The Impact of Federal Legislation on the Issue of Product Diversion in the Medical Marketplace

Author

Michael George Vergere, Fontbonne College

Year of Award

1987

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business

Department

Business Administration

Keywords

Robinson-Patman Act, Nonprofits, Anti-Trust, Manufacturing, Device Diversion, Hospitals, Medical Devices

Abstract

This Thesis is a work that addresses the issue of product diversion and how the Federal Statutes of the Robinson-Patman Act and the Non-Profit Institutions Act have played a major role in allowing it to take place. The Introduction begins the work by stating that the problem exists and what it does to the marketplace. It also generates feelings that the government and its laws are solely responsible for the product diversion issue. The Introduction also lays groundwork for the illegality of sales that are made across marketing boundaries of products that are meant for in-house-use only. It answers the question regarding why product diversion is such a prominent violation of Anti-Trust laws.

In Chapter 1 the product diversion issue is set in its proper perspective as a violation of the Non- Profit Institutions Act. It is shown how the diverted product exchanges hands of buyers and sellers. It also addresses the impact that product diversion has on manufacturers that experience market crossover of their products. There are several passages of comments made by people in the industry of medproducts and their feelings on the product diversion issue and what can be done to begin to solve the problem. The Robinson-Patman Act is discussed and laid out in total in Chapter 2. The major points of the act which are related to product diversion are discussed and the laws that regulate the price differentials are brought into the subject.

Chapter 3 is solely dedicated to convincing the reader of the violation that occurs when products are purchased by nonprofit institutions and then resold to diverters or illegal buyers. It is proof that the Non-Profit Institutions Act is not giving the nonprofit hospital carte blanche to do what they wish with products that are bought from vendors.

The final Chapter in the work is mostly concerned with the efforts that are being made, not only by manufacturers, but by certain groups and congressional committees to solve the diversion issue. It also shows what legislation is in the works by congressmen who view product diversion as a threat to the overall health care integrity and the profit levels that should be made with the products involved in product diversion.

Document Type

Restricted Thesis

Recommended Citation

Vergere, Michael George, "The Impact of Federal Legislation on the Issue of Product Diversion in the Medical Marketplace" (1987). All Theses, Dissertations, and Capstone Projects. 662.
https://griffinshare.fontbonne.edu/all-etds/662