Saline producers face call for FTC probe into shortage, rising prices

Ask Baxter International or Hospira, two of the key U.S. suppliers of saline, and they will tell you they have gone to extraordinary effort to deal with the solution shortage that has bedeviled the industry for two years. That is, in fact, what they said after U.S. senators announced that they have asked the FTC to look into whether saline producers have used the shortage to unfairly raise prices and push sales of tubes and pumps.

The letter from Republican Senators Orrin Hatch and Mike Lee and Democrats Richard Blumenthal and Amy Klobuchar to the Federal Trade Commission (FTC) asks it to look into "possible illegal collusion" by saline solution manufacturers. "Price increases often help clear shortages, but in this case the shortage is still ongoing after nearly two years, raising questions about the incentives of the saline suppliers to solve this problem and about possible coordination among them," the letter says.

The letter questions whether saline producers have even made an effort to resolve the shortage and suggests the FTC pay particular attention to whether the three key saline producers are using it to sell other equipment by tying saline sales to other products such as "pumps, tubing, and catheters."

Baxter International ($BAX) and Hospira, which make up the three producers along with B. Braun Medical, responded adamantly on Wednesday that they have gone to great lengths to help the FDA and the industry solve the shortage.

"Baxter has made extraordinary efforts to maximize the availability of sterile solutions," Baxter spokesman John O'Malley said in an emailed statement.

He explained that those efforts included "securing additional sources of supply" from a plant in Spain that the FDA has now approved to sell into the U.S. The agency is also evaluating a second Baxter plant in Mexico.

A statement from Hospira, now part of Pfizer ($PFE), said that the company responded initially to the shortage "by expanding its production of saline products to maximum capacity through manufacturing 24 hours a day, 7 days a week."

Neither company responded to suggestions by the senators that they may have tied saline pricing to sales of their medical equipment, and neither mentioned that ongoing recalls by each had subtracted from the additional production they have offered up in the face of the shortage. Both, instead, insisted that saline remains a great value in the U.S.

O'Malley said that while Baxter has raised saline prices by "modest … single to low double digit" amounts during the past couple of years, it had not pushed the prices up by the 200% to 300% suggested by the senators. "Sterile IV saline solution is one of the best medical values in healthcare today--the cost of this Baxter prescription product is less than a cup of coffee."

- find the letter here

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