US FTC staff will not recommend that the agency challenges two new drug supplier audit programs

The staff of the USA’s Federal Trade Commission has advised a consortium of pharmaceutical and biotechnology companies that it has no present intention to recommend that the agency challenge the Consortium’s planned joint supplier quality and safety audit programs. Under these programs, consortium members will be able to share both prior quality and safety audit information and the costs of sponsoring further quality and safety audits of common suppliers.

In an advisory opinion letter responding to a request from the Rx-360 International Pharmaceutical Supply Chain Consortium, the FTC states that it appears that the audit programs: 1) do not require exchanges of competitively significant information; 2) contain protections to reduce Rx-360 members’ ability to use the programs for anticompetitive ends; 3) protect audited firms from concerted misuse of the audit programs; and 4) are intended and likely to promote efficiency, quality, and safety.

Rx-360 asked the FTC staff for guidance about the law enforcement implications of the two proposed supplier audit programs and supplied information to the staff about the proposed programs. Under the FTC’s Rules of Practice, companies can seek guidance from the Commission or its staff about specific business conduct they are considering undertaking, and what the law enforcement intentions of the Commission or staff would be. These Commission and FTC staff advisory opinions are not binding on the Commission, the courts, other governmental entities, or private parties.