Price Fixing Bill in Congress

The companies are free to require training of anoyone who handles their products. They can require that a company uphold minimum service standards, etc. They can decide how to market, whom to marke to, and really who to sell through on almost all counts.

With really one restraint - **they cannot collude on price to artifically inflate profit **. The closer they are to a monopoly, the less the free markets work, and the higher the risks of collusion.

The limited existing constraints that we had in the past - Sherman Anti-trust - came about becuas of the very real predatory practices of many, many businesses in the past. They are the minimum set of restrants required to ensure that there is a free market. Can you say "company town." (Or "Archers Daniel Midland"?)

Rooster, I'll loop back - hard to write on my cell phone. Cheers.
Michael



The on

I have a simple answer for you Ro(o)ster. Every owner of every small business out there should be free to sell the products they choose for the price they choose. I am all for a Minimum Advertised Pricing Policy which still allows the customer to receive a discount. When manufacturer's are increasing the prices to the private pay sector in order to prevent Medicare from lowering the reimbursment for the large DME's then that is price fixing in my opinion. When large national DME providers state that a manufacturer can not participate in bidding for their contracts until they take care of all the "Internet Dealers", then that is price fixing in my opinion. The last thing I would say is that the internet providers provide more assistance, education and support than most DME companies so why penalize them and the patients that use them

Don't get me wrong on the deregulation of these products all together. Should the FDA be involved in regulating CPAP machines and supplies? To that I say NO. I wish they would be sold over the counter but as long as we have the lobbiest in power, that will never happen so our only other option at this point is to fight for the rights of the consumers and small businesses out there. I am only one voice but believe strongly in everyone ability to have access to affordable healthcare.

Thank you for your post and I love the different opinions that have been posted so far.

unadog wrote: Rooster, I'll loop back

Please do.

I don't understand the medical equipment market enough to know about monopoly practices, collusion, fraud or deception.

For CPAP equipment there seems to be quite a bit of competition but definitely too much regulation by FDA.

patientadvocate wrote:I have a simple answer for you Ro(o)ster.

Good. My damaged brain can’t handle higher level thinking.

patientadvocate wrote: When manufacturer's are increasing the prices to the private pay sector in order to prevent Medicare from lowering the reimbursment for the large DME's then that is price fixing in my opinion. When large national DME providers state that a manufacturer can not participate in bidding for their contracts until they take care of all the "Internet Dealers", then that is price fixing in my opinion.

Why not prosecute these offenders under existing laws instead of adding more regulations and then suffering from unintended consequences of those regulations?

patientadvocate wrote: Don't get me wrong on the deregulation of these products all together. Should the FDA be involved in regulating CPAP machines and supplies? To that I say NO. I wish they would be sold over the counter but as long as we have the lobbiest in power, that will never happen so our only other option at this point is to fight for the rights of the consumers and small businesses out there.

Yes for getting the FDA out of the way of progress!

So good so far with your reply.

patientadvocate wrote: …. as long as we have the lobbiest in power…

But now we have a fundamental difference.

I don’t see the problem as the lobbyists (Disclosure: I hired lobbyists in the past and was successful in getting nine Federal bills that I wrote enacted into law). The problem is our regulators have the power to dole out favors to the companies represented by lobbyists

We the people have allowed our regulators to do this. If we stop our regulators from doling out favors, companies will leave Washington and lobbyists will have to look for other jobs. Let’s do it!

patientadvocate wrote: …. I love the different opinions that have been posted so far.

When you ask for opinions here, get ready to drink from a fire hose.

wrote:
ALL businesses need strict regulation.

Some take the view that government grants us our freedoms. Strict regulation can be justified under this view.

Others take the view that the Creator created us in his image and wants us to be free and wants no man to have dominion over another. Under this view, strict regulation cannot be justified. However, under this view, organizing governments to protect the aforesaid freedom of individuals is both justified and often necessary.

roster wrote:
Why not prosecute these offenders under existing laws instead of adding more regulations and then suffering from unintended consequences of those regulations?

They are trying to put back in place the rule that we have had in place for more than 100 years. The Supreme Court gutted the Sherman Anti-trust Act in 2006, in a 5-4 decision that reversed 100+ years of case law!

The rule existed because of our experience in the past with the Robber Barrons, et. al. You can imagine how hard it was to pass even limited legislation 100 years ago to regulate those folks. But the ripoffs were so blatent and eggregious that even the legislators who were in the pockets of the mega rich couldn't iognore it any more.


