➤ RESTORE CRIMINAL PENALTIES FOR GPO KICKBACKS
➤ REPEAL THE MEDICARE ANTI-KICKBACK “SAFE HARBOR“
Thank you for your attention, and for visiting our website.
Robert A. Campbell MD, chairman
Phillip L. Zweig MBA, executive director
*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) "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 unprecedented 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 and Spain! Drug shortages are nothing less than a public health emergency.
These chronic artificial drug 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 other abuses of giant hospital group purchasing organizations (GPOs), which control the purchasing of upward of $300 billion annually in drugs, devices, and supplies for some 5,000 hospitals.
This is a "pay-to-play" scheme in which these cartels award exclusive contracts to favored suppliers in return for exorbitant "administrative," marketing, and other "fees" (a.k.a kickbacks). 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 healthcare costs by at least $30 billion, according to a 2011 empirical study.
And no one seems to know where all the GPO billions are going, because there is virtually no disclosure, regulation, or government oversight of this industry. That is no accident. The GPO industry and its 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, market competition must be restored to the broken generic injectable drug and hospital purchasing 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 from criminal prosecution for taking kickbacks 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.
Congress created this travesty by legalizing kickbacks in the hospital supply chain, and now it's up to Congress to end it. You can help. If you share our outrage, please sign our Change.org petition and DEMAND that President Obama and Congress repeal the anti-kickback safe harbor IMMEDIATELY.