The Netherlands Authority for Consumers and Markets (ACM) has blocked the acquisition of Eurocept Homecare by Mediq. ACM has come to the conclusion that, through the acquisition, Mediq would gain a very strong position in the market for ambulatory infusion pumps for patients that receive care at home.
Martijn Snoep, Chairman of the Board of ACM, explains: “Demand for specialist care at home is rising. The quality of that care, including the medical equipment that is needed, must be and must continue to be excellent, and should be available at a reasonable price. If we had approved this merger, it would have had negative effects on prices and quality. That is why, following a thorough investigation, we have decided to block this acquisition.”
Both Mediq and Eurocept Homecare supply ambulatory infusion pumps to market participants, such as home care providers, which use these pumps for patients at home. Using feeding tubes, these electronic infusion pumps can administer the right amount of liquid medications and nutrients to patients in their homes.
What was this case about?
ACM has established that if Mediq were to acquire Eurocept, it would gain a very strong position on the market for providing ambulatory electronic infusion pumps to patients that receive care at home. Mediq currently already has a strong position on this market. It has an extensive network throughout the entire country, it enjoys high name recognition, and has excellent connections with market participants such as physicians and hospitals that prescribe infusion care to their patients that receive care at home. In addition, Mediq has the ability to provide the complete package of ambulatory infusion pumps, medication, and medical care.
Mediq and Eurocept are each other’s closest competitors in a market that already has few suppliers to begin with. Several other suppliers are active, but ACM does not expect that, following the acquisition, Mediq’s strong position will face sufficient competitive pressure within a reasonable amount of time. Existing competitors have so far been scarcely able to expand their positions. Entry into the market by new competitors is not easy either. To that end, substantial investments are needed for setting up a network with, for example, physicians and home care providers. In addition, new entrants have to conclude contracts with health insurers and hospitals.
What has ACM concluded?
If it had acquired Eurocept, Mediq would have become an unavoidable contracting party with regard to ambulatory electronic infusion pumps for patients that receive care at home. In other words, it would have become a provider that health insurers would not be able to ignore. Insurers have also shared their concerns with ACM regarding this acquisition because of the loss of a significant part of the competitive dynamics in the market.
ACM has concluded that the acquisition will lead to higher prices and reduced quality of services. That is why ACM has decided not to grant a license for this acquisition.
Mediq and Eurocept Homecare have the opportunity to file an appeal against this decision.
ACM’s concentration control: mergers and acquisitions in health care
Through its assessments of mergers and acquisitions, ACM contributes towards the affordability, accessibility, and quality of health care. In ACM’s assessments of mergers and acquisitions, the consequences for patients and insured are central. If patients and health insurers have sufficient other options after the merger or acquisition, that will help towards lower prices, higher quality, and more innovation in health care.
27-12-2021 Mediq cannot acquire Eurocept Homecare and Excellent Clinics (final notification) (in Dutch)
02-07-2021 Mediq applies for a license for the acquisition of Eurocept Homecare and Excellent Clinics (license application) (in Dutch)