By Joshua Eveleigh
On 08 February 2022, the Competition Commission (“Commission”) released a press statement indicating that it had referred a matter to the Competition Tribunal (“Tribunal”) for the prosecution of Roche Holding AG (“Roche AG”), and its subsidiaries, Roche Bassel and Roche South Africa.
The nature of the Commission’s referral is premised on allegations that Roche AG and its subsidiaries had imposed excessive prices for Trastuzumab, a breast cancer treatment drug, in contravention of section 8(1)(a) of the Competition Act 89 of 1998 (“Competition Act”). As a result of the alleged conduct, the Commission has estimated that an excess of 10 000 breast cancer patients were unable to afford Trastuzumab between the period of 2011 and 2019.
In its press statement, the Commission placed particular emphasis on the fact that the alleged conduct bore the greatest impact on poor women who “…cannot access essential treatment because they cannot afford to pay for it. This is so even for the minority of women who belong to medical schemes.”
Notably, the recent Constitutional Court decision in Competition Commission v Mediclinic (“Mediclinic”) has had a seemingly profound impact on the Commission’s approach towards the present matter. In Mediclinic, the Constitutional Court emphasised the importance of the Constitution when interpreting and adjudicating competition law – specifically in regard to section 27, the right to have access to health care services. In its judgment, the Constitutional Court referred to both the Tribunal and the Competition Appeal Court (“CAC”) as state institutions that have the obligation to facilitate the Bill of Rights and to promote the right of access to health services. As a result of the Mediclinic judgment, the Commission has stated that the alleged conduct results in the prevention of access to health services, in contravention of section 27(1)(a) of the Constitution.
Due to the egregious nature of the alleged conduct, the Commission states that it is seeking that the maximum penalty be imposed against Rosche AG and its subsidiaries. In this regard, section 59(2) of the Competition Act provides that the maximum administrative penalty that may be imposed “may not exceed 10 per cent of the firm’s annual turnover in the Republic and its exports from the Republic during the firm’s preceding financial year.”
The Commission’s referral to the Tribunal and the grounds on which it relies, emphasises the overarching significance of the Mediclinic judgment in that an alleged conduct’s impact on the Bill of Rights, and public policy considerations as a result, is now preeminent consideration to be had respect of all aspects of competition law.
Primerio International partner, Michael-James Currie says the South African Competition Commission has been one of the most active agencies globally insofar as prosecuting excessive pricing cases is concerned, but and have had limited success to date. Subsequent to the amendments to the Competition Act in 2018, there has not been a case that has been fully litigated before the adjudicative bodies.
It will be interesting to see how this case progresses and the extent to which non-traditional competition factors are ultimately taken into account in interpreting the scope and application of the excessive pricing provisions contained in the Competition Act.
