Newsletter
FTC DRAFTS PHARMACEUTI-CALS PROCUREMENT
The Fair Trade Commission (FTC) is currently drafting the Principles for Transparency of In-formation in Pharmaceuticals Procurement Transactions by Medical Institutions. These will provide for complete disclosure of information on discounts, gifts, cash payments and other di-rect or indirect expenditure associated with the purchase of pharmaceutical drugs by hospitals and other medical institutions, in order to prevent secret conditions being attached to such transac-tions.
Generally speaking, public-sector hospitals' procurement of pharmaceuticals is conducted pursuant to the Government Procurement Law, and their purchasing operations are relatively reasonable and transparent. But certain private medical institutions may demand benefits in the form of discounts, gifts, cash donations or other advantages as a precondition to their purchases of pharmaceutical goods, and this leads to in-tense competition between pharmaceuticals suppliers.
To promote transparency in pharmaceuticals procurement, the FTC will require that when medical institutions trade with pharmaceuticals suppliers, the contract must explicitly state the type, quantity and monetary value of any gifts or donations. Apart from such gifts and donations as are stated in the contract, pharmaceuticals suppliers may not further provide gifts or dona-tions of their own accord, and medical institu-tions may not further demand them from sup-pliers. In addition, the FTC has provisionally set a ceiling of 50% of the total transaction value on the value of gifts and donations from pharma-ceuticals suppliers.