Competition Bureau's Health-Related Activities in Priority Areas

Outreach

The Bureau is involved in a number of outreach activities to explain the relevance of enforcement of the Competition Act to health professionals, consumers, and retailers of health related products.

For instance, the Bureau has an active outreach program to educate the public and help stakeholders detect, report and prevent their exposure to costly bid-rigging schemes that target public and private procurement. Bid-rigging occurs when, in response to a request for bids or tenders, one or more persons agree not to submit a bid or agree on the bids to submit, and the agreement is not made known to the person requesting the bids or tenders. The Bureau's regional offices have spearheaded bid-rigging outreach to purchasing and procurement authorities across Canada. Over the past two years, these outreach and awareness efforts have given particular focus to the health care sector with upwards of 20 presentations delivered to health care stakeholders across Canada.

The Bureau has also made presentations to several groups, including the Ontario Drug Benefits Program and the Public Works pharmaceuticals purchasing group, on recognizing potential anti-competitive clauses in procurement contracts, such as exclusive dealing and tied selling clauses. The Bureau hopes that, by raising awareness of anti-competitive clauses among purchasers of pharmaceuticals, Canadians will benefit from lower prices for health care.

The Bureau's outreach activities also involve alerting consumers of health related products to the possibility of false and misleading advertising. For instance, the Bureau has issued a consumer pamphlet educating Canadians on diabetes fraud, created in cooperation with Health Canada and the Canadian Diabetes Association. The Bureau has also developed two tri-lingual “teaser” sites in cooperation with partner agencies in the U.S. and Mexico, warning consumers of the types of fraudulent claims that are often employed by “scammers” on the Internet. Teaser sites developed to date have related to diabetes scams, and fraudulent claims regarding weight-loss products.

Enforcement

It is not possible for the Bureau to act on all complaints of false or misleading advertising, and accordingly, the Bureau focuses its efforts on those issues in the marketplace that pose the greatest risk to consumers and competitors. One of the key issues that the Bureau has chosen to focus on is deceptive health claims on the Internet. New world-class technological tools have been developed for this purpose, used in conjunction with the Bureau's Project FairWeb - a dedicated surveillance initiative aimed at targeting online misleading advertising. Unlike traditional search engines, this new tool allows the Bureau to develop highly sophisticated searches so that, at the push of a button, a search of the Internet will capture all websites containing questionable claims about the relevant subject matter. The Bureau also pursues this work on the world stage, working closely with Health Canada and other domestic partners, and international partners through organizations such as the Mexico-US-Canada Health Fraud Working Group (“MUCH”), to put forth coordinated and complementary efforts in combating health fraud. Last year, MUCH focused its efforts on weight-loss fraud , and this year, the focus is on diabetes fraud .

The Bureau has taken fair business enforcement actions in a wide number of health related issues to stop false and misleading claims that cost the health system millions of dollars.

Tanning

In February 2006, the Bureau filed a consent agreement with the Competition Tribunal, requiring Fabutan Corporation to stop making representations to the public linking indoor tanning with certain health benefits unless those benefits have been scientifically proven. In particular, Fabutan made representations to the public linking indoor tanning with the unproven health benefits of vitamin D - including reduced risks of certain cancers, heart and cardiovascular conditions, and osteoporosis – and promoting tanning as useful in treating seasonal affective disorder or stimulating the metabolism.

Cancer

In August 2005, following an investigation, the Bureau laid criminal charges against the principals of CSCT Inc. for making false or misleading claims regarding the efficacy of their alleged cancer treatment. This case is still before the courts.

Weight-loss

The Bureau used its Project FairWeb in a successful two-year initiative to address weight-loss product scams by targeting companies promoting bogus and misleading weight-loss schemes. In September 2006, the Competition Tribunal ruled that operators of Les Centres de Santé Minceur , a chain of weight-loss clinics, engaged in deceptive marketing practices, and imposed a 10-year prohibition order and administrative monetary penalties.

