Supreme Court slams NaCC for unlawful delegation in PSN pharmacy price‑fixing saga

The Supreme Court has ruled that the Namibian Competition Commission acted unlawfully by delegating its power to start a price-fixing investigation in the pharmaceutical sector to its secretary.

The appeal on which the judgement was delivered yesterday was heard by chief justice Peter Shivute, deputy chief justice Petrus Damaseb and acting judge of appeal Theo Frank.

The case stemmed from allegations that the Pharmaceutical Society of Namibia, along with more than 200 pharmacies, imposed a uniform 50% mark-up on prescription medicines without lawful justification.

The commission had treated this pricing practice as price-fixing, which it said contravened sections 23(1), 23(2) and 23(3) of the Competition Act 2 of 2003.

Medical aid funds had proposed agreements with pharmacies to reduce the so-called “script levy” or co-payment for patients, but the pharmaceutical society warned its members against waiving any portion of the mandatory mark-up.

In a unanimous judgement, the court found that the Competition Act deliberately vests the power to start and conduct investigations in the commission itself, not in individual officials such as the secretary or the secretariat.

“Section 22 authorises procedural and administrative rules but does not confer power to transfer or amend primary statutory competencies.

Rule-making cannot be used to effect substantive delegation inconsistent with the legislative scheme,” reads the order.

The judgement traces the dispute to 2018, when the commission’s secretary issued a Form 4 notice to the pharmaceutical society, signalling the start of an investigation without formal authority from the commission.

The court said this amounted to an unlawful delegation of authority, with the commission effectively “abdicating its statutory responsibility” by allowing an individual official to initiate and steer the investigation.

Despite finding the process unlawful, the court noted that the factual issues relating to how pharmacies determine prices were largely not disputed between the parties.

The judges stated that the manner in which prices were set remained a matter of public interest and regulatory concern.

The Supreme Court referred the matter back to the commission to determine the next steps.

“Whether or not to continue with the investigation against the respondents (Pharmaceutical Society of Namibia), and if so, to either make such further investigations as are deemed necessary and to finalise the matter accordingly, or if it is not deemed necessary to make further investigations, to determine whether to proceed in terms of section 38 of the Competition Act,” the court instructed.

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