I’m reaching out to you as your constituent and as a member of a coalition called Free2Care. Free2Care is a coalition of member organizations dedicated to the doctor-patient relationship and making healthcare affordable, accessible, and of high quality. The 34 member organizations represents over 8 million Americans and includes over 70 thousand physicians. As a coalition, we have advocated on many issues over the years but most notably on hospital price transparency and the issues pertaining to pharmacy benefit managers (PBMs) & group purchasing organizations (GPOs). As an advocate for the nations’ largest coalition of physicians, pharmacists, nurses, and patients, we are writing to urge you to take immediate action to end the egregious anticompetitive activities of the middlemen that are driving up the cost of healthcare services, medications, products, and devices. We ask for much needed transparency, accountability, & competition that is supported by most Americans. In the recent request for comment by the Federal Trade Commission (FTC), our coalition represented approximately 75% of the 24,100 comments calling for a thorough investigation into the anticompetitive practices and behavior exhibited by pharmacy benefit managers. We recognize that middlemen are supposed to make products and services more efficient and affordable but this simply isn’t the case. In fact, we’ve seen the opposite happen ever since PBM’s were added to a safe harbor from the Anti-Kickback statute in 2003 under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. A Senate Finance Committee Report in 2021 conducted a study into this sector of the supply chain and shared in our conclusions that these organizations empowered by this safe harbor were harming patients and not helping them particularly for the rising costs of Insulin. The safe harbor the PBMs were awarded was the one given to GPOs in 1987 and we are extremely concerned with the actions of these groups as well. Hospital Group Purchasing Organizations (GPOs). As depicted on the May 22, 2022, episode of “60 Minutes,” GPOs threaten patient safety, restrict healthcare access, limit patient and provider choice, increase healthcare costs and stifle innovation and competition in the hospital supply chain. GPOs have also taken advantage of the COVID-19 pandemic. Multiple reports have raised red flags about anticompetitive practices and exclusive contracts in the medical device supply chain that are preventing hospitals from getting personal protective equipment, which puts both patients and providers at risk. Earlier this year, HHS called for comments on the behavior of GPOs and Free2Care submitted comments representing 80% of the 11,930 submitted. GPOs have managed to avoid the reporting requirements by inventing new fees or accepting payments which together frequently may amount to twenty percent or more of the total sales price. In one instance, the fees reportedly reached ninety-four percent of total sales volume. The sheer scale of the kickbacks required from many GPOs is problematic, as smaller manufacturers may not have the capital or manufacturing capacity necessary to meet GPO demands. If regulatory action is not taken, the current system will continue to enable GPOs to keep prices artificially high, because they reduce their own revenue if they reduce prices to their member hospitals. As the FTC stands to investigate the PBMs, we ask that Congress mandate an audit of GPO contracts and conduct a hearing on their anticompetitive behavior that has contributed to medication and supply shortages of items that are inexpensive and commonly used. We believe that your office can make a difference for all Americans by calling for a repeal of the safe harbor for both GPOs and PBMs from the Anti-Kickback statute. We believe there should be equal footing for all organizations and unfair advantages afforded to these middlemen has done more to hurt patients and medical professionals than it has helped by limiting competition and driving prices higher and higher. As insurers benefit from rebates and fees from the PBMs, hospitals and their leadership benefit from “share backs” from the GPOs with whom they affiliate, and we fully expect that there will be opposition from their partners that benefit financially in a significant way. Left unchecked, this anticompetitive behavior will lead to increased consolidated market share for a small group of middlemen who can then have monopolistic power to set prices. The business models enjoyed by both PBMs and GPOs undermines price competition, raises the cost of drugs and devices for consumers, and contributes to medical supply shortages. As your constituent, I respectfully ask that you consider us patients by holding these types of organizations accountable by conducting an audit, holding a hearing, and repealing the safe harbor that has been a significant root cause of much of this.

I’m reaching out to you as your constituent and as a member of a coalition called Free2Care. Free2Care is a coalition of member organizations dedicated to the doctor-patient relationship and making healthcare affordable, accessible, and of high quality. The 34 member organizations represents over 8 million Americans and includes over 70 thousand physicians. As a coalition, we have advocated on many issues over the years but most notably on hospital price transparency and the issues pertaining to pharmacy benefit managers (PBMs) & group purchasing organizations (GPOs). As an advocate for the nations’ largest coalition of physicians, pharmacists, nurses, and patients, we are writing to urge you to take immediate action to end the egregious anticompetitive activities of the middlemen that are driving up the cost of healthcare services, medications, products, and devices. We ask for much needed transparency, accountability, & competition that is supported by most Americans. In the recent request for comment by the Federal Trade Commission (FTC), our coalition represented approximately 75% of the 24,100 comments calling for a thorough investigation into the anticompetitive practices and behavior exhibited by pharmacy benefit managers. We recognize that middlemen are supposed to make products and services more efficient and affordable but this simply isn’t the case. In fact, we’ve seen the opposite happen ever since PBM’s were added to a safe harbor from the Anti-Kickback statute in 2003 under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. A Senate Finance Committee Report in 2021 conducted a study into this sector of the supply chain and shared in our conclusions that these organizations empowered by this safe harbor were harming patients and not helping them particularly for the rising costs of Insulin. The safe harbor the PBMs were awarded was the one given to GPOs in 1987 and we are extremely concerned with the actions of these groups as well. Hospital Group Purchasing Organizations (GPOs). As depicted on the May 22, 2022, episode of “60 Minutes,” GPOs threaten patient safety, restrict healthcare access, limit patient and provider choice, increase healthcare costs and stifle innovation and competition in the hospital supply chain. GPOs have also taken advantage of the COVID-19 pandemic. Multiple reports have raised red flags about anticompetitive practices and exclusive contracts in the medical device supply chain that are preventing hospitals from getting personal protective equipment, which puts both patients and providers at risk. Earlier this year, HHS called for comments on the behavior of GPOs and Free2Care submitted comments representing 80% of the 11,930 submitted. GPOs have managed to avoid the reporting requirements by inventing new fees or accepting payments which together frequently may amount to twenty percent or more of the total sales price. In one instance, the fees reportedly reached ninety-four percent of total sales volume. The sheer scale of the kickbacks required from many GPOs is problematic, as smaller manufacturers may not have the capital or manufacturing capacity necessary to meet GPO demands. If regulatory action is not taken, the current system will continue to enable GPOs to keep prices artificially high, because they reduce their own revenue if they reduce prices to their member hospitals. As the FTC stands to investigate the PBMs, we ask that Congress mandate an audit of GPO contracts and conduct a hearing on their anticompetitive behavior that has contributed to medication and supply shortages of items that are inexpensive and commonly used. We believe that your office can make a difference for all Americans by calling for a repeal of the safe harbor for both GPOs and PBMs from the Anti-Kickback statute. We believe there should be equal footing for all organizations and unfair advantages afforded to these middlemen has done more to hurt patients and medical professionals than it has helped by limiting competition and driving prices higher and higher. As insurers benefit from rebates and fees from the PBMs, hospitals and their leadership benefit from “share backs” from the GPOs with whom they affiliate, and we fully expect that there will be opposition from their partners that benefit financially in a significant way. Left unchecked, this anticompetitive behavior will lead to increased consolidated market share for a small group of middlemen who can then have monopolistic power to set prices. The business models enjoyed by both PBMs and GPOs undermines price competition, raises the cost of drugs and devices for consumers, and contributes to medical supply shortages. As your constituent, I respectfully ask that you consider us patients by holding these types of organizations accountable by conducting an audit, holding a hearing, and repealing the safe harbor that has been a significant root cause of much of this.