A group representing some of Ontario's independent and not-for-profit medical laboratories says the province needs to step up and make sure a merged "mega-lab" will be in the best interests of Ontarians, now that the federal Competition Bureau has issued a "no action letter" saying it will not stop the proposed merger.
Former MPP, MP and now spokesperson for the Ontario Coalition for Lab Reform Gerard Kennedy says the government needs to step in now the federal regulator won't intervene, in part because provincial rules are responsible for the Competition Bureau's decision. The OCLR has been arguing against the merger of purchase of CML Healthcare Inc. by Lifelabs on the grounds it will reduce competition and health care service levels. (OCLR is also made up of smaller labs that will have to compete against the "mega-lab".)
"It's hard to argue that the biggest problems in competition isn't already from the regulation that (provincial) government has put in," Kennedy said. Between prices set by OHIP and government regulation of market shares, Kennedy says the Bureau presumably did not see the consumer benefit stopping the merger would produce. "However, we did make those arguments because there's an important difference between an oligopoly and a monopoly."
A spokesperson for the Competition Bureau confirmed to QP Briefing the regulator had issued a no action letter, meaning that it will not challenge the merger "at this time" but said the letter itself had to remain confidential.
Greg Scott added: "It is worth noting, however, that the Act provides a one-year period following completion of a proposed transaction during which the Commissioner of Competition may bring the matter before the Tribunal."
<a href="http://www.qpbriefing.com/2013/07/16/merger-will-hijack-regulation-of-medical-labs-coalition/">Last month</a>, Deb Matthews' office told QP Briefing "the ministry of health will work closely with the companies involved in order to ensure quality and access are protected and enhanced for patients," and that they did not intend to intervene to stop the merger. Officials in the minister's office said on Monday the government's position hadn't changed.
Having been cleared by the Competition Bureau, the next milestone is the approval of the purchase by CML shareholders on September 3. Kennedy says the government shouldn't wait until then to make its policies clear.
"They don't have to act before the shareholder vote, but they could also say something like 'we don't think any one company can have more than 35 to 40 per cent." That would also give shareholders a better idea of what they're buying.
Kennedy says the government has three large potential levers to ensure consumers and the province aren't hurt by the merger: the licensing of the new merged lab (since all such labs are licensed by the province), the effective regulation of market share that the province oversees, and the prices the government charges through OHIP.
Progressive Conservative deputy health critic Bill Walker says that he doesn't think the government should jump into regulating the industry without good reason, but didn't think some licensing requirements would be unreasonable.
"Well I don't think we should stop anything without doing the homework. A review may be in order," Walker said. "My understanding at this point is that they've declared there won't be any guarantees or closures."
Walker says he'd support a licensing condition that required any merged lab to keep those commitments: "I think that's a key tenet of what any government should be doing.
"If a company is trying to just merge then slash and cut, that's not what we want."
Walker said he'd be particularly concerned about rural service levels and would like to see rules and guidelines to ensure "equitable" service.

Competition Bureau non-decision puts lab-merger back in province’s hands

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