Covid-19 screening: The Competition Council points to unjustified laboratory margins

The Competition Council said that laboratories authorized to perform Covid-19 screening tests achieved high profit margins that were not justified from a competitive point of view.

In an opinion that it made public, the Council indicated that due to the absence of conditions for effective competition between players in the market for Covid-19 screening tests, the reduced number of laboratories authorized to perform these tests and in the presence of regulatory barriers that do not guarantee fluid and fair access to the various private biomedical analysis laboratories, (…) he has no objections to temporary measures not exceeding six months being taken by the administration, in order to regulate the prices of Covid19 screening tests.

The Council considers, in fact, that despite the decision to open up the market to all laboratories in the private sector, and which could have been taken previously, (this decision) was only taken on 23 August 2021, the expected effects of this opening on the structure of supply on the market and on prices can only be observed in the medium term.

The Council therefore considers that, despite this conditional opening, the government’s request to temporarily regulate the prices of Covid-19 screening tests remains justified in the current uncompetitive context of the market.

However, the Council reserves the right, once these temporary measures have been taken by the government, to closely monitor the state of competition in this market, to study it in depth, and to take all the necessary measures to even improve its competitive functioning, and this in accordance with the consultative and contentious prerogatives which are devolved to it by the Constitution and by the laws governing competition in Morocco.

Regarding the government’s decision to take temporary measures to regulate the prices of Covid-19 tests, the Council chaired by Ahmed Rahou believes that it must take a number of elements into consideration.

First, setting the price level for Covid-19 screening tests must guarantee a reasonable level of incentive margin to encourage the entry of new players into the market, and thus make it possible to compete with private laboratories already operating in this area. last, in order to create a new dynamic and effective competitive pressure.

It must ensure that the fixed price level does not give a competitive advantage to players already active on the market, since their previous presence on the market has enabled them to reduce the cost through the depreciation already carried out of the equipment. acquired;

The Council also considers that the fixing of the sale price to the public must not only cap the profit margin of private biomedical analysis laboratories, but also cover by its scope the margins of all stakeholders in the chain, including producers and importers of reagents and consumables necessary for performing covid-19 tests.

Regarding the broadening of the supply base on the market allowing more equitable access to Covid-19 tests: the Council considers that the fight against this pandemic requires the adoption of a proactive and preventive approach favoring the opening up of the market to new entrants by easing the conditions of access, which will make it easier for citizens to access tests by making them available to them at an appropriate price that matches their purchasing power.



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