Federal regulators are seeking more information about group purchasing organizations and drug wholesalers as they investigate pharmaceutical pricing and generic drug shortages.
The Federal Trade Commission and Health and Human Services Department on Wednesday issued a request for information, seeking input from the public on whether GPOs and wholesalers are meeting antitrust laws, if GPOs’ exemption from a federal law that bans kickbacks affects market concentration and drug shortages, and if the dominant market share of several GPOs and wholesalers has limited competition, among other topics.
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The move comes as regulators and Congress continue to probe pharmaceutical intermediaries, which have been blamed for drug shortages and exorbitant drug prices.
“Today’s announcement is part of the Biden-Harris administration’s work to tackle health care monopolies and lessen the impact on vulnerable patients who bear the brunt of this lack of competition,” HHS Secretary Xavier Becerra said in a news release.
The Healthcare Distribution Alliance, which represents wholesalers, said in a statement it is aware of the request and will provide wholesalers' perspective to the FTC and HHS.
The association representing GPOs, the Healthcare Supply Chain Association, said in a statement it looks forward to "sharing more with the FTC about the critical role of GPOs in addressing the ongoing drug shortage crisis.”
Wholesaler Cardinal Health declined to comment and wholesaler Henry Schein did not immediately provide a comment. Group purchasing organizations Vizient and Premier did not immediately provide a comment.
GPOs negotiate deals for drugs and other medical supplies between providers and manufacturers and distributors. Wholesalers purchase drugs directly from manufacturers and deliver them to providers.
Johns Hopkins University researchers argued that GPOs can drive up healthcare costs, according to a 2018 peer-reviewed study published in the Journal of the American Medical Association.
Since GPOs are exempt from a federal law that bans kickbacks or rebates in return for furnishing items or services, they can ask drug manufacturers to pay a fee to have their products featured in their catalogs, or even a premium fee to become a sole supplier. That could drive up the cost of supplies if manufacturers pass on those fees to hospitals and contribute to drug shortages, researchers said.
The public will have 60 days to submit comments.
