NMa: Pharmacies in Assen and Tilburg Must Lift Restrictions on Competition

The Netherlands Competition Authority (NMa) has imposed an order subject to a penalty on pharmacies in Assen and Tilburg to halt their practices that restrict competition.

In and around Assen, eight pharmacies restrict competition amongst themselves by refusing each other and possible new pharmacies access during the day to their electronic data network containing patient data. NMa has ordered these pharmacies on the network to configure the network in such a way that all the connected pharmacies can consult real-time patient information 24 hours a day on the network. If they do not comply with this order, they will forfeit a penalty of EUR 1000 per day, subject to a maximum of EUR 100,000 per participant.

In Tilburg, a joint venture involving 27 pharmacies, Coöperatieve apotheken Midden-Brabant U.A., acquired a polyclinic pharmacy, while there was also an external candidate. In doing so, the parties prevented further competition. Existing market relationships were consolidated by doing so. NMa has ordered the pharmacies and their joint venture to cease operating the polyclinic pharmacy and to transfer the operation of the pharmacy to market players who do not have market power. If they do not do so by the stipulated deadline, they will forfeit a penalty of EUR 1000 a day subject to a maximum of EUR 100,000 per participant.

NMa takes action in the healthcare sector in areas in which government policy makes the operation of market forces possible. NMa focuses, in particular, on ensuring that entry by new players is not obstructed and that competition between existing players is not restricted. The latter includes the consolidation of existing relationships where competition is possible.

The market for pharmaceutical services by pharmacies is characterised by limited movements in the market, limited inclination by patients to switch pharmacies and small differences in the price of medicines. Since the scope for competition amongst pharmacists was increased considerably in 2000 through an amendment of the Medicines Act [Wet op de geneesmiddelenvoorziening], NMa ensures that this scope is not restricted by existing players. NMa only takes action in areas in which the government allows market forces and where market players attempt to frustrate incipient competition. The healthcare sector has priority in NMa's Agenda 2004.

The pharmacies in Assen have a shared electronic network containing patient data. A network such as this can promote competition since all the connected pharmacies have insight into these data and are consequently able to ensure that patients receive the right medicines (medication monitoring). This means that patients receive optimal medication monitoring. This allows patients to make use of a different pharmacy more easily. Since the pharmacies in Assen agreed not to use the network during normal opening hours, they restricted competition amongst themselves by limiting patients' freedom of choice. In addition, by doing so they obstructed the entry to the market of Wilhelmina Apotheek, at the time a newcomer. After all, the quality of service provision by the new pharmacy depends partly on the possibility of carrying out optimal medication monitoring. In addition, this was a newcomer which did not have an existing customer base amongst patients. As a result, it was even more dependent on access to the network with patients' data. To bring an end to this situation, NMa has ordered the pharmacies in Assen to grant 24-hour access to the network seven days a week by the stipulated deadline to all (potential) participants and to provide them with real-time patient information.

In Tilburg, all the existing pharmacies took on the operation of the polyclinic pharmacy in the hospital, St. Elisabeth Ziekenhuis, through a cooperative, after the hospital had taken the initiative to set up a polyclinic pharmacy. Through the joint operation of the polyclinic pharmacy by the existing pharmacies, the possibility of a different candidate was excluded. Through the joint operation of this polyclinic pharmacy, the existing pharmacies have no incentive to compete with this pharmacy and inversely will not experience any competitive pressure from the polyclinic pharmacy. This freezes the market relationships between the parties and patients are not able to benefit from the advantages of greater competition. To bring an end to this situation, NMa has ordered the Tilburg cooperative of pharmacies and its members to cease its operation of the polyclinic pharmacy and to transfer it to one or more market players who do not exercise market power.