Wellington High Court has ordered a Nelson pharmacy and one of its directors to pay $394,000 in fines for price-fixing.
Prices Pharmacy and company director Stuart Hebberd admitted the action after the Commerce Commission filed proceedings in April 2018.
It alleged that the pharmacy and Hebberd facilitated the arrangement with competing Nelson pharmacies in May 2016.
The arrangement had come up after a meeting with 10 Nelson pharmacy owners in April 2016, and stopped in June that year when the owners received additional taxpayer funding from Nelson Marlborough District Health Board.
In most cases, the arrangement resulted in consumers paying $1 more for $5 prescriptions.
Justice Dobson said it "substantially lessened" competition in the Nelson pharmacy market, to the detriment of the customers.
Commerce Commission chair Anna Rawlings said the commission accepted that the defendants did not intend to breach the Commerce Act and were motivated by what they considered to be underfunding of prescription medicines.
Despite that, Rawlings said the case was a timely reminder of obligations under the Act, and risks of discussing prices with competitors.
"Competition between pharmacies is important because studies suggest that even modest changes in patient charges can result in some patients not collecting all or some of their medicines, which can in turn put pressure on other aspects of the health system such as hospitals."