A spread of generic pills and capsules.
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The Federal Trade Commission on Wednesday said it’s examining the role that drug wholesalers and firms that purchase medicines for U.S. health-care providers play in shortages of generic drugs, which account for the majority of Americans’ prescriptions.
The move follows an unprecedented shortfall of crucial medicine starting from injectable cancer therapies to generics, or cheaper versions of brand-name medicines, during the last yr, which has forced hospitals and patients to ration drugs. Problems from manufacturing quality control to demand surges can drive supply issues.
However the Biden administration is zeroing in on other players within the drug supply chain to uncover the “root causes and potential solutions” to ongoing shortages.
In a joint request for information, the FTC and the Department of Health and Human Services are searching for public comment on the contracting practices, market concentration and compensation of two types of middlemen. They’re group purchasing organizations, which broker drug purchases for hospitals and other health-care providers, and drug wholesalers, which buy medicines from manufacturers and distribute them to providers.
The request for information will examine whether those middlemen have misused their market power to chop the costs of generic drugs to the purpose that manufacturers cannot profit and need to stop production, and rival suppliers are discouraged from competing within the generic drug market.
“The FTC is curious about taking a look at this market because on one side of the market, you’ve gotten patients which can be desperate for the appropriate drug and would pay a really high price for that drug in the event that they could. And on the opposite side of the market, you’ve gotten manufacturers that may’t get greater than just a few dollars per dose of that very same drug,” Doug Farrar, director of the FTC’s Office of Public Affairs, told CNBC.
“In order that negative consequence for patients is what caused the FTC to want to review this market,” he added.
The FTC and HHS didn’t name specific firms. But Vizient, Premier and HealthTrust are amongst the most important group purchasing organizations for hospitals, while Cencora, Cardinal Health and McKesson are answerable for roughly 90% of prescription drug distribution within the U.S..
The general public may have 60 days to submit comments at Regulations.gov, the FTC said.
Group purchasing organizations and wholesalers have gotten limited attention on Capitol Hill, whilst reining in high drug costs has change into a key priority amongst lawmakers in each chambers.
As part of the trouble to chop the associated fee of medications, lawmakers have sought greater transparency from pharmacy profit managers, which negotiate drug discounts on behalf of insurance firms and other payors, about their business practices.
PBMs contend that manufacturers are answerable for high drug prices, while drugmakers say rebates and charges collected by those middlemen force them to extend list prices for products.
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