Justicia Shipena
The Supreme Court has ruled that the Namibian Competition Commission (NaCC) acted outside the law when it allowed its secretary to start and run an investigation into alleged price-fixing in the pharmaceutical sector.
On Wednesday, the court dismissed NaCC’s appeal against an earlier High Court decision and found that the commission unlawfully delegated its investigative powers when it launched a probe into a long-standing 50% medicine mark-up applied by pharmacies linked to the Pharmaceutical Society of Namibia (PSN).
Deputy chief justice Petrus Damaseb said the Competition Act makes it clear that only the commission itself has the authority to initiate investigations.
“The act deliberately creates a substantive and integrated investigative framework centred on the Commission as a statutory decision-maker. Section 33(1) confers on the Commission alone the power to start an investigation,” Damaseb said.
The case stems from a High Court review filed by the PSN and two pharmacies, which challenged the legality of the investigation.
They argued that the commission abdicated its statutory responsibility by allowing its secretary to initiate and conduct the probe.
This comes as back in 2017, medical aid administrator Prosperity Health requested an advisory opinion on whether a rule requiring pharmacies to impose a uniform 50% mark-up on medicines amounted to price-fixing.
In 2018, the commission’s secretary issued a notice stating that an investigation had been launched against PSN and registered pharmacies.
NaCC defended its actions, arguing that the delegation was lawful and necessary for efficiency.
It relied on its internal rules and the principle that administrative decisions remain valid until set aside by a court. The Supreme Court rejected this argument.
The court said the Competition Act strictly regulates how powers may be delegated and limits such delegation to committees established by the commission, not individual officials.
“Delegation to an individual official is not contemplated and circumvents accountability safeguards expressly designed by the legislature.”
The court found that NaCC could not use its rule-making powers to transfer core statutory functions.
“Rule-making cannot be used to effect substantive delegation inconsistent with the legislative scheme. That would amount to an impermissible amendment of an Act of Parliament by subordinate legislation.”
The court also dismissed NaCC’s reliance on the Oudekraal principle, which holds that unlawful administrative acts may have legal effect until set aside.
The court clarified that investigations under the Competition Act are meant to gather information and help the commission decide whether to approach the High Court, not to determine guilt.
“An investigation is not a trial and is not the stage at which culpability is determined,” the judgement states.
In July last year, NaCC approached the Supreme Court of Namibia seeking urgent legal action against more than 200 pharmacies accused of colluding to fix medicine prices in violation of competition laws.
In 2024, the NaCC found that more than 200 local pharmacies engaged in price-fixing over the past 15 years.
Pharmacies affiliated with PSN operate under a mandatory rule requiring a 50% mark-up on the cost of medicines dispensed.
PSN regulates the pharmacy profession in Namibia and represents more than 80% of the country’s pharmacists.
While dismissing the appeal with costs, the Supreme Court did not permanently block further action.
It referred the matter back to the NaCC, allowing it to decide whether to conduct a lawful investigation itself or proceed directly to court based on the information already on record.
Caption
POWER LIMITS…The Supreme Court finds that the Namibian Competition Commission overstepped its statutory authority in its investigation into pharmacy medicine mark-ups.
- Photo: Contributed
