Adcock accused of hiking dialysis costs during surging Covid demand

This article was first published on Business Day.Key topics:Adcock Ingram referred to Tribunal for alleged dialysis overpricing (2019–24)Competition Commission alleges abuse of dominance; seeks up to 10% turnover penaltyHigh kidney disease burden; dialysis costs strain access; prior fines and recalls.By Tamar Khan.The Competition Commission has referred pharmaceutical manufacturer Adcock Ingram to the Competition Tribunal for prosecution for allegedly overcharging patients for its kidney dialysis products.The alleged transgression occurred between July 2019 and June 2024, during the height of the Covid-19 pandemic when demand for acute renal dialysis surged among patients admitted to hospital.The Competition Commission said in a statement on Wednesday that it is seeking an order declaring that the company’s hospital division, Adcock Ingram Critical Care (AICC), contravened section 8(1)(a) of the Competition Act and is liable for a penalty of up to 10% of its annual turnover.Section 8(1)(a) of the act prohibits a dominant firm from charging an excessive price to the detriment of consumers or customers.Adcock Ingram, jointly owned by Bidvest Group and India’s Natco Pharma, delisted from the JSE last year.AICC contributed R2.18bn to Adcock Ingram’s total revenue of R9.76bn for the year to June 30 2025..Read more:. Gene-edited pig kidneys: Hope for organ transplant revolution – Lisa Jarvis.“The pricing of essential healthcare products has important implications for healthcare costs, access to treatment and the efficient functioning of healthcare markets,” said Competition Commission commissioner Doris Tshepe.“The commission’s intervention in this matter reflects its commitment to ensuring that firms do not use market power to charge excessive prices for products that are critical to patient care.”Between 6% and 17% of South Africans are estimated to be living with chronic kidney disease, and this number is likely to rise because of high rates of diabetes, hypertension and HIV, the Competition Commission said.Expensive renal replacement therapies can limit access to treatment and place financial pressure on the government, renal facilities, medical schemes and patients, it said.Renal therapyThe Competition Commission said it investigated the matter after a complaint. It did not disclose the source.Its investigation found AICC is dominant in the market for renal replacement therapy products and that its prices for peritoneal dialysis and continuous renal therapy products between July 2019 and June 2024 were excessive.“They significantly exceeded the economic costs attributable to those products,” it said, adding it is a prima facie indication of an abuse of dominance in terms of section 8(1)(a) of the Competition Act.Renal dialysis provides life-saving functions when a patient’s kidneys deteriorate or fail. Peritoneal dialysis can be performed at home, while continuous renal replacement therapy takes place in hospital.Adcock Ingram said in its 2021 annual report that the coronavirus pandemic led to a rapid increase in demand for acute renal dialysis treatments for Covid-19 patients admitted to intensive care units. South Africa recorded its first Covid-19 case on March 5 2020.In 2008 the Competition Tribunal fined AICC R53.5m, or 8% of the division’s annual turnover, for collusive tendering and price fixing in the hospital market.More recently, Adcock Ingram’s over-the-counter division was forced to issue a product recall for some of its Citro-Soda products after the South African Health Products Regulatory Authority identified shortcomings at one of its production facilities. Citro-Soda, one of Adcock Ingram’s signature brands, is used to alleviate the symptoms of heartburn, urinary tract infections and indigestion.Adcock Ingram had not responded to Business Day’s request for comment at the time of publication..This article was originally published by Business Day and is republished with permission..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

Adcock accused of hiking dialysis costs during surging Covid demand

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