepe said.
“The commission’s intervention in this matter reflects its commitment to ensuring that firms do not use market power to charge excessive prices for products that are critical to patient care.”
The commission is seeking an order from the tribunal declaring that AICC contravened the Act. It is also requesting the imposition of an administrative penalty of up to 10% of the company’s annual turnover.
- The Competition Commission has referred Adcock Ingram Critical Care (AICC) to the Competition Tribunal for allegedly charging excessive prices on key dialysis products from July 2019 to June 2024.
- AICC is accused of contravening the Competition Act by abusing its dominant market position in renal replacement therapy products, including peritoneal dialysis and continuous renal replacement therapy.
- Excessive pricing of these essential dialysis products has significantly increased treatment costs, burdening South Africa's healthcare system, medical schemes, and patients amid rising chronic kidney disease prevalence.
- The Commission’s investigation found AICC’s prices far exceeded the economic costs of production, including operating expenses and cost of capital, constituting abuse of dominance.
- The Commission seeks a tribunal order declaring the contravention and requests an administrative penalty up to 10% of AICC’s annual turnover to address the impact on healthcare access and costs.