From another thread:

http://www.fvldlaw.com/?t=40&an=923&format=xml

The Supreme Court recently overruled the longstanding rule that a manufacturer can never directly agree with a distributor to set a minimum price that the distributor can charge for the manufacturer's products. "


This was the previous understanding of how the Sherman Anti-trust Act worked, prior to (and even after) that limited 2006 decision:

http://ezinearticles.com/?CPAP-Price-Co ... id=1833025

"The Sherman Act, a fixture of U.S. Antitrust law, prohibits price fixing as an illegal restraint on competition. The manufacturers go right up to this line, but get away with their policies because vendors are free to sell CPAPs at whatever price they choose; they just can't advertise the CPAPs below whatever price the manufacturers determine. In practice, this leads to the same result for certain vendors --- those who sell over the internet, which is where the plot really gets juicy...
"

Basically the folks above are just asking for a restoration of a rule that was in place sinc e 1890. It was there beacuse of the bad behaviore of the companies that undermined the whole free market system without it.

If there was an indication that business practices were much improved, maybe that rule could go away. But the quite blatent case of Archers Danial Midland price fixing in the 1990's show how far companies will go to cheat the public, even with this rule in place! (as well as other strling examples likek Enron, etc.) Just imagine what would happen with its repeal ....


http://en.wikipedia.org/wiki/Archer_Daniels_Midland

Price fixing
In 1993, ADM was the subject of a lysine price fixing investigation by the U.S. Justice Department. Senior ADM executives were indicted on criminal charges for engaging in price-fixing within the international lysine market. Three of ADM's top officials, including vice chairman Michael Andreas were eventually sentenced to federal prison in 1999. Moreover, in 1997, the company was fined $100 million, the largest antitrust fine in U.S. history at the time.

http://www.bankrate.com/brm/news/invest ... 01221c.asp

ADM had been tainted by allegations of price-fixing before. In 1965, it paid fines for helping to fix the price of bakery flour. In 1976, the company pleaded no contest to charges of short-weighting and false grading of grain exports. In 1978, ADM was convicted of conspiring to fix Food for Peace program prices. In 1994, ADM paid $1.5 million to end a lawsuit over price rigging in the liquid carbon dioxide market. In 1998, ADM paid nearly $70,000 to settle a sodium gluconate (MSG) price-fixing lawsuit.

ADM's main defense was that its competitors were already fixing prices when it entered each market. However, Whitacre's tapes showed that ADM took the lead in price-fixing and even added a new twist: allocating sales volume among its conspirators. At a 1992 meeting, when lysine was under 80 cents per pound, ADM Corn Processing Division President Terry Wilson proposed "friendly competition" to raise the price to 80 cents, then 95 cents, then $1.05 and then $1.20.

As Wilson told the other lysine makers in a secret meeting recorded by Whitacre, "You're my friend. I want to be closer to you than I am to any customer 'cause you can make us money." ADM president James Randall told the group, "We have a saying here in this company that penetrates the whole company. It's a saying that our competitors are our friends. Our customers are the enemy."

Can you say "RICO" (Racketeer Influenced and Corrupt Organizations Act)

una, You have some points, but in your thread isn't price fixing being confused with Retail Minimum Pricing?

I hope the guilty executives at ADM spend time in a Federal pen. One of my former bosses did and he deserved it.

roster wrote:being confused with Retail Minimum Pricing?

The problem is that price fixing can plausibly hide behind "minimum pricing." It is hard so to prove intent. It is easier to see the effect though.

Text: "No, we don't "fix" prices! We are protecting our resellers, and protecting the consumer from abuse from unscroupulous that don't provide the ruly steller, high quality of support that the skilled DME can provide!"

Subtext: "Our competitor sets their minimum price. We follow and signal our intent to cooperate by setting ours just a bit higher. Then next year we raise our price by a certain percent. If they follow, we know there won't be any destructive price wars this year. We go first this year, they go first the next. With only two main players, it doesn't take agenious to understand the signals."

I hope the guilty executives at ADM spend time in a Federal pen. One of my former bosses did and he deserved it.

Funny! You will have to share sometime!

I have an MBA. I helped start a new subsidiary for a company in the 1990s that we grew to 600+ employees and multi-billion dollars in business.

I am not too radical. I have just seen too many blatant examples of this sort of thing - Hershey's seling sugar water as apple juice (as reported in the Wall Street Journal), etc.

I do agree with most of your earlier post about buying these this OTC, etc.

Best!
Michael

unadog wrote:
I do agree with most of your earlier post about buying these this OTC, etc.

Well that is the important part.

Now if we can just get you elected!

roster wrote: Now if we can just get you elected!

Oh god no! .....

How about you?