State watchdog alleges excessive pricing in critical kidney care products

THE Competition Commission has referred a complaint against Adcock Ingram Critical Care (AICC) to the Competition Tribunal over allegations of excessive pricing of products used in renal replacement therapy for kidney failure.

The alleged conduct relates to peritoneal dialysis and continuous renal replacement therapy (CRRT) products used in the treatment of kidney deterioration and kidney failure. The period under investigation runs from July 2019 to June 2024.

AICC is a division of Adcock Ingram and is involved in the manufacture and distribution of critical care products, including intravenous fluids and renal dialysis systems.

Renal dialysis performs key kidney functions when patients experience kidney failure. Peritoneal dialysis can be performed at home, while CRRT is mainly administered in intensive care units.

The commission said the complaint relates to the products required to provide these treatments, rather than the treatment itself.

Following its investigation, the commission found that AICC is dominant in the market for renal replacement therapy products in South Africa.

It further found that prices charged for peritoneal dialysis and CRRT products during the relevant period significantly exceeded the economic costs attributable to the products. These costs include operating costs and costs of capital.

The commission said this is a prima facie indication of an abuse of dominance in terms of Section 8(1)(a) of the Competition Act 89 of 1998.

It also found that the alleged pricing contributed to increases in the cost of providing dialysis treatment, placing additional strain on government, medical schemes, healthcare facilities and patients.

The commission estimates that between 6% and 17% of South Africans are living with chronic kidney disease. It said this number is likely to rise due to high rates of diabetes, hypertension and HIV.

Competition Commissioner Doris Tshepe said the pricing of essential healthcare products has implications for healthcare costs, access to treatment and the functioning of healthcare markets.

“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,” Tshepe said.

The Commission is seeking an order declaring that AICC contravened Section 8(1)(a) of the Act and that it is liable for an administrative penalty of up to 10% of its annual turnover.

The matter will now be considered by the Competition Tribunal. The referral does not constitute a finding of guilt.