Sen. Herb Kohl (D-Wis.), ranking minority member of the Senate Judiciary Committee's antitrust subcommittee, again asked federal officials to tighten the reins on hospital group purchasing organizations. In a letter to Timothy Muris, chairman of the Federal Trade Commission, and R. Hewitt Pate, assistant attorney general, Kohl reiterated a request that the FTC and Justice Department re-examine a joint policy statement providing an "antitrust safety zone" for GPOs. Kohl said the subcommittee's 18-month inquiry into the GPO industry, as well as recent FTC-Justice Department hearings, "has convinced us that revision to (the joint policy statement) is necessary." Among other areas, officials should re-examine purchasing volume thresholds for challenging contracts, he said. Kohl also said the safety zone should not protect GPOs engaging in potentially anticompetitive practices such as contracting exclusively with one vendor, bundling disparate products, requiring commitment levels from hospitals or accepting administrative fees greater than 3% of sales. Kohl first requested a review of the policy statement in April 2002 when he was subcommittee chairman.
The Health Industry Group Purchasing Association (HIGPA), which represents GPOs, said it was not surprised by Kohl's action given his "singular views of the industry." In a written statement, association President and CEO Robert Betz said, "HIGPA has anticipated this further exertion of pressure on these agencies to modify Statement 7 prior to the completion of the FTC's thoughtful and meticulous examination of the related issues which are currently under way. Nevertheless, we remain confident the FTC will complete its work in an appropriate manner." -- by Cinda Becker