Wednesday, July 6, 2022

BOMAID, PULA, BPOMAS investigated for collusion, price-fixing

Botswana’s three biggest medical aid providers are being investigated for possible collusion and price fixing.

 In its 2020/21 annual report, the Competition and Consumer Authority (CAA) revealed that it was investigating of allegations of possible abuse of dominance in the form of refusal of access to an essential facility and possible horizontal agreement through price fixing by Botswana Medical Aid Society (BOMAID), Pula Medical Aid (PULA) and Botswana Public Officers Medical Aid Scheme (BPOMAS).

According to the report, the fresh allegations were filed by Botswana Dental Association (BODEA).

“After receiving a complaint from Botswana Dental Association (BODEA), the Authority initiated an investigation against BOMAID, Pula and BPOMAS and the investigation will be carried forward into the next financial year (2-21/22,” the Authority revealed.

 Responding to Sunday Standard queries, BPOMAS Chief Executive Officer Thulaganyo Molebatsi confirmed that his entity was aware of the complaint that was lodged by the Botswana Dental Association in respect of the issue of direct and indirect billing and preferred suppliers.

“BPOMAS is aware of a preliminary inquiry made by the Competition and Consumer Authority in that respect. BPOMAS has co-operated fully with the Authority in respect of its inquiry at all relevant junctures,” he said. Molebatsi added that BPOMAS respects the role of the Competition and Consumer Authority and its powers to make inquiries and carry out investigations in accordance with the powers vested to it under the competition Act no 4 of 2018.

Other medical aid providers did not respond to Sunday Standard queries.

Meanwhile, in a related matter, the Authority said it was investigating a case of allegation of possible abuse of dominance by BOMAID. The alleged abuse of dominance behaviour relates to abuse of market power in the form of discriminatory pricing through the introduction of the tariffs system by BOMAID. According to the report, the allegation points to BOMAID’s implementation of the two tariff system that is discriminative against Ekuselini (by paying it lower tariffs compared to other medical laboratories for similar services rendered).

“The other alleged conduct relates to the discriminatory price increments that BOMAID applies to Ekusileni. The allegation is that when it applies annual tariff adjustments for its service providers, BOMAID does not apply the tariff increase to the complainant. The third allegation points to the exclusive arrangement between BOMAID and Diagnofirm

(with regards to BOMAID Managed Care Benefit Scheme). The investigation is still ongoing and will be carried forward to the 2021/22 financial year,” the report says. It has also emerged that CAA is also investigating a number of other medical aids in Botswana, following allegations of abuse of dominance.

BOMAID on the other hand insists that it is a non-profit making society and therefore the Competition Act does not apply to its operations.

“BOMAID made an application to the High Court on 21st January 2021 for an order declaring that it is exempt from the application of the Competition Act and that section 31 of the Competition Act does not apply to its conduct. The Authority opposed the application on the basis that BOMAID is a profit-making entity. The matter is still pending before the High Court,” the report says.

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