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ACCC prioritises the health sector

Newsletter 01 May 2015

In 2015 competition and consumer issues in the health sector are a new priority for the Australian Competition & Consumer Commission (ACCC). According to Mr Rod Sims, Chairman:

“We believe there are both competition and consumer issues in the medical and health sector which need increased attention. This is a new priority area.

On the competition side, for example, we have received allegations about attempts to limit access to products, patients, procedures or facilities.

The effect of anti-competitive conduct by medical professionals can be significant, particularly in regional areas. One matter now before the Federal Court involves the Little Company of Mary where the ACCC alleges that the company introduced conditions on which medical practitioners could operate in the company’s Wagga Wagga hospital, which restricted the doctors from providing services to competing facilities.

On the consumer side, we are aware of a range of consumer issues, including allegations of unconscionable conduct and misleading and deceptive conduct by medical professionals.

Our work in this priority area will increase awareness within the medical profession and the broader health industry about both rights and obligations under the law.” [1]

In line with its focus on the health sphere, one of the first steps for the ACCC in 2015 has been to commence Federal Court proceedings against Reckitt Benckiser (Australia) Pty Ltd, for its Nurofen Specific Pain Product range of Nurofen Back Pain, Nurofen Period Pain, Nurofen Migraine Pain and Nurofen Tension Headache.

The ACCC alleges that Reckitt Benckiser made representations that, amongst other things, these products had a specific efficacy in treating a particular type of pain. These representations are alleged to be false and misleading as each of the products are identical and contain the same active ingredient, ibuofen lysine 342mg.

The ACCC has sought declarations, injunctions and an order for the publication of corrective notices, penalties and costs.

These proceedings come shortly after the ACCC was unsuccessful against another pharmaceutical company, Pfizer Australia Pty Ltd. Pfizer had been the exclusive supplier of atorvastatin (a cholesterol lowering medication), branded as Liptor, through a patent until 2012. As a result of competition from generic manufacturers, Pfizer recognised its revenue from Liptor would be impacted and decided on a number of strategies to market its own generic atorvastatin to pharmacies, such as discounts on the sale of Pfizer’s branded product being “bundled” with its generic product.

In ACCC v Pfizer Australia Pty Ltd [2015] FCA 113, the ACCC failed to establish that Pfizer had contravened ss 46 (misusing of market power) and 47 (exclusive dealing to lessen competition) of the Competition and Consumer Act 2010 (Cth), rather Pfizer had been seeking to remain competitive in the market. The Federal Court found the conduct of Pfizer was not for the substantial purpose of deterring or preventing the other generic manufacturers from entering the market.

According to Mr Sims, per year the ACCC fields around 200,000 enquires, while it investigates over 500 matters and takes on about 30 to 40 court cases. An increased number of the matters taken up by the ACCC may now involve the field of health and medicine.

[1] Speech "Priorities 2015" Mr Rod Sims Chairman,

Claire Smith, Senior Associate

Newsletter 01 May 2015
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