UNITED STATES OF AMERICA 

FEDERAL TRADE COMMISSION 

Bureau of Competition 

Health Care Division 

August 8, 2012 

E. John Steren 

Ober, Kaler, Grimes & Shriver 

1401 H Street NW, Suite 500 

Washington, D.C. 20005 

WASHINGTON, D.C. 20580 

Re: Generic Pharmaceutical Association Advisory Opinion 

Dear Mr. Steren: 

This letter responds to your request on behalf of the Generic Phffimaceutical Association (GPhA) 

for an advisory opinion concerning its proposed "Accelerated Recovery Initiative." GPhA plans 

to adopt this program, known as the ARI, to help the Food and Drug Administration (FDA) 

respond to the unprecedented increase in shortages of critically important medicines that has 

occurred in recent years. It seeks to do so by providing the FDA with information that GPhA 

believes will enable agency staff "more efficiently and effectively to accelerate the recovery of 

critical drugs in short supply" ffild thereby to help ensure patients have access to the drugs they 

need.! A key element of the ARI is an agreement among competitors to compile competitively 

sensitive production information from manufacturers of shortage drugs. 

Based on the information GPhA has provided, it appears that the proposed ARI program is not 

likely to harm competition. Although the manufacturer data that GPhA proposes to collect is 

competitively sensitive and the ARI would raise substantial antitrust concerns if this information 

were shared with competitors, the proposed program includes many safeguards designed to 

insure that such sharing does not occur. You have explained that GPhA has chosen an 

independent third party to collect and transmit the data to the FDA and that no other party, 

including GPhA, will have access to this information or any analysis derived therefrom. The 

program also includes various other features intended to minimize the risk that the ARI could 

serve to facilitate collusion among drug manufacturers. Accordingly, the Commission has no 

present intention to bring an enforcement action to challenge GPhA's proposed ARI program if it 

is implemented as described and the safeguards it contains are adhered to in practice. 

! Letter from E. John Steren to Donald S. Clark, Secretary, Federal Trade Commission (July 16, 

2012) (hereinafter "Request Letter"). Pursuant to your July 13,2012 email to Elizabeth Hilder, 

your request has been treated as one for a staff opinion under Rule § 1.1 (b), 16 C.F .R. § 1.1 (b). 
GPhA Advisory Opinion 

Angust 8, 2012 

Page 2 

Background 

Shortages of medically necessary prescription drugs have become a matter of widespread public 

concern. Although drug shortages have occurred in the past, the extent of snch shortages has 

increased dramatically in recent years. The FDA has reported that the number of drug shortages 

nearly tripled from 2005 to 2010 (rising from 61 drug products in 2005 to 178 in 2010)2 In 2011, 

the number increased to 2503 You have advised that over 80 percent of the drugs on the FDA's 

published drug shortage list are generic injectables, that is, medications administered by injection 

or intravenously, generally in hospitals or outpatient clinics. The FDA has explained that: 

"Compared to oral drugs, sterile injectables are more complex and require more specialized 

processes and equipment to manufacture, leading to a higher likelihood of manufacturing 

problems.,,4 The FDA has also observed that complex manufacturing processes, and the fact that 

relatively few companies manufacture any given injectable product, mean shortages of these 

drugs can take substantial time to resolve. Finally, the products involved are often ones that are 

critically important to patients. Cancer drugs are the largest category of injectables in shortage. 

Other products experiencing shortages include antibiotics, anesthesia drugs, drugs used in 

emergency medicine, and products used for intravenous feeding. 5 

The unprecedented extent of the current drug shortage problem has prompted congressional 

hearings;6 proposed legislation;7 government studies, reports, and workshops;8 an 

2 See FOOD & DRUG ADMIN., A REVIEW OF FDA's ApPROACH TO MEDICAL PRODUCT SHORTAGES 

10 (2011). These figures do not include shortages of vaccines, immune globulin products, and 

other biologics. See Food & Drug Admin., Consumer Updates, "FDA Works to Lessen Drug 

Shortage Impact," available at http://www.fda.gov/ForConsumers/ConswnerUpdates/ 

ucm258152.htm. 

