Hands off the Market Inquiry into Private Health Care!

27 May 2014: Last week the Treatment Action Campaign’s (TAC) partner SECTION27 closely monitored the court hearing of the case between Netcare, KPMG and the Competition Commission (CC) in the South Gauteng High Court.  SECTION27 produced a series of reports on the hearing available below.

Ostensibly Netcare’s case concerns its objection to the Competition Commission’s use of KPMG’s professional services for purposes of the Market Inquiry into the Private Health Sector on the grounds that this is a conflict of interest.  This is because KPMG had previously done work for Netcare, which Netcare alleges exposed KPMG to confidential documents. Netcare argues that KPMG may now unlawfully expose these documents directly or inadvertently to the Commission.

But in reality, we view this case as marking the attempts that seem likely to be made by extremely profitable private corporations, like Netcare, who have an interest in preventing an investigation into how this part of the health sector ‘works’. This marks the start of the battle over the market inquiry.

As a result the CC says that progress in the market inquiry has been delayed by Netcare’s legal challenge.

In its arguments before the Court the CC raised a number of important issues including:

– The important constitutional obligations that rest on the Commission in conducting the inquiry;

– The need for the inquiry process to be conducted with integrity, independence, openness and transparency, as well as to be accessible to the public;

– Recognition that the public interest in access to health care services must be at the heart of the inquiry.  

By contrast Netcare’s sole concern seems to be preventing the leaking of its information to the Commission by KPMG, something that still concerns it despite a court order entered into with KPMG to ensure this does not happen and regardless of the fact that the CC will have the right to subpoena any information it considers important. As was pointed out by lawyers for both the CC and KMPG this suggests Netcare has something it wants to hide.

Netcare seems willing to spend a vast amount of money on defending its interests. Last week it was represented by six counsel, including a Queen’s Counsel imported at great cost from England.

If this is an attempt to sabotage the health market inquiry it will not be the first time that powerful private interests have used their immense resources to hamper efforts by the government to progressively realise the right to access health care services.

We well remember how in 1998, 39 multinational pharmaceutical companies, under the umbrella of the Pharmaceutical Manufacturers’ Association (PMA), took President Nelson Mandela to court to try to stop legislative reform that aimed to improve South Africa’s ability to access affordable medicines.  After the TAC was admitted to the case as a friend of the Court, we brought a huge wave of opposition to bear on the companies’ conduct. As a result in April 2001 the PMA unconditionally withdrew the case against the government. 

At the beginning of this year a group of pharmaceutical companies under IPASA were caught red handed in an expensive plot to delay the progress of an important policy that proposed the inclusion of public health principles in South Africa’s intellectual property policy, which will have an impact on the price of medicines.

In the past similar resistance was mounted to the passing of the Medical Schemes Act; attempts to regulate price in the private health sector; as well as to regulation of tobacco. It is also being threatened against attempts to regulate alcohol advertising.

Netcare is entitled to bring its legal challenge. However, after studying its arguments at the hearing we are concerned that is primarily a mask to delay and intimidate the inquiry. If this is the case Netcare should be aware that civil society is closely monitoring the case and its actions may only bring an even brighter spotlight to bear on its practices, and possibly provoke a public mobilisation similar to that felt by the PMA and IPASA.

The TAC is frequently critical of government. But we believe that when public bodies take steps to meet constitutional obligations such as the right of access to health care services, that those concerned about human rights and the public interest should support their efforts.

The TAC will continue to monitor and participate in the market inquiry and with SECTION27 is part of a forum of civil society organisations that aim to bring the critical voice of users of the health system to the inquiry.

For comment: Lotti Rutter, Treatment Action Campaign 081 818 8493 / 021 422 1700


SECTION27 statements:

Day 1 – http://www.section27.org.za/press-statement-summary-of-day-1-of-netcare-v-kpmg/

Day 2 – http://www.section27.org.za/press-statement-day-2-netcare-v-kpmg/

Day 3 – http://www.section27.org.za/press-statement-summary-of-day-3-netcare-v-kpmg/

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