➤ REPEAL THE MEDICARE ANTI-KICKBACK “SAFE HARBOR“

Thank you for your attention, and for visiting our website. 

 

Phillip L. Zweig MBA, executive director/co-founder

*See Government Accountability Office (GAO) drug shortage report of Feb. 10, 2014. Click HERE.

READ  Nov. 15, 2012 letter to GAO requesting investigation into GPO role in causing shortages.

​Note:  On each page of our website, articles and documents with links highlighted in RED contain material on GPOs and drug shortages. 

URGENT CALL TO ACTION!

Stop Deadly Shortages and Skyrocketing Prices of Generic Prescription Drugs by Ending the Hospital Group Purchasing Organization (GPO) and Pharmacy Benefit Manager (PBM)

 "Pay-to-Play"  Scheme

Dear Friends, Colleagues, Patients & Fellow Citizens:

As medical practitioners and concerned citizens, we're deeply anguished that millions of patients are suffering needlessly, and in many cases dying, because of the unprecedented artificial shortages and surging prices of generic prescription drugs. Most of the approximately 361 drugs* in short supply are sterile injectables administered in hospitals, outpatient facilities, and clinics. They include chemotherapy agents for ovarian, colon, bladder and breast cancer, leukemia and Hodgkin's disease; anesthetics and pain relievers; antibiotics; IV nutrients for malnourished infants, and many other generics that have been saving lives for decades.

Doctors and hospitals are rationing drugs, and patients are being forced to use substitutes that are less effective or more expensive, or both. Lately, this crisis has reached a new level of absurdity: the U. S. is now importing sterile saline solution (a.k.a salt water) from Germany, Norway, Spain, Brazil and Mexico, and sodium bicarbonate solution from Australia! Drug shortages and astronomical prices are nothing less than a public health emergency. 

These chronic artificial shortages are simply unacceptable in our market economy. After extensive research, we have concluded beyond any doubt that they were caused by the anticompetitive contracting practices, kickbacks, self-dealing, and conflicts of interest of giant hospital group purchasing organizations (GPOs). These buying cartels control the purchasing of  an estimated $300 billion+ annually in drugs, devices, and supplies for some 5,000 hospitals and thousands more nursing homes and other non-acute care facilities. 

This is a "pay-to-play" scheme in which the cartels award exclusive contracts to favored suppliers in return for exorbitant "administrative," marketing, and other "fees" (a.k.a kickbacks) and rebates. In a nutshell, they've rigged the market. As a result of these dubious practices, there are now only one or two suppliers for many of these drugs, or none at all. In a throwback to the disgraced Soviet economic system, the GPOs have virtually destroyed this once-robust American industry by undermining the time-tested laws of supply and demand that govern virtually every other industry, from autos to zucchini. Indeed, they have stifled competition in the entire hospital supplies marketplace, inflating annual supplies costs by at least 30%,  or upwards of $100 billion, according to a 2019 PADS analysis of empirical and anecdotal data.  The same kinds of corrupt practices have driven up the prices of drugs sold by PBMs to individual consumers by roughly $130 billion annually as well.

And no one seems to know where all the GPO and PBM billions are going, because there is virtually no disclosure, regulation, transparency or government oversight of these industries. That is no accident. GPOs and PBMs and their allies write big checks to powerful members of Congress to make sure we're kept in the dark about their questionable activities.

What's more, U. S. drug shortages have had a global domino effect.  Sick people in rich and poor countries alike, from Australia to Zambia, are suffering from shortages of many of the same drugs that are scarce in the U. S. 

​To replenish our drug supplies and lower prices, market competition must be restored to the broken generic  drug, hospital purchasing, and PBM industries. To accomplish that, Congress must repeal the misguided 1987 Medicare anti-kickback "safe harbor" provision, which gave rise to this crisis by exempting GPOs, and later PBMs, from criminal prosecution for taking kickbacks and rebates from suppliers.  Incredible as this may seem,  you can now read the documentation for yourself on our website.  

For a quick slideshow tutorial, "GPOs 101" starring Adam Smith: 

​​​To follow the money trail, see diagram below.

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