3 Ilisa B.O. Bernstein, Acting Director, FDAlCDERJOffice of Compliance, FDA Update, 

Presentation to APhA Annual Meeting, Slide 41 (March 11,2012), available at 

http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco 

ICDERJUCM299785.pdf. 

4 FOOD & DRUG ADMIN., A REVIEW OF FDA's ApPROACH TO MEDICAL PRODUCT SHORTAGES 13 

(2011). 

5 Id. at 14-15. 

6 See, e.g., Review of the Proposed Generic Drug and Biosimilars User Fees and Further 

Examination of Drug Shortages: Hearing Before H Comm. on Energy and Commerce, 112th 

Congo (2012); Drug Shortages: Why They Happen and What They Mean: Hearing Before the S. 
GPhA Advisory Opinion 

August 8, 2012 

Page 3 

executive order;9 FDA guidance to industry;10 and numerous press reports describing the impact 

on patient care, particularly on cancer patients. 11 In June 2012, Congress enacted legislation that, 

among other things, will require more dmg manufacturers to notify the FDA in advance of any 

discontinuance or significant dismption in production of a dmg. 12 The statute also directs the 

Comm. On Fin., I 12th Congo (20 I I); Prescription Drug Shortages: Examining a Public Health 

Concern and Potential Solutions: Hearing Before the S. Comm. On Health, Educ., Labor, and 

Pensions, I 12th Congo (201 I); Examining the Increase in Drug Shortages: Hearing Before H 

Comm. on Energy and Commerce, 112th Congo (201 I); Drug Shortage Crisis: Lives are in the 

Balance: Hearing Before H Comm. On Oversight and Gov't Reform, I 12th Congo (2011). 

7 See Dmg Shortage Prevention Act of2012, H.R. 3839, 112th Congo (2012); Food and Dmg 

Administration Safety and Innovation Act, S. 2516, 112th Congo (2012); Food and Drug 

Administration Reform Act of2012, H.R. 5651, I 12th Congo (2012), Gray Market Drug Reform 

and Transparency Act of2012, H.R. 5853, 112th Congo (2012); Preserving Access to Life-Saving 

Medieations Act, S. 296, I 12th Congo (2011); Preserving Access to Life-Saving Medications Act 

0[2011, H.R. 2245, I 12th Congo (201 I). 

8 See, e.g., OFFICE OF THE ASST. SEC'Y FOR PLANNING AND EVALUATION, U.S. DEP'T OF HEALTH 

& HUMAN SERVS., ASPE ISSUE BRIEF, ECONOMIC ANALYSIS OF THE CAUSES OF DRUG 

SHORTAGES (Oct. 20 I I) (hereinafter "HHS Economic Analysis of Dmg Shortages"); FOOD & 

DRUG ADMIN., A REVIEW OF FDA's ApPROACH TO MEDICAL PRODUCT SHORTAGES (201 1) 

(hereinafter "FDA Dmg Shortages Report"); U.S. GOV'T ACCOUNTABILITY OFFICE, GAO-12-

315T, DRUG SHORTAGES: FDA's ABILITY TO RESPOND SHOULD BE STRENGTHENED (2011); FOOD 

& DRUG ADMIN., DRUG SHORTAGE WORKSHOP 12 (201 I). 

9 Exec. Order No. 13588,76 Fed. Reg. 68295 (Oct. 31, 2011). 

10 FOOD & DRUG ADMIN., GUIDANCE FOR INDUSTRY: NOTIFICATION TO FDA OF ISSUES THAT 

MAY RESULT IN A PRESCRIPTION DRUG OR BIOLOGICAL PRODUCT SHORTAGE (2012). 

11 See, e.g., Michael Muskal, FDA Acts to Increase Cancer Drug Supplies, L.A. TIMES, Feb. 22, 

2012, Part AA, at 5; Gardiner Harris, Supply of a Cancer Drug May Run out in Weeks, N.Y. 

