Healthy Skepticism Library item: 8221

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Grauer DW.
Impact of integrated systems on pharmaceutical purchasing: are rules and regulations keeping pace?
ASHP Annual Meeting 1998 Jun; 55:

Abstract:

Federal law applicable to uses of prescription drugs purchased at nonprofit/charitable discounts from manufacturers is discussed within the context of integrated health care systems. The Prescription Drug Marketing Act of 1987, the Robinson Patman Act, the Nonprofit Institutions Act and other federal statutes are summarized. Federal case law, which has used a market segmentation approach concerning the above statutes, is summarized. Intra enterprise exceptions recognized by the courts may be useful for transfers within integrated health care systems. A framework for analysis of gray areas is presented. Finally, an evaluation of legal risks compared to business opportunities must be undertaken before a final decision is made. Learning objectives: 1. Summarize the Prescription Drug Marketing Act of 1987 and the five exceptions provided thereunder for prescription drug transfers. 2. Summarize the purposes of the Robinson Patman Act and the elements that must be proven in order to find a violation of the Act. 3. Within the context of integrated health care systems, describe intra enterprise exceptions to the Robinson Patman Act and the implications of the Nonprofit Institutions Act. 4. Discuss applicable case law, which uses a market segmentation approval to analyze resales by hospitals of drugs purchased at charitable/nonprofit discounts. 5. Describe a framework for analysis of gray areas relative to the application of these statutes to integrated health care systems. Self-assessment questions: True or False: 1. Prescription drugs transferred between hospitals or other health care facilities under common control are not prohibited by the Prescription Drug Marketing Act of 1987. 2. Intra enterprise transfers among nonprofit/charitable affiliates of integrated health care systems are probably not prohibited by the Robinson Patman Act. 3. Only nonprofit and charitable HMOs and other health care entities may sell prescription drugs purchased at discounted hospital prices to their members and patients under the Nonprofit Institutions Act. Answers: 1. T; 2. T; 3. T.