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FTC Launches Probe into Drug Shortages Amid Concerns Over Market Practices

 |  February 14, 2024

In response to mounting concerns over shortages of critical chemotherapies and other drugs, the Federal Trade Commission (FTC) has announced a sweeping investigation into the role of companies facilitating the purchase and distribution of medicines to U.S. hospitals.

The probe, initiated by FTC Chair Lina Khan, aims to shed light on the operations of often-overlooked entities within the drug supply chain, whose actions can significantly impact the availability of essential medications.

The inquiry will delve into whether companies involved in brokering drug purchases for hospitals, as well as the intermediaries responsible for shipping these medicines, have exploited their market influence to drive down prices of generic drugs to such an extent that manufacturers are unable to sustain production, thereby exacerbating shortages.

Read more: Acting FTC Chief Wants New Approach For Analyzing Pharma Mergers

FTC Chair Lina Khan underscored the urgency of addressing these issues, stating, “For years Americans have faced acute shortages of critical drugs, from chemotherapy to antibiotics, endangering patients.” She emphasized the need to scrutinize the practices of opaque drug middlemen and identify the factors contributing to these shortages.

As part of the investigation, the FTC will request information from drug distributors and hospital purchasing groups, focusing on their contracting practices, market concentration, and compensation structures. This comprehensive approach aims to uncover any anticompetitive behavior or market distortions that may be driving the drug shortages plaguing the healthcare system.

Source: WSJ