TIMES, Feb. 1 I, 2012, § A, at 15; Rob Stein, us. Drug Shortages Threatening Those Whose 

Lives Depend on Crucial Remedies, N.Y. TIMES, May 2,2011, § A, at AIO; Jennifer Corbett 

Dooren, us. News: Drug Shortages Distress Hospitals, WALL ST. J., Feb. 1,2011, § J, at A4. 

12 Food and Dmg Administration Safety and Innovation Act, Puh. L. No.1 12-1 14, § 1001 (a), 

126 Stat 993, (2012). The requirement applies to non-biological prescription dmgs that are "life-
GPhA Advisory Opinion 

August 8, 2012 

Page 4 

Comptroller General to conduct a study of drug shortages and make recommendations on how to 

prevent or alleviate such shortages. 13 

The FDA has undertaken a variety of activities to address the drug shortage problem. In the case 

of generic injectables, this often involves asking other manufacturers of the drug in shortage if 

they are willing and able to increase their production. Other FDA strategies include expediting 

regnlatory reviews to accelerate approval of new sources of supply, new manufacturing lines, or 

new raw material sources. The FDA also exercises regulatory discretion, for example permitting 

controlled importation of equivalent products approved abroad but not in the United States. 14 In 

May 2012, the FDA reported that industry response to its October 2011 request to manufacturers 

for voluntary early notification of potential supply disruptions had enabled it to prevent 128 

potential drug shortages over the six month period from November 2011 through April 2012. 15 

The Proposed Program 

You have advised that the ARI is intended to assist the FDA in responding to drug shortages by 

providing the agency with information from manufacturers relating to their production and 

supply of designated shortage drugs. As described in your letter, GPhA plans to engage IMS 

Health Incorporated to collect information from manufacturers of shortage drugs about their 

ClUTent and projected production and supply schedules. IMS will use this data, along with market 

data it currently collects, to analyze whether, and to what extent, the anticipated supply of a 

given drug is likely to fall short of the projected demand over the next several months and then 

provide this information to FDA staff. The current focus of the program is on accelerating the 

recovery of critical drugs that are in short supply, but it is possible that the ARI program could 

also be used to assist the FDA to head off potential drug shortages. 

Your letter states that the program will operate "under terms of strict confidentiality and with 

appropriate safeguards." Request Letter at 4. In particular, IMS will report the production 

supporting, life-sustaining, or intended for use in the prevention of a debilitating disease or 

condition." Id 

13 Id at § 1 008(b). 

14 FDA Drug Shortages Report, supra note 8, at 20-21. 

15 Margaret Hamburg, Six Month Checkup: FDA's Work on Drug Shortages, FDA VOICE (May 

3, 2012), available at http://blogs.fda.gov/fdavoice/index.php/20 12105Isix-month-check-up-fdaswork-on-drug-shortages/. 
GPhA Advisory Opinion 

August 8, 2012 

Page 5 

information it collects and the analysis it performs only to the FDA and will not share it with any 

other party. 

Based on the information you provided, we understand the details of the program to be as 

follows: 

1. Scope of the Program: The FDA, with input from GPhA, will decide on the initial group of 

drugs to be addressed through the ARI progranl. GPhA anticipates that the initial focus of the 

program will be on a subset of drugs currently on the FDA's published list of drugs in shortage. 

Other criteria for inclusion in the ARI are expected to include at least the following: (a) the drug 

is expected to be in shortage for more than 90 days; (b) there is no therapeutic alternative (as 

defined by the American Society of Health-System Pharmacists' list); and (c) it is multi-source 

(that is, there are other manufacturers that might be able to increase their production). 

The FDA would have discretion to include in the ARI program a drug that does not meet all of 

these criteria-for example, a drug that is not currently on the FDA drug shortage list but has the 

potential to go into shortage-where circumstances warrant. Drugs may move into and out of the 

ARI program as requested by the FDA and depending on the circumstances. Given the benefits 

of preventing potential drug shortages from becoming actual shortages, as the ARI program 

evolves there may be a focus on drugs that are not currently in shortage but present a potential 

for a shortage to develop. 

