While S. 2880 is scarcely the largest piece of legislation to come out of Congress in recent memory, the bill could impose a good deal of work on the Department of Health and Human Services, the Attorney General's office and the FTC. The net effect on the U.S. healthcare marketplace has also been examined.

S. 2880 requires that fees paid to GPOs “not exceed a total of 3% of the purchase price“ of goods and/or services. The bill also mandates that any remuneration “includes only those reasonable costs associated with the procurement of products and the administration of valid contracts,“ but “does not include marketing costs, any extraneous fees or any other payment intended to unduly or improperly influence the award of a contract based on factors other than the cost, quality, safety or efficacy of the product.“ How federal agencies would deal with the associated workload is not clear.

The potential economic impact of the bill is the subject of controversy. Sen. Herb Kohl, the author of the bill, described S. 2880 as “moderate and measured legislation,“ which was crafted to respond to the discovery that more than one vendor had charged fees in excess of 20%. On the other hand, according to the Health Industry Group Purchasing Association (Chicago), its commissioned study, conducted by Muse & Associates (Washington) indicates that full implementation of S. 2880 would “increase total direct U.S. healthcare spending by between $29.3 billion and $34.6 billion over the 10-year Congressional budget scoring window“ and would result in “increased spending for Medicare and Medicaid programs between $1.2 billion and $9.7 billion.“

– Mark McCarty, Washington Editor

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