GPOs are not responsible for generic drug shortages
Sen. Charles Schumer has been a consistent champion for patients and has worked vigorously to ensure that New Yorkers have access to the prescription drugs they need. (“Another Voice: Schumer defends system that creates shortages of critical prescription drugs,” March 16 News). Those who say otherwise have not watched him at work.
Schumer has used his powerful positions on the Senate Judiciary Committee and Senate Finance Committee to assure safe and reliable supplies for patients, physicians and hospitals. He has worked with health care group purchasing organizations (GPOs) and our supply chain partners who are taking innovative steps to mitigate the impact of generic drug shortages. GPOs are working to help solve the drug shortage problem through predictability and reliability provided by long-term contracts with manufacturers. All GPO contracts are voluntary and the product of competitive market negotiations. All hospitals can purchase “off contract” and often do. Contracts can be canceled and pricing regularly adjusted. Manufacturers consistently and quickly adjust pricing of GPO contracts when they experience shocks to production.
Hospitals use GPOs to aggregate their purchasing power and deliver cost savings. GPOs do not manufacture, compound, sell or take title to these drugs or any drugs in shortage. GPOs work with hospitals, manufacturers and distributors to help maintain a safe and reliable supply of products for health care providers.
As those who are intimately knowledgeable with the drug supply system know, GPOs have nothing to do with generic drug shortages. Even drug manufacturers and hospitals acknowledge this. The true causes of drug shortages are manufacturing problems, quality issues and barriers to getting new suppliers on line when supply is disrupted.
Supply Chain Association