From Woodstock’s Susan Handelsman:
Wondering how are shortages of hospital supplies and common pharmaceuticals possible?
First, know that this is nothing new, and medical professionals have long been pleading with government to do something about it.
Obviously, government finds lobbyists more persuasive.
Read the following section from policy statement of the group Physiciansagainstdrugshortages.com
“There is extensive documentation on these questionable practices, focusing largely on the role of GPOs in undermining competition and innovation in the medical device industry in the years leading up to the drug shortage crisis. This material includes four hearings before the Senate Antitrust Subcommittee; investigations by the Government Accountability Office (GAO), the Office of the Inspector General of the Department of Health & Human Services, and the Connecticut Attorney General’s office; media reports, including a prize-winning 2002 investigative series in The New York Times entitled “Medicine’s Middlemen”; numerous successful antitrust lawsuits filed by entrepreneurial medical device firms against GPOs and/or their dominant supplier partners; independent academic research, and even a book entitled “Group Purchasing Organizations: An Undisclosed Scandal in the U. S. Healthcare Industry.” Many of these documents appear on www.physiciansagainstdrugshortages.com.
“These anticompetitive practices include, but are not limited to:
- Exclusionary, sole source, long-term contracts awarded to vendors in return for huge but undisclosed administrative, marketing, advance and other fees (a/k/a kickbacks) as well as prebates and rebates;
- Tying and bundling of product lines to give the advantage to large incumbent suppliers and discourage competition from smaller, entrepreneurial companies with fewer products;
- Forced compliance programs that impose stiff penalties on hospitals and wholesalers if the volume of their purchases from manufacturers on contract drops below 95%, in many cases, for a particular product or product line;
- A Byzantine system of manufacturers’ rebates to large, favored distributors that ensures that only those distributors can sell to GPO-member hospitals.”