Antitrust Law Daily Wrap Up, ANTITRUST NEWS: LifeLabs BC’s Acquisition of BC Biomedical Not Likely to Substantially Lessen Competition: Canada Competition Bureau, (Mar 15, 2013)

By John W. Arden, J.D., LL.M.

The Canada Competition Bureau does not intend to take action under section 92 of the Competition Act regarding LifeLabs BC’s proposed acquisition of BC Biomedical Laboratories Ltd., according to a March 15 announcement. The Bureau concluded that the regulatory framework governing the provision of diagnostic testing services was sufficient to mitigate the potential for anti-competitive effects arising from the merger, under any plausible market definition. Based on this finding, it issued a No Action Letter to LifeLabs and BC Biomedical Laboratories on February 26.

On January 15, LifeLabs and BC Biomedical announced an agreement by which LifeLabs would acquire BC Biomedical. Both companies provide diagnostic testing services for patients in the BC Lower Mainland, while LifeLabs also provides these services in the rest of British Columbia. Diagnostic testing services—including specimen collection, laboratory testing, and reporting of results to health practitioners—are offered to patients in community-based facilities, outside of hospitals. The testing services help physicians and other health care providers in the prevention, diagnosis, treatment, and monitoring of diseases.

Government funding. The vast majority of patient testing is funded through British Columbia’s public health care plan, according to the Competition Bureau. As such, the British Columbia government is the primary customer of both LifeLabs and BC Biomedical, representing a significant portion of revenues for the companies.

Highly regulated service. Significantly, the provision of diagnostic testing and the fees for the testing are highly regulated in British Columbia. The Medical Services Commission is responsible for managing the provision and payment for these services through the Medical Services Plan on behalf of the British Columbia government. Within this regulatory framework, there was little evidence of direct competition between the two parties pre-transaction and little likelihood of future competition absent the acquisition. The Bureau found that British Columbia Regional Health Authorities will continue to represent an effective alternative to the merged entity.

As a result of these findings, the Bureau concluded that the merger would not likely result in a substantial lessening or prevention of competition.

Companies: LifeLabs BC LP; BC Biomedical Laboratories Ltd.

News: Antitrust