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US FTC OKs Rx-360 audits

By Nick Taylor , 20-Sep-2010
Last updated on 20-Sep-2010 at 12:01 GMT

The US FTC has given a positive advisory opinion to Rx-360’s shared audits and said the programme appears to offer “cognisable cost-saving and safety enhancing features”.

Rx-360 is proposing joint and shared audit programmes as a means of enhancing supply chain quality and authenticity. To establish the programmes comply with competition law Rx-360 approached the US Federal Trade Commission (FTC).

In its response the FTC states it currently has no intention of challenging the implementation of either the shared or joint audit programme. Martin Van Trieste, Rx-360 chair, said the positive opinion “is great news” for the organisation.

It provides the organisation with the type of endorsement that will accelerate our growth, foster collaboration and better enable us to work toward our mission to protect patients around the globe”, said Van Trieste.

Safeguards

The FTC gave the positive opinion because it appears the audit programmes do not require exchanges of competitively significant information. Rx-360 has also put protections in place to limit Rx-360 members’ ability to use the programmes for anticompetitive purposes.

Safeguards highlighted by the FTC include: protecting the identity of audit sponsors, even from each other; redacting audit reports to exclude trade secrets and confidential information; and monitoring of members’ compliance with the Rx-360’s antitrust policy by an outside legal counsel.

Auditees also appear to be protected from concerted misuse of audit programmes, said the US FTC. For example, audits are conducted by third-parties selected on the basis of objective standards. Rx-360 will have no role in approving or disqualifying a supplier based on an audit.

Cost-savings and consumers

Finally, the FTC said “there appear to be cognisable cost-savings associated with the audit programmes” which could be passed on the consumers. Also, consumers may be better assured of the quality and safety of components and processes used to produce pharmaceuticals.

The FTC said: “It appears that the joint audit programme will enable manufacturers to reduce the costs of duplicative audits at common suppliers and more productively allocate audit resources. Suppliers too could enjoy cost savings by dint of fewer independently-sponsored on-site audits.”

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