WASHINGTON, March 15 /PRNewswire/ -- The Medical Device Manufacturers Association (MDMA) today asked Congress to eliminate anticompetitive practices in the hospital supply industry that deny patient access to life-saving medical technologies. MDMA Executive Director Mark Leahey urged the Senate Judiciary Antitrust Subcommittee to protect patients from the anticompetitive and exclusionary practices employed by certain large hospital group purchasing organizations (GPOs).
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Leahey’s testimony occurred during the fourth hearing the Judiciary Subcommittee has conducted on GPO marketplace abuses since 2002. The hearing - - titled “Hospital Group Purchasing: Are the Industry’s Reforms Sufficient to Ensure Competition?” -- focused on the effectiveness of self-policing codes of conduct implemented by the GPO industry.
Evidence presented by MDMA and others during the hearing showed that the GPO codes and recent Healthcare Group Purchasing Industry Initiative have had little impact, and despite some improvements, it is obvious that certain GPOs will not reform their behavior without federal intervention.
“GPOs continue to bundle unrelated products and companies, execute long- term sole-source contracts, award no-bid contracts, collect excessive fees, and police the markets for select dominant companies in a way that excludes innovative, cost-effective technologies,” Leahey said. “As a result, patients, caregivers and taxpayers still suffer from the anticompetitive and exclusionary practices of GPOs.”
GPOs currently operate under a legal “safe harbor” exemption from the anti-kickback provisions of the Social Security Act. For many years, MDMA has actively worked to reform the GPO system and firmly believes that legislation is required to ensure that patients and caregivers have access to the most effective technologies at the best price. In order for the GPOs to truly reform, the safe harbor from the Medicare anti-kickback statute must be repealed.
Repealing the safe harbor would still permit the GPOs to aggregate their volume on behalf of member hospitals. But it would also realign the incentives of the GPOs with their hospital members. GPOs would no longer be all consumed with generating fees from their vendor partners and could focus on getting the best product at the best price for their hospitals.
“So long as GPOs are allowed to sell restricted access to our nation’s hospitals by collecting payments from the largest vendors, patients, hospitals and taxpayers all will lose out,” Leahey said. “If you repeal the GPO safe harbor, you will take a giant step toward making the health care system more effective and efficient. You will also generate savings.”
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 more than 200 dues-paying members who develop and manufacture medical devices, diagnostic products, and health care information systems.
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CONTACT: Christopher Delporte, Director of Communications of MedicalDevice Manufacturers Association, +1-202-349-7173
Web site: http://www.medicaldevices.org/
