December 5, 2013
On September 10th, the Canadian Competition Bureau announced a public consultation for suggestions where it should intervene in regulated markets (i.e., where the Bureau does not have direct enforcement powers given the existence of legislation or regulations sanctioning conduct that would otherwise violate the Competition Act).
Earlier today, the Commissioner of Competition John Pecman announced the first of the Bureau’s new regulatory intervention efforts, into the regulation of pharmacists in Alberta, and in particular a debate over a proposed prohibition on inducements by pharmacists for drugs. For background relating to the Alberta proposal to prohibit pharmacist inducements see: Amendments Proposed to Prohibit Inducements.
Today’s announcement confirms the Bureau’s continued interest in the regulated professions. The announcement also touches on a number of more specific Bureau priorities, including associations, regulated professions, pharmaceuticals and health care more generally (as well as the intersection of competition and the “regulated conduct defence”).
With respect to the specifics of this particular intervention, the Bureau appears from its letter to the Alberta College of Pharmacists to be concerned with proposed restrictions on pharmacist-offered inducements (i.e., cash, gifts, points, loyalty points, coupons or other discounts) for drugs. The Bureau has questioned whether data exists to support concerns that inducements may negatively impact patient consumption patterns, pharmacists’ ability to offer impartial decision-making or interfere with the best provision of health care.
The Bureau is also arguing that drug markets, like other markets, should be “as competitive as possible” given their direct impact on Canadians and raised a question that arises fairly frequently in the regulated professions and discounts area – namely whether discounts or low pricing necessarily mean consumers are not receiving adequate service. In some instances this may be true, but blanket bans on discounts, rebates or other incentives may well chill innovative or more efficient business models, whether in pharmacy or pharmaceutical-related or other markets.
This is also not new ground for the Bureau. It has intervened in the past into pharmaceutical related markets (for example the Bureau’s 2007 Generic Drug Sector Study and generic drug report entitled Benefiting from Generic Drug Competition in Canada) and raised concerns with legislative restrictions on discounting in the professions, including in relation to a legislative ban on rebates for real estate services (also in Alberta).
In any event, it will be interesting to see whether this “regulator-regulator chat” so to speak will lead to less restrictions on pharmacy services in Alberta.
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