Two leading trade union federations have expressed outrage over the Competition Commission’s failure to penalise laboratories that have been found to be charging excessive prices for Covid-19 tests.
Cosatu and the SA Federation of Trade Unions (Saftu) yesterday lamented how the commission has allowed Buisson Kramer Swart Bouwer Incorporated (Ampath) and Lancet Laboratories to “get away with murder” by cutting the price of the test from R850 to R500.
They called for more consequences for the companies that were found to have kept the cost of tests high to enjoy big profits.
The commission yesterday said its investigation had found that the polymerase chain reaction (PCR) test costs had declined over time but the companies had kept the price high.
Saftu general secretary Zwelinzima Vavi said it was shocking that the companies had chosen to maximise profits at the expense of consumers during the pandemic.
“It is not sinful, it is Satanic. These guys escape murder all the time ...These guys have raked in billions of rand in the inflated test price and they have to be held accountable,” Vavi said.
He said the exploitation of consumers by the companies fuels coronavirus denialists who believe that the virus is just a scam to make certain people rich.
According the National Institute for Communicable Diseases more than 20m tests had been conducted by Saturday, and more than half (53.9%) were done in the private sector.
Of the 104,831 tests conducted on Saturday, more than 46,000 were conducted in the private sector and the rest in the public sector, which are free.
“That price that these labs had was driving people away from the testing stations. The new price should have been below R350. The Competition Commission should have said to the companies that in view of the fact that you have raked in so many billions of rand, we are asking you to test all of the people who are unemployed who want to be tested for free for six months,” said Vavi.
Cosatu spokesperson Sizwe Pamla said the commission has not done enough to address the issue of cartel behaviour and price gouging in the private sector.
“There have to be consequences for such conduct ...They must pay a financial penalty and then those at senior management level must be prosecuted because that is the only way we can stop corruption,” Pamla said.
“The biggest victim of all of this is workers who are part of medical aid schemes. This is just pure corruption, it should not be dressed up as some kind of failure on the part of the laboratory companies. It is blatant, naked corruption and it should be treated as such. Some of the workers ended up running out of funds in their medical aid because of this behaviour. We need to see the same zeal and enthusiasm when we fight private sector corruption.”
The commission refused to reveal the amount of money the two companies made by keeping the price high.
“We did find that the profit margins were quite high, as we expected them ... We will not be divulging that information at the moment but we did see an abnormal profit margin by these companies,” said commissioner Tembinkosi Bonakele.
“We decided to forgo a fine [of the companies involved] and chose a price reduction, which we think is better for consumers.”
Corruption Watch executive director David Lewis welcomed the slashing of prices for tests.
“The Competition Commission would want competition to bring the price down but if there is limited competition and you are dealing with a public health pandemic, then the commission can act either by fining or by bringing the price down.
“I suppose it could do both but it has chosen to bring the price down by nearly 40%. It is not a slap on the wrist, it is quite significant. I think it is a good move because it will encourage people to get tested,” Lewis said.
Lancet Laboratories spokesperson Sandile Sihlaba said: “Lancet Laboratories appreciates the spirit of constructive engagement with the commission, which has resulted in an outcome that best serves the people of SA as they confront the fourth Covid-19 wave.
“We are sensitive to the plight of the public and agree that reducing the Covid-19 PCR price is in the best national interest. We at Lancet Laboratories will remain dedicated to provide patients with the highest quality laboratory service. We remain committed to diagnostic excellence.” – Additional Reporting by Nomazima Nkosi
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