2. Manufacturer Participation: IMS, with assistance from GPhA, will recruit drug manufacturers 

to participate in the program. All manufacturers of drugs covered by the ARI will be invited to 

participate, regardless of whether they are members ofGPhA and regardless of whether they are 

manufacturers of branded or generic drugs. When a drug is added to the ARI program, 

manufacturers of that drug that are not already ARI participants will be invited to join the 

program. GPhA will not participate in recruitment of firms selling potential, rather than actual, 

shortage drugs. Participation in the ARI is voluntary and the program will be "non-exclusive," 

that is, participating firms will be free to participate in a similar program by some other sponsor 

(were one to be organized). In addition, nothing in the program would limit the ability of a firm 

to provide information directly to the FDA or to otherwise disclose its own ARI data for other 

legitimate purposes consistent with the antitrust guidelines. 

Companies that choose to join must execute a participation agreement that requires them to pay 

annual ARI dues and to comply with specified confidentiality rules, antitrust guidelines, and 

prohibitions on misuse of the ARI process. The draft participation agreement you have submitted 

includes various commitments to be made by individual companies, GPhA, and IMS to ensure 

that the data participants submit is kept confidential and not shared or used in ways not 

contemplated by the program. 
GPhA Advisory Opinion 

August 8, 2012 

Page 6 

3. IMS Activities: The activities to be undertaken by IMS are designed to further the ARI's goal 

of providing the FDA with better information with which to address drug shortages. IMS will 

gather information from manufacturers of selected shortage drugs, perform a "gap analysis" for 

each drug included in the ARI program, and submit reports to the FDA. IMS will not use the 

information generated under the ARI for any other purpose. 

IMS will contact manufacturers of ARI drugs that have signed a participation agreement and 

request current supply and production information and forecasts for the next 90-180 days for the 

drug or drugs in question. IMS will ask manufacturers to update this information on a monthly 

basis and to notify both IMS and the FDA immediately of unanticipated changes or potential 

supply disruptions. Requests for information from manufacturers about potential shortage drugs 

in the ARI program will be limited to those manufacturers that make or have made the drug in 

question. IMS will use the production and supply data it collects, along with its own forecasts of 

demand based on past demand data, to perform the gap analysis, that is, the projection of the 

extent of a likely supply shortfall. IMS will produce a monthly report to the FDA providing both 

a summary analysis for each drug along with a detailed breakdown by National Drug Code 

number. 

IMS will provide the gap analysis and underlying data that IMS generates under the ARI 

program only to the FDA and will clearly mark each report as confidential. IMS will not provide 

information contained in these reports, or any data gathered from participants, to GPhA, ARI 

participants, or any other party. In addition, IMS will institute appropriate safeguards (e.g., 

firewalls) to limit internal access to this information to guard against the risk that Imowledge of 

this confidential information could spill over into other aspects ofIMS' s business and be used 

for non-ARI purposes. 

IMS communications with individual manufacturers under the ARI program will be limited to 

that which is necessary to gather the data needed to perform the gap analysis for an ARI drug. 

You have advised that "IMS will only be receiving supply/forecast data for the drugs at issue and 

will not be having an ongoing dialogue with the manufacturers, nor will it be requesting any 

additional infonnation from these manufacturers.,,16 All communications with manufacturers 

concerning their ability to increase their production or supply of a drug will continue to be 

undertaken by the FDA. IMS will not make recommendations to the FDA regarding how the 

agency should seek to address a given drug shortage. Instead, GPhA expects that the FDA will 

use the factual information IMS provides along with non-public information possessed by the 

agency to determine appropriate solutions to a shortage. Request Letter at 6. 

