Group Says Legislation Aims to Ensure 'Free and Open' Competition in Hospital Supply Industry

WASHINGTON, D.C. -- -- The Department of Health & Human

Services would conduct "oversight and supervision" of Group Purchasing

Organizations (GPOs) under the provisions of new bipartisan legislation

offered by Senators Herb Kohl (D-Wis.) and Mike DeWine (R-Ohio).  The Medical

Device Manufacturers Association (MDMA) hailed the bill as "a critical step"

in addressing the anticompetitive and other questionable practices by certain

GPOs that have long prevented cost-effective medical technologies from

reaching the market.

GPOs operate under a legal "safe harbor" exemption from the anti-kickback

provisions of the Social Security Act.  The Kohl/DeWine bill would authorize

HHS, in consultation with the Federal Trade Commission, to ensure that GPOs do

not use the safe harbor to "shield conduct that harms competition in the

hospital supply and medical device industries."

MDMA Executive Director Mark Leahey said the impetus for the legislation

is the fact that "some GPOs have not adequately addressed the anticompetitive

contracting practices that have denied patients access to cost-effective

technologies." Three hearings by the Senate Antitrust Subcommittee and a

series of investigative reports in The New York Times revealed that despite

some improvements, it had become obvious that certain GPOs would not reform

their behavior without federal intervention.

The MDMA has long asserted that the contracting practices of certain GPOs were

effectively locking innovative products out of the hospital marketplace.

Leahey said: "We are grateful to Senators DeWine and Kohl for their

persistence and leadership in ensuring that competition is allowed to flourish

in the hospital supply industry.  This legislation will allow healthcare

professionals and the patients they serve to gain access to a wide array of

innovative medical technologies that can save lives."

The Medical Device Manufacturers Association (MDMA) seeks to improve the

quality of patient care by encouraging the development of new medical

technology and fostering the availability of innovative products in the

marketplace. A national trade association based in Washington, D.C., MDMA

represents thousands of innovators and entrepreneurs in the medical device

community, including over 200 dues-paying members who develop and manufacture

medical devices, diagnostic products, and health care information systems.

Source: Medical Device Manufacturers Association