Three GPOs - Vizient, Premier and HealthTrust - buy nearly all of the drugs and medical supplies for hospitals in the U.S. GPOs use their market power to do two things. The first is to drive up prices to consumers. And the second is to shrink the profit margin for producers to virtually nothing, meaning that factories that make critical supplies are poorly maintained and prone to shutdowns for bad sanitation, which is what causes shortages.
But Biden’s Health and Human Services Secretary, Xavier Becerra, just didn’t do much about the problem until February of this year, when Federal Trade Commission Chair Lina Khan opened a joint investigation along with HHS. This announcement set off a backlash; GPOs are politically connected, and have even bought off CNN’s Sanjay Gupta and Pfizer board member and Trump ex-Food and Drug Administration (FDA) chief Scott Gottlieb, who went on CNBC to bash the probe.
So what’s the news now? Well, it turns out that Trump’s new pick for the FDA, a surgeon named Martin Makary, has written extensively about GPO consolidation.
He understands the problem exactly as anti-monopolists do.
Makary says that “policy makers should reevaluate the safe harbor laws exempting GPOs from antikickback statutes. More choices with honest prices and fair market practices promoting competition could result in lower prices, help reduce critical drug and supply shortages, and bring more innovative products to the bedside.”
Let’s hope Makary takes the FTC/HHS investigation and pursues it with vigor with the intent of nailing GPOs [Vizient, Premier and HealthTrust] pelts to the barn door.