A wide range 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 corporations 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 in search of public comment on the contracting practices, market concentration and compensation of two kinds 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 should stop production, and rival suppliers are discouraged from competing within the generic drug market.
“The FTC is involved in taking a look at this market because on one side of the market, you’ve got patients which are 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 got 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 end result for patients is what caused the FTC to want to check this market,” he added.
The FTC and HHS didn’t name specific firms. But Vizient, Premier and HealthTrust are amongst the largest group purchasing organizations for hospitals, while Cencora, Cardinal Health and McKesson are accountable for roughly 90% of prescription drug distribution within the U.S..
The general public could have 60 days to submit comments at Regulations.gov, the FTC said.
Group purchasing organizations and wholesalers have gotten limited attention on Capitol Hill, at the same time as reining in high drug costs has grow to be a key priority amongst lawmakers in each chambers.
As a part of the trouble to chop the fee of medicines, 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 accountable for high drug prices, while drugmakers say rebates and costs collected by those middlemen force them to extend list prices for products.
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