The Federal Trade Commission (FTC) is investigating the role of drug wholesalers and purchasing companies in the shortage of generic drugs in the United States. Generic drugs make up the majority of Americans’ prescriptions, and the unprecedented shortfall of these crucial medicines has led to hospitals and patients having to ration drugs. The Biden administration is focusing on these middlemen in the drug supply chain to understand the root causes of the shortages.
The FTC and the Department of Health and Human Services have jointly requested information from the public on the contracting practices, market concentration, and compensation of group purchasing organizations and drug wholesalers. Group purchasing organizations act as intermediaries between hospitals and other healthcare providers, while drug wholesalers buy medicines from manufacturers and distribute them to providers.
The investigation aims to determine whether these middlemen have misused their market power to drive down prices of generic drugs to the point where manufacturers cannot make a profit, resulting in production stoppages and discouraging competition in the generic drug market. The FTC is concerned about the negative impact on patients who are desperate for affordable medication.
While specific companies were not named by the FTC and HHS, some of the largest group purchasing organizations for hospitals include Vizient, Premier, and HealthTrust. Cencora, Cardinal Health, and McKesson are responsible for approximately 90% of prescription drug distribution in the US. The public has 60 days to submit comments on this issue.
The role of group purchasing organizations and wholesalers has received limited attention on Capitol Hill. However, controlling high drug costs has become a key priority among lawmakers. Efforts to reduce medication costs have involved seeking greater transparency from pharmacy benefit managers (PBMs), who negotiate drug discounts on behalf of insurance companies and payors, about their business practices. PBMs argue that high drug prices are the responsibility of manufacturers, while drugmakers claim that rebates and fees collected by middlemen force them to increase list prices.
In conclusion, the FTC’s investigation into the role of drug wholesalers and group purchasing organizations in generic drug shortages is an important step towards understanding the root causes of these shortages. By examining the market practices of these middlemen, the Biden administration aims to find solutions that will ensure affordable access to essential medications for patients while allowing manufacturers to operate profitably. This investigation adds to ongoing efforts to address high drug costs and improve transparency in the pharmaceutical industry.
 is investigating drug wholesalers and purchasing companies in the US to uncover the reasons behind the shortage of generic drugs. Learn about the impact on hospitals and patients, and how the Biden administration is focusing on these middlemen to address the issue. Find out more about the investigation and how it aims to ensure affordable access to crucial medications while allowing manufacturers to operate profitably.){kind=link}