Conspiracy to keep medicine cost at a high?
Conspiracy to keep medicine cost at a high?
By Alistair Driver
and Adrienne Francis
THE Competition Commission is to investigate whether animal medicine manufacturers have worked together to keep vet medicine prices artifically high.
The Office of Fair Trading has ordered a major investigation into the £200m-a-year prescription-only veterinary medicines market. This followed a preliminary investigation prompted by complaints from farmers who said high prices are harming animal health and welfare, as well as profits.
The preliminary investigation examined evidence that UK prices are substantially higher than in other European countries. It gave rise to further concerns about a lack of price transparency in medicines and the reluctance of manufacturers to supply veterinary pharmacies.
Prescription-only medicines can be sold only by veterinary surgeons or veterinary practitioners. Increased supply through pharmacies would allow price competition between them and vets, the OFT said.
The Competition Commission will examine whether a monopoly exists among animal medicine manufacturers and, if so, whether it operates against farmers interests. It has 15 months to report to the Secretary of State.
"I am concerned by the high level of prices for prescription-only veterinary medicines and about possible restrictions on supply. It seems that competition in the market may not be working well," said John Vickers, director general of fair trading.
An NFU spokeswoman said the union has been concerned about the price of UK veterinary medicines for some time. "The OFT has borne out these concerns and the industry will be looking for a swift response," she said.
NFU Scotland raised the issue with the OFT after its members voiced serious concerns about paying higher prices than their competitors, said union vice president Peter Stewart.
He said current prices are out of line with the returns livestock producers receive for their animals. "They also compromise animal health and welfare as well as the competitive position of the Scottish livestock industry."
The National Office of Animal Health, which represents animal medicine manufacturers, denied any knowledge of monopolistic practices among it members. "But we cannot condone any breaches that have taken place," a NOAH spokeswoman said.
She said price comparisons must be done on a "like-for-like basis". Higher UK prices could be down to higher costs of running businesses here and to the distribution system, she suggested. *