South Africans who felt the pinch of costly COVID-19 tests during the pandemic may soon have their day in court, as the Competition Tribunal has paved the way for a major case against three leading pathology labs - Ampath, Pathcare, and Lancet Laboratories - with potentially R1 billion in damages in view.

"The Tribunal’s ruling means the complainants’ case against the pathologists can now proceed to the merits once the pathologists have submitted their responses, as directed by the Tribunal," the competition body stated on Thursday.

The Tribunal rejected nearly all objections from the labs, accused of overcharging for PCR tests - a laboratory technique used by healthcare providers to detect infectious diseases - between March 2020 and December 2021.

This decision sustains a push by medical schemes and the Health Funders Association (HFA) to prove these labs breached competition rules.

For ordinary South Africans, the case strikes a chord: during the pandemic, PCR tests were essential - for travel, work, or peace of mind - but came at a steep price.

Background

HFA, a representative organisation for medical schemes, has pursued this case in the broader interest of medical scheme members, on behalf of 36 schemes and 5.6 million beneficiaries. They contend that, based on the Competition Commission’s 2021 investigations, the labs charged excessive prices for COVID-19 PCR tests, well above cost recovery, when South Africans needed them most in 2020 and 2021.

On Thursday it welcomed the outcome of the Exceptions hearing by the Competition Tribunal, which ruled in its favour on eight of the nine grounds of exception raised by the pathology laboratories in the case concerning the pricing of COVID-19 PCR tests during the COVID pandemic in 2020–2021.

Commenting on the ruling, HFA CEO Thoneshan Naidoo said, "The cost of healthcare directly impacts medical scheme contributions and overall affordability. The higher prices for PCR tests during the pandemic contributed to healthcare inflation, driving up contributions and placing additional financial strain on members. We believe that this decision by the Competition Tribunal bodes well for the hearing on the merits of the case.”

The complainants, aiming to claim damages in the High Court, referred the case to the Tribunal themselves after the Competition Commission opted not to pursue it, having reached consent agreements with the labs to reduce prices without admitting fault.

The labs retaliated, filing exceptions on November 27, 2024, arguing the case was flimsy and lacked detail. Ampath claimed it should be dismissed or sharpened, Pathcare labelled it “vague and embarrassing” and demanded more facts within 10 days or dismissal, and Lancet sought specific claims dropped unless clarified within 15 days. The complainants, however, sought a declaratory order from the Tribunal confirming the pathologists engaged in a prohibited practice under the Competition Act to support their High Court damages claim.

Tribunal’s Ruling

On Thursday, the Tribunal dismissed exceptions tied to the complainants’ claims about the pathologists’ market power, excessive pricing, dominance, and harm to consumers. It upheld one exception, directing the complainants to back up their assertion that smaller labs charged significantly lower prices for PCR tests - a point raised in their pleadings to underscore the pathologists’ alleged overcharging.

"The Tribunal concluded that, at this stage of the pleadings, the material facts needed to show the alleged excessive pricing have been adequately outlined, though whether this stands up will depend on evidence presented later," it said, noting that reasons for its decision will be published once confidentiality claims are resolved.

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