President Obama and Congress: STOP generic drug shortages by ending the $300 billion hospital group purchasing (GPO) "pay-to-play" kickback scheme

          PhysiciansAgainstDrugShortages (PADS)

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 of generic prescription drugs. Most are sterile injectables administered in hospitals, outpatient facilities, and clinics. They include chemotherapy agents for ovarian, colon, and breast cancer, leukemia and Hodgkin's disease; anesthetics and pain medications; antibiotics; IV nutrients for malnourished infants, and many other generics that have been saving lives for decades. Patients are being forced to use  substitutes that are less effective or more expensive, or both. This is an inexcusable and entirely preventable public health emergency.

These chronic artificial shortages  are simply unacceptable in our market economy. 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 upwards of $300 billion annually in drugs, devices and supplies for some 5,000 hospitals. It 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). As a result of these dubious practices, there are now only one or two suppliers for many of these drugs, and in some instances, none at all. 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.

What's more, no one seems to know where all the billions are going, because there is virtually no disclosure, regulation, or government oversight. That is no accident.

To replenish our generic 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. Congress created this debacle, and now Congress must stop it.

For a primer on this issue, read our Op-Ed in The New York Times of 9/3/13, "How a Cabal Keeps Generics Scarce": http://www.nytimes.com/2013/09/03/opinion/how-a-cabal-keeps-generics-scarce.html.

For more information on how GPOs hurt patients and healthcare workers and inflate healthcare costs, visit our website: www.physiciansagainstdrugshortages.com.

PhysiciansAgainstDrugShortages (PADS) is a grassroots coalition of physicians, pharmacists and other concerned individuals. We're all working on this project pro bono and covering expenses out of our own pockets. We organized PADS, and started this petition, for one reason and one reason only: doctors are no longer able to get the drugs they need to properly treat their patients.  If you share our outrage over this travesty, please sign our petition and DEMAND that  President Obama and Congress repeal the anti-kickback safe harbor IMMEDIATELY.

Thank you for your attention.

Robert Campbell MD

Chairman

PhysiciansAgainstDrugShortages (PADS)

Contact: rcampbellmd@comcast.net

Phillip L. Zweig MBA

Executive Director

Contact: media@physiciansagainstdrugshortages.com

 

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