Magazine article Drug Topics

Pharmacy Cooperative Settles Price-Fixing Charges

Magazine article Drug Topics

Pharmacy Cooperative Settles Price-Fixing Charges

Article excerpt


FTC alleges anticompetitive behavior

A Puerto Rican pharmacy network (Coopharma) recently settled Federal Trade Commission (FTC) charges that it harmed competition by price-fixing. The FTC charged the network with negotiating, entering into, and implementing agreements to fix prices with third-party payers and their representatives. The FTC alleged that the pharmacy network actions spanned five years and led to higher prices for Puerto Rico's healthcare consumers.

Coopharma is composed of 300 pharmacy-owner members totaling 350 pharmacies in Puerto Rico. The membership, representing at least onethird of all pharmacies in Puerto Rico, is concentrated on the western side of the island.

The charges

The FTC specifically charged that Coopharma:

* Collectively negotiated with more than 10 payers over reimbursement rates;

* Signed 7 single-signature "master contracts" on behalf of its members;

* Undertook threats that led 2 payers to pay members higher rates through their individual pharmacy contracts.

The FTC draft response

The FTC rendered a proposed consent order that prohibits Coopharma from entering into agreements between or among any pharmacies:

* To negotiate on behalf of any pharmacy with any payer;

* To refuse to deal or threaten to refuse to deal with any payer;

* To include any term, condition, or requirement upon which any pharmacy deals, or is willing to deal, with any payer, including, but not limited to, price terms;

* Not to deal individually with any payer, or not to deal with any payer other than through Coopharma.

More specifics

Coopharma is also prohibited from facilitating information exchanges between pharmacies regarding whether, or on what terms to contract with a payer.

Coopharma is also barred from encouraging, suggesting, advising, pressuring, or inducing anyone to engage in the conduct prohibited by the FTC order. …

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