FOR IMMEDIATE RELEASE
Contact:
Mark Leahey
Executive Director
202.496.7150
Legislation Aims to Ensure "Free
and Open" Competition in Hospital Supply Industry
Access to Improved Patient Care through Innovation is Ultimate Goal of Senate Bill
Washington, D.C., October 4, 2004 – 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.
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 health
care professionals and the patients they serve to gain access
to a wide array of innovative medical technologies that can
save lives."
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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.