US Industry Slams FSS Drug Price Access Plan

Allowing US state and local health care facilities access to theFederal Supply Schedule prices on drugs and related equipment would have a negligible cost-shifting impact on the rest of the drug market, while saving taxpayers millions, says a study by the Public Hospital Pharmacy Coalition, a group of 70 safety-net hospitals nationwide whose mission is to increase the affordability and accessibility of pharmaceutical care for poor and underserved US populations.

Under a provision of the Federal Acquisition Streamlining Act of 1994, state and local government could access federal prices for supplies and services through the "cooperative purchasing" voluntary program run by the General Services Association. The potential impact of including drugs in this program is very small, the study found, affecting only 0.5% of the total market, and since the program is completely optional for drug vendors, the size of the market affected is likely to be much lower because some firms may choose not to take part. Also, over 40% of state and local government agencies would not be able to access FSS prices because of state procurement laws, and almost 20% of current purchases by public hospitals are already below FSS prices.

The impact of including drugs in FASA has been greatly overblown, said study author Stephen Schondelmeyer of the PRIME Institute at the University of Minnesota College of Pharmacy. He said the proposed exclusion is anti-competitive; it would protect drugmakers holding FSS contracts from competitors who would otherwise want to expand their market share by offering state and local governments the price and other benefits linked to buying through the FSS system. Competitive prices to state and local governments could easily increase the volume of sales and offset any decrease in profits associated with individual sales.