US Senators urge FTC to probe Baxter, Braun & Hospira saline prices

Four U.S. Senators yesterday wrote the FTC urging a probe into possible illegal saline price inflation of 200-300% since a shortage of the fluid began in late 2013.

The letter, sent to FTC chairwoman Edith Ramirez, was signed by Conn. dem senator Richard Blumenthal, Minn. dem Amy Klobuchar and Utah reps. Mike Lee and Orrin Hatch.

The Senators singled out Baxter (NYSE:BAX), B. Braun Medical and Hospira as the U.S.’s major suppliers of saline.

“While all 3 companies have publicly spoken to their commitment to ending the saline shortage, it has persisted for 2 years even as prices have risen. Since the saline shortage began in late 2013, suppliers are reported to have increased their prices by 200-300%. This equates to increased annual costs to individual hospitals in the range of hundreds of thousands to millions of dollars. Price increases often help clear shortages, but in this case the shortage is still ongoing after nearly 2 years, raising questions about the incentives of the saline suppliers to solve this problem and about possible coordination among them,” the senators wrote.

In their letter, the senators also insinuated that suppliers were imposing higher prices on customers who didn’t purchase other items along with the saline.

“Even more troubling, hospitals have reported that all three saline suppliers are imposing even greater price increases on customers who do not also purchase additional non-saline products, effectively tying saline sales to other products such as the pumps, tubing, and catheters through which saline is delivered to the patient,” the senators wrote.

In 2014, the FDA addressed the shortage of saline, saying it was triggered “by a range of factors including a reported increased demand by hospitals, potentially related to the flu season.”

The agency allowed manufacturers, including B. Braun and Baxter, to import saline from their foreign factories to help with the shortage.

Spokespeople from Hospira and Baxter pushed back against the claims of price inflation, arguing that prices had not risen outside of usual increases. A spokesperson from Hospira said that, given supply levels, prices “one of health care’s greatest values,” according to the Wall Street Journal.

 

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