The Federal Trade Commission and HHS have launched an investigation into whether the business practices of pharmaceutical chain middlemen like group purchasing organizations (GPOs) and wholesalers are contributing to drug shortages. The agencies are seeking stakeholder input on the issue as the Biden administration grapples with how to avert chronic generic drug shortages.
The joint request for information (RFI) comes as the generic drug lobby and consumer advocacy groups raise concerns that three wholesalers are controlling 90% of the purchasing of generic drugs for most hospitals, which they say makes it harder for generic drug makers to secure sustainable prices and ultimately contributes to the drug shortage crisis. FTC announced Wednesday (Feb. 14) it is exploring whether the wholesalers and GPOs have exploited their market power to push down prices of generic drugs to a point where these drug makers can’t make a profit and they must stop manufacturing, thereby causing shortages.
In the RFI, FTC and HHS want public input on the market concentration of GPOs and wholesalers and insights into their contracting methods.
The RFI requests comments, documents, and data regarding compliance with legal obligations by manufacturers, GPOs, and drug wholesalers under the Clayton Act and the Robinson-Patman Act.
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