16 Letter from E. John Steren to Elizabeth Hilder (July 30, 2012) (hereinafter "Request 

Supplement") Attachment Item 2. 
GPhA Advisory Opinion 

Angust 8, 2012 

Page 7 

IMS will not disclose competitively sensitive information to GPhA. IMS will submit monthly 

reports to GPhA, and GPhA expects it may share those reports with its members and the public 

at large. These IMS reports to GPhA will identify the number of drugs addressed in the most 

recent FDA report, the number of reports IMS sent to the FDA, and the number of drugs added 

or deleted from the ARI program during the prior month. The report may identify by name the 

specific drugs addressed in the most recent IMS report to the FDA, to the extent that the drug 

already appears on the FDA's drug shortage list. In no event, however, will IMS disclose to 

GPhA information that would identify any potential shortage drug that the FDA has requested 

IMS to analyze, unless the FDA has already publicly disclosed that information. In addition, IMS 

will not disclose information that would reveal the production and supply infonnation submitted 

by manufacturers. 

Legal Analysis 

The key antitrust issne raised by the ARI arises from the fact that it involves an agreement 

among competitors to pool infonnation about their output, both present and future. As a general 

matter, the antitrust laws do not prohibit trade associations from collecting data from competing 

sellers and collectively providing information and analysis to government oftlcials. 17 Such 

activity, undertaken for a legitimate purpose, may serve to promote rather than injure 

competition and consumer welfare. 

Under some circumstances, however, such data gathering programs can serve to facilitate 

collusion among competing sellers and thereby present a substantial risk of anti competitive 

harm. 18 Trade association programs that involve sharing of competitively significant infonnation 

among competitors have long been a subject of antitrust scrutiny, given their potential to 

17 See generally U.S. Department of Justice and Federal Trade Commission, Statements of 

Antitrust Enforcement Policy in Health Care (1996), Statements 4, 5, and 6, available at 

http://www.ftc.gov/bclhealthcare/industryguide/policy/index.htm. 

18 Collusion may take the form of an actual agreement, actionable in its own right, or tacit 

coordination among firms in a concentrated market, which is not in itself unlawful. See, e.g., 

Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 227 (1993). Sharing of 

information among competitors that makes it easier for them to collude in either form is 

sometimes referred to as a "facilitating practice." See VI PHILLIP E. AREEDA & HERBERT 

HOVENKAMP, ANTITRUST LAW~ 1407b, at 38 (2010) (defining as "an activity that makes it easier 

for parties to coordinate price or other behavior in an anti competitive way. "). 
GPhA Advisory Opinion 

August 8, 2012 

Page 8 

facilitate collusion among rivals. 19 Such programs are not per se unlawful unless part of a larger 

scheme to fix prices or other competitively significant terms of dealing. Instead, they are judged 

under the rule of reason, based on their likely effects on competition in light of the particular 

circumstances.2o 

Certain circumstances here raise the potential for competitive harm. As GPhA recognizes, the 

inventory and future production information it proposes to collect is competitively sensitive 21 In 

addition, your letter notes that markets for the sale of generic injectables, which represent the 

vast majority of drugs in shortage, typically have few sellers. Such market concentration tends to 

make markets more susceptible to collusion.22 . 

19 See, e.g., American Column & Lumber Co. v. United States, 257 U.S. 377 (1921) (trade 

association program to collect and report to members detailed information on sales, prices, and 

production, including forecasts offuture production); XIII PHILLIP E. AREEDA & HERBERT 

HOVENKAMP, ANTITRUST LAW ~ 2112a, at 63-64 (2005) CThe antitrust concern resulting from 

trade association provision of price and output information is facilitation of collusion or less 

formal coordination of output or price. The fact that the coordination is not the product of a 

Sherman § 1 'agreement' does not preclude condemnation of a 'facilitating practice' that results 

from an agreement."). 

20 See, e.g., United States v. Container Corp., 393 U.S. 333 (1969). See also S. DeSanti & E. 

Nagata, Competitor Communications: Facilitating Practices or Invitations to Collude? An 

Application o/Theories to Proposed Horizontal Agreements Submitted/or Antitrust Review, 63 

ANTITRUST L. J. 93, 96-99 (1994). 

