The Australian Competition and Consumer Commission (the ACCC)
has announced that the medical and health sector will be a priority
compliance and enforcement area for 2015.
Businesses in this space should take note and review their
current practices for compliance.
ACCC compliance and enforcement priorities
Each year the ACCC announces its compliance and enforcement
priorities for that year. Some priorities never seem to change,
such as the investigation of cartels, anti-competitive agreements
and practices and the misuse of market power. However, the ACCC
also looks to new areas of focus, based upon information such as
complaint data and international trends. This year it is the turn
of the medical and health sector to be placed under the
Why the medical and health sector?
To those that follow the ACCC's enforcement activity, this
should come as no real surprise, as 2014 saw the ACCC take action
on both the competition and consumer side in this sector.
In the ACCC Chairman Rod Sims' speech announcing the 2015
priorities, he noted that the ACCC has received allegations about
attempts to limit access to products, patients, procedures and
facilities in this sector. He referenced the significant effect
anti-competitive conduct by medical professionals in regional areas
can have, using the example of the proceedings commenced by the
ACCC late last year against Little Company of Mary Health Care
Limited (Calvary) for imposing by-laws regulating the use of
Calvary medical facilities by medical practitioners. Those by-laws
have been alleged by the ACCC to restrict those practitioners from
providing services to competing facilities, with the purpose of
substantially lessening competition.
However, this was not the only action taken by the ACCC in the
medical and health sector.
Last year, the ACCC commenced proceedings against Pfizer,
alleging misuse of market power and exclusive dealing in relation
to its supply of atorvastatin to pharmacies. Whilst the Court has
recently judged in Pfizer's favour, this case demonstrates the
ACCC's focus on this sector.
The ACCC also looked at a number of medical and health related
merger applications, and successfully opposed both Sonic
Healthcare's proposed acquisition of the Delta Imaging Group
and Healthscope's proposed acquisition of Brunswick Private
From the consumer side, two breast-imaging businesses, Safe
Breast Imaging and Breast Check were fined $200,000 and $75,000
respectively for making false representations about their
breast-imaging services. Fines were also imposed on their
What particularly irked the ACCC were the health related claims
being made by these businesses without proper scientific basis, and
the view that consumers would expect a medical-related business to
promote itself in a way consistent with credible scientific
knowledge. Consumers are particularly vulnerable when they must
rely heavily on technical and scientific information that they
cannot be reasonably expected to check or certify.
Being made a priority by the ACCC does not necessarily mean that
everyone in that sector should expect a knock on the door. However,
what it does mean is that the ACCC is going to take a close
interest and dedicate resources to investigating and prosecuting
breaches of the Competition and Consumer Act in this sector.
Combined with other ACCC priorities such as a continued
clampdown on anti-competitive conduct and practices, product safety
issues and misleading advertising claims, it is reasonable to
expect an increased number of investigations and subsequent
prosecutions across the sector.
Now on notice, businesses that are active in the sector should
review their current practices for compliance. Behaviour that
should be carefully reviewed includes any agreements or
understandings with competitors, exclusivity arrangements, as well
as advertising and representations made promoting the business and
its goods or services. Businesses should ensure that their
management understand their obligations under the Act, and have
appropriate training and education in place to raise and reinforce
awareness across the business. The penalties for non-compliance can
be significant. Prevention is definitely the best medicine when it
comes to breaches of the competition law.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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