Even the Bureau's merger work has a health dimension. In recent years, the Bureau has dealt with a number of merger cases involving companies that develop, manufacture, and supply pharmaceuticals, vaccines, and various types of medical devices and equipment. Such cases include the recent acquisition of ID Biomedical Corporation by GlaxoSmithKline Inc., and Bayer's acquisition of pharmaceutical company Schering AG.

Tobacco

With respect to our work in the health sector, the Bureau received a complaint alleging that “light” and “mild” descriptors on cigarettes may have contravened the Competition Act . The Bureau has reached agreements with Canadian Tobacco companies, and in particular, Imperial Tobacco Canada, Rothmans, Benson & Hedges Inc., and JTI-Macdonald Corp. They will voluntarily remove “light” and “mild” descriptors from all cigarette packaging commencing no later than December 31, 2006 and ending no later than July 31, 2007. Through this action, Canada proudly joins other countries and regions where cigarettes will no longer be described as “light” and “mild”. Public notices will soon be published in newspapers across Canada informing consumers of the change in packaging.

Advocacy

In terms of health, the Bureau's current focus is on the pharmaceutical industry. This industry is significant because it represents a large portion of Canada's health-care budget and has grown year over year in both absolute and relative dollars. The Bureau has developed a comprehensive work-plan for advocacy in this area.

For instance, the Bureau has intervened before the courts to ensure that intellectual property rights associated with pharmaceuticals are protected but not at the expense of legitimate Competition Act concerns. In particular, the Bureau intervened in a court case involving three drug manufacturers where the original judge's ruling would have resulted in a serious weakening of the Competition Act 's ability to deal with cases where companies acquired patents which might have the effect of undermining competition. See Apotex Inc. v. Eli Lilly and Co., 2005 FCA 361 .

The Bureau worked in cooperation with Industry Canada on its proposal to amend the Patented Medicines (Notice of Compliance) Regulations that govern the entry of generic pharmaceuticals into the Canadian market. Among other issues, allegations had been made that the Regulations had been used strategically by brand-name firms to improperly delay generics from participating in specific pharmaceutical markets. To address this concern, the amendments, among other changes, tightened the rules concerning patent listing requirements to re-affirm the balance Parliament intended between promoting investment in innovative new drug and the timely entry of generics.

The Bureau is planning a roundtable discussion to study the interface between competition and intellectual property law. One of the topics to be discussed is the use of authorized generics, an area of increasing interest to pharmaceutical companies.

The Bureau has also launched a study of the generic pharmaceuticals sector to enhance its understanding of how this market works. The issue of high generic pharmaceuticals retail prices is a major area of concern, and reasons for the high prices are unclear. The Bureau's study will examine the potential causes for the high prices, and how to make related markets work better.

In addition, the Bureau is looking at restrictions on pharmacists, and other health related professionals. The aim of the Bureau's study of self-regulating professions is to determine to what extent, if at all, these professions use anti-competitive restrictions to limit access to their professions or to control the competitive conduct of their members. The Bureau will also attempt to assess the economic effects on competition of the various types of restrictions. The health care professions currently being studied include optometrists, opticians and pharmacists. Other professions being studied include accountants, lawyers and real estate agents. Questionnaires have been sent to relevant professional associations, colleges and boards for these professions. The study will rely heavily on the information it receives in response. Depending on the quality of responses, the Bureau would publish a draft paper for public consultation, and then publish a final report that would inform the public and policy makers of its findings and, if applicable, the costs to consumers and the economy in terms of reduced competition.

Finally, the Bureau has been in contact with various provincial governments, namely Alberta , Nova Scotia , and New Brunswick , supporting provincial initiatives to create independent colleges of dental hygiene and suggesting ways to establish meaningful competition in the provision of dental hygiene services. On October 25, 2006, the Government of Alberta passed a new regulation that will allow dental hygienists to offer a number of services directly to clients, competing with dentists in the provision of these services. Competition in this area will likely increase access to dental hygiene services and decrease prices for Albertans.