21 See, e,g, FED. TRADE COMM'N & DEP'T OF JUSTICE, ANTITRUST GUIDELINES FOR 

COLLABORATIONS AMONG COMPETITORS 15 (April 2000) ("Other things being equal, the sharing 

of information relating to price, costs, output, or strategic planning is more likely to raise 

competitive concern than the sharing of information relating to less competitively sensitive 

variables. Similarly, other things being equal, the sharing of information on current operating and 

future business plans is more likely to raise concerns than the sharing ofhistorical 

information."). 

22 See, e.g., Todd v. Exxon Corp., 275 F.3d 191,208 (2d Cir. 2001) ("Generally speaking, the 

possibility of anticompetitive collusive practices is most realistic in concentrated industries."); 

AREEDA & HOVENKAMP, supra note 18, ~ 1407e, at 44. See also HHS Economic Analysis of 

Drug Shortages, supra note 8, at 14 (noting that "strategic behavior-behavior that takes into 

acconnt the likely actions of both competitors and regulator-is a common response to an 

environment of constrained capacity with few participating firms. Such behavior can lead to 

increases in concentration and reductions in competition in the longer Hm."). 
GPhA Advisory Opinion 

August 8, 2012 

Page 9 

On its face, however, the proposed ART program does not involve the exchange or sharing 

among competitors of the output information that the program would collect. Rather, the 

information would be collected and analyzed by a third party, IMS, which would share this 

information solely with the FDA. Moreover, you have emphasized that the program will operate 

"under terms of strict confidentiality and with appropriate safeguards." Request Letter at 4. 

GPhA has designed various aspects of the program to limit the potential that the ARI might 

result in harm to competition. 

First, the role of GPhA itself is strictly limited to shield it from access to competitively sensitive 

information. GPhA is involved in developing the initial identification of drugs to be part of the 

ARI, will assist IMS in recruiting participants, and will provide financial support for the 

program. Aside from publicizing the program, no other activities by GPhA are specified. GPhA 

will receive monthly reports from IMS, which it may disseminate to its members and others, but 

these will provide no information relating to the production data that IMS has collected, nor will 

they identify potential shortage drugs that IMS has analyzed. 

Second, GPhA has defined the obligations and activities ofIMS to limit the risk that IMS would 

inadvertently facilitate anticompetitive behavior. IMS's duty to strictly limit disclosure of the 

production data gathered from ARI participants, and any information and analysis derived 

therefrom, solely to FDA staff is a binding commitment set forth in formal written agreements24 

Likewise, the agreements make clear that IMS's use of the information is strictly limited to ARI 

program activities. You have also advised that IMS plans to institute appropriate internal 

safeguards to prevent misuse or improper disclosure of information generated under the ART. 

In addition, GPhA has defined IMS's role to be providing objective data and gap analysis reports 

to the FDA, not recommendations on how to address a given shortage25 The ARI does not 

provide a role for IMS to act as a representative of ARI participant companies in matters 

involving drug shortages. Nor does the ARI set up IMS as an intermediary between ARI 

participants and the FDA to broker solutions to a drug shortage or potential shortage. This 

carefully defined role for IMS helps to guard against the risk that the ARI could have the 

unintended effect of fostering collusion among competing sellers acting through IMS. 

24 In addition, we understand that the FDA has established processes to ensure the confidentiality 

of competitively sensitive information it receives and that the FDA would treat confidential 

information received from IMS under the ARI program in the same manner. 

25 See Request Supplement, supra note 16, Attachment Item 1. 
GPhA Advisory Opinion 

August 8, 2012 

Page 10 

Third, GPhA has taken steps to discourage ARI pmticipants from attempting to use the program 

for anticompetitive ends. The draft ARI pmticipation agreement (Request Letter, Exhibit 10): (I) 

emphasizes the confidential nature of the production information to be collected; (2) advises 

companies of the need to ensure that their employees, agents, and consultants adhere to ARI 

program rules, which include confidentiality obligations embodied in the agreement and a set of 

antitrust guidelines that are provided along with the pmticipation agreement; and (3) provides 

that participants that breach those obligations will be terminated from the program. Moreover, 

pmticipants must make an express commitment not to use the ARI program activities to 

"exchange, discuss or agree on the price, output, cost, or other terms of competition, regarding 

any Shortage Drug or any other product or service." Exhibit 10, § 6( e). In addition, under the 

agreement, participants must indemnify GPhA, IMS, and other ARI participants for mly losses 

resulting from breach of this commitment. Jd. § 8. 

