Competition watchdog raises concerns over cancer care provider’s expansion plans

MedTech & Diagnostics News: A leading provider of cancer care services in Australia, faces scrutiny from the Australian Competition and Consumer Commission (ACCC) over its proposed acquisitions of leases at St Andrew’s Ipswich Private Hospital and St Vincent’s Private Hospital Northside in Queensland, as well as St John of God Geelong Hospital in Victoria.

Currently, Icon and GenesisCare dominate the private radiation oncology market in Australia, controlling 94% of all clinics. The next largest provider, Cancer Care Associates, operates only four clinics in New South Wales.

“We are concerned that the proposed acquisition will entrench Icon’s already strong market position, which may increase its ability to raise the prices it charges or reduce the level of service it provides patients,” said ACCC Commissioner Stephen Ridgeway.

The ACCC’s Statement of Issues highlights potential impacts on the supply of radiation oncology services in the greater Geelong and Brisbane areas. The ACCC is also examining potential effects in broader regions, such as south-east Queensland.

“We are concerned that Icon’s plans to enter into new lease arrangements in South-East Queensland and Geelong may increase barriers to entry or expansion for new and existing providers,” Ridgeway added.

He noted the limited number of specialists in Australia, suggesting Icon’s expansion could restrict competitors’ ability to attract and retain necessary medical professionals.

In Ipswich, there are currently no radiation oncology providers, with the nearest facility approximately a 30-minute drive away. In Geelong, Icon operates the only private radiation oncology clinic. Brisbane has six private clinics, four operated by Icon and two by GenesisCare.

The ACCC is investigating whether Icon’s proposed acquisitions would leverage economies of scale and scope, potentially insulating the company from competition. This includes increased utilisation of specialists, staff, and equipment at multiple clinics.

“An acquisition enabling Icon to expand its radiation oncology services is concerning if it insulates Icon from competition,” Ridgeway stated.

Submissions should be emailed to mergers@accc.gov.au by 20 June 2024.

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