Mexico to launch probe into medical oxygen price hikes

Mexico will look for price-fixing or monopolistic practices in the market for medical oxygen during the COVID-19 pandemic

Mexico to launch probe into medical oxygen price hikes
A health worker moves an oxygen tank at a hospital –Photo: Mark R. Cristino/EFE
English 28/07/2020 15:20 Mexico City Ivette Saldaña/EL UNIVERSAL & Newsroom/AP Actualizada 15:23
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Mexico’s anti-monopoly commission said Thursday it is looking into possible price-fixing or monopolistic practices in the market for medical oxygen after pharmacies reported a spike in prices and difficulties in getting tanks and refills.

Prices for oxygen tanks in Mexico have reportedly tripled since the pandemic hit Mexico in March, and Mexico continues to post record levels of infection. On July 23, the Health Department said there were 8,438 newly confirmed cases for the previous 24 hours, bringing the country’s case total to 370,712. Confirmed deaths rose by 718 to 41,908.

“Starting in March, it began to get scarce because there was a huge amount of demand. What little we could get hold of went up by 200%” in price, said Juvenal Becerra, whose UNEFARM association represents about 5,600 pharmacies in Mexico.

But he questioned whether anything illicit was involved. “It was supply and demand. Everybody was asking for oxygen, so it was kind of logical the price would have gone up,” he said.

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Becerra said oxygen supply companies may have been unprepared for the huge surge in demand due to the coronavirus outbreak.

The Federal Economic Competition Commission said it was not pre-judging whether any violations occurred. It said the investigation was opened on July 13 and would take at least four months.

It said that if any violations are found, companies that engage in unfair practices could face fines of up to 8% of annual revenues.

Many Mexicans have tried to treat COVID-19 symptoms at home, either out of fear of going to crowded hospitals or because the government has told people with less severe symptoms to stay at home.

The spike in home treatment not only involves supplementary oxygen. Pharmacies are getting deluged with requests from customers for unproven remedies for COVID-19.

Becerra said customers were making a run on the antibiotic azithromycin and the anti-parasite drug ivermectin.

“Before, we might ship one box a day, but it has exploded and now people are asking for 50 boxes,” he said of ivermectin.

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Mexico’s Federal Commission on Economic Competition (COFECE) launched a probe on medical oxygen production, distribution, and commercialization market and its related services.

The COFECE launched the investigation to verify companies are complying with the law since medical oxygen is a drug used for respiratory conditions, mechanical ventilation services, as well as surgeries, sleep disorders, and other treatments.

It explained at the Federal Official Gazette that it will check if there were “actions, contracts, deals, or procedures performed by one or several economic agents with substantial power and that have, or could have, the objective or effect of unduly displacing other agents in the market, substantially preventing their access, or establishing exclusive advantages in favor or one of several economic agents.”

Hence, the COFECE opened the IO-001-2020 file to launch the probe, which will have to be performed in 120 business days, a term that could be expanded four times; if authorities find any breach of law, companies can be fined for up to 8% of their income.

“If by the end of the investigation there are no elements that suggest anticompetitive practices, the plenary of the COFECE would close the probe. In case there are elements that suggest a breach of law, those who are responsible will be requested for a procedure in the form of a trial so that they submit their defense,” explained the COFECE.


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