FTC Staff Opinion: Crouse Health Hospital’s Proposed Rx Program Is Exempt from Robinson-Patman Act

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The staff of the Federal Trade Commission has issued an opinion advising Crouse Health Hospital that an exemption under the Non-Profit Institutions Act, or NPIA, applied to its proposal to sell discounted pharmaceutical products to the employees and retirees, as well as their dependents, of its affiliated medical practice. The NPIA provides an exemption for certain non-profit entities to the Robinson-Patman Act, a U.S. antitrust law that prohibits anticompetitive price discrimination.

Crouse Health Hospital formed its affiliate, Crouse Medical Practice, to develop an integrated medical service system to help further its mission to improve access to quality health care for patients in the community. The staff letter concludes that Crouse Health Hospital’s proposal would qualify for the exemption because the hospital is an eligible entity under the NPIA. Staff explained that, consistent with Supreme Court and prior Commission precedent, offering the NPIA-discounted pharmaceuticals to Crouse Medical Practice to employees, retirees and their dependents appears to qualify under the NPIA’s “own use” requirement.

NOTE: This letter sets out the views of the staff of the FTC’s Bureau of Competition, as authorized by the Commission’s Rules of Practice. It has not been reviewed or approved by the Commission. As the Commission’s Rules explain, the staff’s advice is rendered “without prejudice to the right of the Commission later to rescind the advice and, where appropriate, to commence an enforcement proceeding.”

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