These various safeguards are significant to the antitrust analysis. Just as with matters of price, 

collusion among drug manufacturers on output-such as agreements to limit supply or to 

allocate markets by ceding production of pmticular drugs to a single seller-would threaten 

substantial harm to consumers.26 The safeguards GPhA has included, however, help to assure 

that the ARI is likely to operate in accordance with its legitimate purpose and limit the risk that 

the program would serve to facilitate collusion among actual or potential rivals. 

The ARI's protections against disclosure of confidential information may also offer other 

benefits. For example, assurance to manufacturers that their confidential information will be 

protected may encourage greater pmticipation in the program and thereby result in more useful 

information to support the FDA's efforts to combat drug shortages. In addition, safeguarding 

non-public information relating to the supply of critical drugs, pmticularly as to the potential for 

a shortage, may help to reduce the risk of actions that distort the supply chain, whether abusive 

conduct by other market pmticipants that may seek to exploit a shortage for their own advantage, 

or the potential for hoarding by well-intentioned health cm'e providers concerned about their 

patients. 

Finally, it does not appear that the ARI program presents other risks to competition and 

consumers. As noted above, the program is "non-exclusive," that is, it involves no agreement 

among competitors to deal only through the ARI. It would not preclude ARI participants from 

also pmticipating in another organization's program that sought to use similar data for legitimate 

26 See, e.g., AREEDA & HOVENKAMP, supra note 19, ~ 2111dl, at 54 ("Output and price are the 

two elements of a firm's decision making most directly relevant to the degree of competition in a 

market."). 
GPhA Advisory Opinion 

August 8, 2012 

Page 11 

purposes. Nor would it have any effect on manufacturers' ability to use their own participant data 

in other business contexts. 

Because anti competitive effects appear unlikely, it is Ulmecessary to assess the likelihood or 

extent of any procompetitive benefits that may result from the ARI. Moreover, various details of 

the program remain to be developed, and we understand that GPhA is continuing to discuss with 

FDA staff how best to make the ARI complement thc FDA's existing drug shortage activities. 

But we note that the stated goals of the ARI-helping to reduce market disruptions caused by 

drug shortages and thereby to increase patient access to critical medicines-suggest the potential 

for such benefits, as do the FDA's comments expressing interest in development of the 

program.

27 

Conclusion 

In sum, it appears that the proposed ARI program is Ulllikely to harm competition. Although the 

supply and output data to be collected is competitively sensitive, and markets for the drugs in the 

ARI are likely to be susceptible to collusion, GPhA has designed the program to safeguard 

competitively sensitive information, with the aim of helping FDA to address extensive and 

unprecedented supply disruptions that threaten patient care. For these reasons, the Bureau of 

Competition has no present intention to recommend an enforcement action to challenge GPhA's 

proposed ARI program if it is implemented as described and the safeguards are adhered to in 

practice. 

This letter sets out the views of the staff of the Bureau of Competition, as authorized by the 

Federal Trade Commission's Rules of Practice, and based on the facts as presented by the 

requesting entity. Under Rule § 1.3( c), 16 C.F.R. § 1.3( c), the Commission is not bound by this 

staff opinion and reserves the right to rescind it at a later time. In addition, this office retains the 

right to reconsider the questions involved and, with notice to the requesting party, to rescind or 

revoke the opinion if implementation of the proposed program results in substantial anticompetitive effects, if the program is used for improper purposes, if facts change significantly, or 

if it would be in the public interest to do so. 

Sincerely, 

MtJA(IIJ~ Markus H. Meier 

Assistant Director 

27 See Request Letter, Exhibit I.