From CNBC:

The Federal Trade Commission is investigating the role of drug wholesalers and companies in causing shortages of generic drugs, which make up the majority of Americans’ prescriptions. Shortages of crucial medicine have been creating problems for hospitals and patients, prompting the Biden administration to dig deeper into the root causes and potential solutions for ongoing shortages. The FTC and HHS are seeking public comment on the contracting practices, market concentration, and compensation of group purchasing organizations and drug wholesalers.

The FTC and HHS are particularly concerned about middlemen cutting the prices of generic drugs to the point that manufacturers can’t profit and have to stop production, as well as discouraging rival suppliers from competing in the generic drug market. The FTC is interested in studying this market due to the negative outcome for patients, who are desperate for the right drug, while manufacturers are struggling to make a profit.

Though specific companies were not named, Vizient, Premier, and HealthTrust are some of the biggest group purchasing organizations for hospitals, while Cencora, Cardinal Health, and McKesson are responsible for roughly 90% of prescription drug distribution in the U.S. The public will have 60 days to submit comments at Regulations.gov, and group purchasing organizations and wholesalers have garnered limited attention on Capitol Hill despite the significant impact on drug shortages.

As part of the effort to reduce medication costs, lawmakers are seeking greater transparency from pharmacy benefit managers about their business practices. PBMs argue that manufacturers are responsible for high drug prices, while drugmakers claim that rebates and fees collected by those middlemen force them to increase list prices for products.



Read more: FTC, HHS examining cause of generic drug shortages