Expose private labs' Covid profits

The Covid pandemic has had a devastating impact on lives, livelihoods and the economy in general in SA for nearly two years now.

And as we appear headed to another bleak Christmas in the midst of the fourth wave after the discovery of the Omicron variant, signs of the uneven economic impact of the pandemic are starting to emerge.

Take, for example, the announcement by the Competition Commission yesterday that it has reached an agreement with two major laboratories, Du Buisson Kramer Swart Bouwer Incorporated (Ampath) and Lancet Laboratories, for the substantial reduction of the polymerase chain reaction (PCR) tests for Covid-19 after investigations into price gouging.

The tests detect genetic material from a specific organism, such as a virus.

Commissioner Tembinkosi Bonakele said the probe was initiated by a complaint from the Council for Medical Schemes alleging that the price for supplying PCR tests for Covid-19 was unfairly inflated, exorbitant and unjustifiable.

Bonakele said investigations showed the costs of tests have been declining due to the technology improving, however, the companies were not passing this benefit to the consumer. The commission further found that the profit margins of the private laboratory companies were high but would not divulge how much money was made.

“We decided to forgo a fine [of the companies involved] and chose a price reduction, which we think is better for consumers,” he said. 

Neither Ampath nor Lancet admitted that they charged excessive or exorbitant prices and stated that the agreement should not be construed as an admission of liability or wrongdoing on their part.

While the reduction in the cost of private laboratory tests from R850 to R500 will be a welcome relief to many consumers, it highlights that many people have suffered disproportionately as the pandemic worsens inequalities. This also worryingly reflects that while many have been reeling from the effects of the pandemic  others have been unfairly enriched.

Therefore, the decision by the commission not to divulge the profit made by the companies involved in the Covid-19 (PCR) test scandal is not only disappointing but goes against the principles of transparency and accountability.  

To add insult to injury, the commission hailed the agreement reached as “groundbreaking”. But without full disclosure of what justifies the reduced R500 cost per test in an economy battered by the pandemic, we find no reason to believe this cost is fair and sensible.