Pathology labs must pay back R1bn in Covid-19 PCR test profits – HFA
THE Health Funders Association (HFA), which represents 35 medical aids, wants the country’s three largest private pathology laboratories to pay back R1 billion it claims they made in profits during the Covid-19 pandemic in 2020 and 2021.
In a complaint lodged with the Competition Commission, the HFA says the labs, namely Pathcare, Ampath and Lancet, made the money from excessive pricing of Covid-19 polymerase chain reaction (PCR) tests during the pandemic.
The labs have yet to respond to the HFA complaint at the commission.
The HFA said the monies had been paid by the 5.6 million medical scheme members represented in the complaint. Their co-complainants in the matter include Discovery, Momentum, Profmed and several others.
The HFA said at the start of the pandemic, there was in-principle agreement among relevant stakeholders that the price of the tests should be on a cost-recovery basis for the duration of the pandemic.
They said a price point of R850 per Covid-19 PCR test was agreed at the start of the pandemic on the premise that this price would be adjusted downward as the input costs reduced and there was greater clarity on the volume of Covid-19 testing required.
“Unfortunately, despite substantial reductions in input costs for the tests, the prices charged by the main private labs were not reduced.”
Profmed chief executive Craig Comrie said before the pandemic, the PCR test was used to detect other infectious diseases, and was priced around R1 300.
“During the pandemic, in line with the agreed policies during the state of disaster, the tests came down to R850 and after an initial complaint lodged by the Council for Medical Schemes, the labs reached a settlement, without accepting guilt, and dropped this to R500 in December 2021.
“Between these periods the costs relating to these tests had declined during the pandemic and the test prices remained significantly high leading to excessive pricing and profiteering by the labs,” Comrie said.
Regarding why the medical schemes opted to approach the commission, Comrie said at their core medical schemes are not-for-profit and any remaining surpluses in a scheme belonged to members.
Comrie said where excessive pricing is suspected it then remains the obligation of the schemes to try and recoup these funds on behalf of members.
He said: “Depending on the investigations by the competition commissioner we believe these amounts are in excess of R1billion and should be returned to schemes to pay future medical claims and reduce the high cost of premiums.”