CMA investigates the supply of medical equipment in the UK

April 2017

On 11th April 2017, the Competition and Markets Authority ("CMA") announced that it is carrying out an investigation into the supply of medical equipment in the UK. This investigation provides further evidence of the CMA's clear focus on the healthcare sector as an administrative priority, after it imposed record fines on pharmaceutical companies for excessive pricing in relation to supplies to the NHS at the end of last year.

Although the investigation is still at a very early stage, the CMA has confirmed that it relates to possible infringement(s) of Chapter I of the Competition Act 1998 (the prohibition on anti-competition agreements) and concerns suspected agreements or concerted practices that restrict the prices at which retailers may advertise or sell medical equipment online. The CMA has not yet decided whether the Competition Act has been infringed and is still gathering evidence, but if it determines that sufficient evidence of an infringement exists, it will issue a statement of objections to the relevant parties. The CMA has estimated that this decision will be made in July this year. No indication has yet been provided regarding the identity or the number of companies under investigation.

The CMA evidently remains committed to its recent focus on the healthcare sector as an administrative priority. The investigation follows the CMA's decision to impose a record fine totalling almost £90 million on Pfizer and Flynn Pharma in December 2016, in relation to what was found to be prices charged to the NHS for anti-epilepsy drugs. The CMA has also commenced a separate, broader enquiry into excessive prices being charged by pharmaceutical companies to the NHS, which remains ongoing. Not to mention, of course, the significant continuing work of the European Commission and the CMA in relation to patent settlement agreements in the pharmaceutical sector.

The CMA restated its intention in its latest annual plan to pursue high impact cases, particularly those which affect vulnerable consumers. The CMA has also stated that it intends to increase its targets for opening new enforcement cases by 50% this year. As such, companies operating in the sector would therefore be well-advised to review their agreements and current practices in order to minimise any potential exposure to the CMA's ongoing probes into these markets.

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Medical equipment

Richard Craig

Richard is a senior associate in the Competition, EU and Trade group

"The CMA evidently remains committed to its recent focus on the healthcare sector as an administrative priority."