The Federal Trade Commission (FTC) is examining the impact of wholesalers and group purchasing organizations (GPOs) on the ongoing issue of drug shortages, which has been a source of concern for patients and has drawn attention from government entities.
The U.S. Senate Committee on Homeland Security and Governmental Affairs previously identified significant risks within pharmaceutical supply chains, including a lack of comprehensive visibility and a geographical concentration of key ingredients, elevating these issues to matters of national security.
Experts also highlight that narrow profit margins in drug production and challenges in diversifying suppliers are factors that contribute to the strain on drug availability.
The FTC’s investigation into these shortages focuses on the market dynamics and roles played by wholesalers and GPOs, which it refers to as intermediaries in the pharmaceutical sector. Specifically, the FTC is exploring the compensation structures of GPOs, which negotiate drug prices on behalf of large buyers and may receive rebates and fees from manufacturers for preferential treatment.
Additionally, the inquiry is looking into the practices of wholesalers in terms of contracting, negotiations, compensation, and how they handle information on supplier quality.
The FTC is seeking information on instances where the influence of GPOs or wholesalers has directly led to a reduction in suppliers, contributing to shortages or less stable supply chains. This investigation is part of a broader initiative by the FTC to enhance competition in the pharmaceutical market.
The Healthcare Distribution Alliance (HDA), representing drug wholesalers, has acknowledged the FTC’s request for information as part of an ongoing discussion among policymakers, regulators, and healthcare supply chain stakeholders about the underlying causes of drug shortages. The HDA commits to providing input but emphasizes that the Food and Drug Administration identifies manufacturing and quality issues as primary reasons for shortages.
The HDA also notes that distributors actively endeavor to lessen the impact of shortages on patients and healthcare providers by monitoring product demand and availability, and by coordinating with manufacturers, partners, and regulators.
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