FTC Digs into Drug Shortages
Reputedly, the Federal Trade Commission (FTC) has initiated an inquiry into the recent scarcity of crucial chemotherapies like carboplatin and cisplatin in U.S. hospitals. The aim is to unravel the market dynamics behind the shortcomings of vital medications.
Market Influence Under Scrutiny
The FTC is delving into the practices of drug distributors and hospital purchasing groups, inspecting their contracting methodologies, market concentration, and compensation structures. There is a particular interest in examining whether market influencers have leveraged their power to drive down generic drug prices, sparking concerns of market manipulation.
Market Dominated By a Few
The FTC’s inquiry targets a market largely controlled by a handful of companies. Three major groups handle drug purchases for most U.S. hospitals, while three principal wholesalers supply about 90% of drugs to healthcare entities across the nation.
Group Purchasing Organizations’ Role
The three primary group purchasing organizations (GPO) – Vizient, Premier Inc (PINC), and HealthTrust – hold significant sway over hospitals, utilizing their bargaining power to secure low prices. Critics argue that these prices are so low that some drugmakers reduce production or completely withdraw from the market.
Key Wholesalers in the Spotlight
Cencora Inc (formerly AmerisourceBergen), Cardinal Health Inc, and McKesson Corporation are the major drug wholesalers in question.
Official Announcement Anticipated
According to sources as reported in the Wall Street Journal, the FTC is poised to make an official announcement of the inquiry soon, potentially on Wednesday. This move signifies how the extent of the drug shortage issue has spurred federal agencies to action.
Trade Associations’ Response
Trade associations representing hospital purchasing groups and pharmaceutical distributors have come forward to defend their practices amidst the FTC’s investigation. The Healthcare Supply Chain Association lays the blame on manufacturers’ quality issues, while the Healthcare Distribution Alliance emphasizes raw material sourcing difficulties and unpredictable spikes in demand as factors contributing to the shortages.
Disclaimer for Readers
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image by HeungSoon from Pixabay
