Washington, D.C. — The American Economic Liberties Project today submitted a comment on House Energy and Commerce Committee Chair Cathy McMorris Rodgers’ discussion draft of the Stop Drug Shortages Act.

“A handful of oligopolistic hospital buying agents, known as group purchasing organizations, are a driving force behind today’s unprecedented shortage of basic medications,” said Sara Sirota, Policy Analyst at the American Economic Liberties Project. “While Chair McMorris Rodgers is on the right track in ramping up oversight over these middlemen, her bill must go further by eliminating the GPO’s dangerous exemption from the Anti-Kickback Statute.”

This safe harbor, granted by Congress more than 30 years ago, has allowed GPOs to run a pay-to-play scheme whereby many drug makers cannot afford to keep their production lines open, increasing the likelihood of shortages. In addition to repealing this exemption, the Stop Drug Shortages Act could be strengthened by directing the Health and Human Services Department’s Office of Inspector General to launch an investigation into GPO compliance with the terms of the safe harbor. GPOs should also be prohibited from using sole-source contracts, which require hospitals to buy particular supplies exclusively from a designated manufacturer.

For more information on GPOs, see Economic Liberties’ 2022 request to the Federal Trade Commission to open a 6(b) investigation into the industry.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.