COMMERCIAL: The competition watchdog is probing a pathology joint venture between two Essex foundation trusts and a private company.

The Competition and Markets Authority opened an investigation at the start of July into the partnership between Basildon and Thurrock University Hospitals Trust, Southend University Hospital Foundation Trust and Integrated Pathology Partnerships.

It will assess whether the transaction has resulted in a merger situation and - if so- whether this could result in a substantial lessening of competition.

If the CMA judges this to be the case the merger between the parties could be prohibited.

The first phase of the investigation is expected to be concluded by 28 August.

Basildon and Southend appointed IPP in March this year following a tender process to find a partner to help the trusts reconfigure and run pathology services across south Essex.

The trusts said the joint venture was in response to the 2008 national pathology review by Lord Carter, which suggested consolidating services across the country could save the NHS up to £500m.

As part of the deal IPP were set to invest £10m to build a new “hub” laboratory equidistant to both trusts.

The contract is supposed to last for at least ten years, and was due to go live on 1 August.

In November last year the CMA’s predecessor, the Office for Fair Trading, judged that a merger between University College London Hospitals Foundation Trust, the Royal Free London Foundation Trust and the private provider The Doctors Laboratory would not substantially lessen competition.

The merger was the first pathology joint venture to be assessed by the national competition regulator.

In March this year a plan to consolidate pathology services across six trusts in the East of England also got the go ahead after the OFT ruled it did not “qualify” for its scrutiny.