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COVID-19 Block Exemption for Healthcare Sector Regulations in Place

March 20, 2020

Department of Trade and Industry

Regulations designed to exempt a category of agreements or practices in the healthcare sector from the application of sections 4 and 5 of the Competition Act in response to the declaration of COVID-19 pandemic as a national disaster have been published.

The trade and industry department published the 2020 COVID-19 Block Exemption for the Healthcare Sector Regulations in Government Gazette 43114.

The exemption seeks to strengthen government’s health programs designed to fight COVID-19 following the declaration of a state of disaster in terms of the Disaster Management Act.

The exemption is granted solely with the purpose of promoting concerted conduct to prevent an escalation of the national disaster and to alleviate, contain and minimise the effects of the national disaster and to promote access to healthcare, preventing exploitation of patients, enabling the sharing of healthcare facilities, management of capacity and reduction of prices.

Agreements or practices exempted include those between hospitals or healthcare facilities, medical suppliers, medical specialist or radiologists, pathologists or laboratories, pharmacies and healthcare funders.

The regulations also focus on agreements to support the public healthcare sector, cost reduction measures, scope of the exemption and record keeping.

Representations on the regulations are invited within 14 days of the date of publication.

The regulations came into force on the date of publication.

Meanwhile, in Gazette 43116, the department published Consumer and Customer Protection and National Disaster Management Regulations and Directions.

The regulations and directions apply to the supply of goods and services listed in annexures A and B during the national state of disaster.

They came into force on the date of publication.

Once the COVID-19 outbreak is no longer declared a disaster, the regulations and directions will fall away.

The regulations focus on excessive pricing; unconscionable, unfair, unreasonable and unjust prices; supply of goods and penalties.

The services referred to are private medical services relating to the testing, prevention and treatment of the COVID-19 and its associated diseases.

The regulations point out that the trade and industry minister may issue further directions limiting the number of items of the listed goods that consumers or customers may buy in a set time period.

Persons or firms that contravene the regulations could be sanctioned with one or more of a fine of up to R1 000 000; a fine of up to 10% of a firm’s turnover and imprisonment for a period not exceeding 12 months.

Representations are invited within 14 days of the date of publication.