SINGAPORE - The merger of two kidney dialysis service providers, resulting in a high combined market share of more than 40 per cent, has not led to an adverse effect on competition in the industry, a Competition Commission of Singapore (CCS) study has found.
A post-merger study of the kidney dialysis market was done following the CCS's decision to clear the acquistion of Orthe Pte Ltd by Asia Renal Care (SEA) Pte Ltd in December 2012, the CCS said in a media release on Tuesday (April 26).
The acquisition resulted in a merged entity, Fresenius Medical Care Singapore (FMC), which has a combined market share that "significantly exceeded" 40 per cent.
However, the CCS allowed the merger to proceed on the basis that there would not be a "substantial lessening of competition".
It explained that the barriers to entry and expansion by new providers in the kidney dialysis markey were not high, treatment services across providers were largely similar, patients could switch easily between dialysis centres and, in the places where merged parties' dialysis centres were near each other, there was also at least one other competitor in the area.
The study was done from December 2012 to June 2015 and the findings have been published in a post-action evaluation paper available on the CCS's website.
Based on the study, the CCS found that the number of dialysis centres in Singapore had increased from 39 to 60 during the study period. The capacity of treatment slots per week increased from about 2,000 to almost 3,000.
Also, FMC's market share fell from 70 per cent to 53 per cent over the same period due to expansion and entry of competing firms across Singapore. These centres were found to have achieved similar usage rates as FMC.
The study also found that the prices for dialysis had also fallen relative to prices for other medical treatments.
The paper was independently reviewed by National University of Singapore Assistant Professor Aamir Hashmi, who concluded that it had provided "convincing evidence" that CCS's decision to clear the merger did not adversely affect the competition in the kidney dialysis market.
"The study forms part of ongoing efforts to assess the impact of its interventions so as to ensure markets work well for businesses and consumers in Singapore,"said the CCS.
Correction note: An earlier version of the story referred to the Competition Commission of Singapore as the CSC, this is incorrect, it should be CCS. We are sorry for the error.
