It is time to add the Robinson-Patman Act (RPA) to the list of laws passed by the federal government that solved one problem only to create another – albeit almost a century later, in a very specific, yet vitally important sector.
Robinson-Patman, a law enacted in the Great Depression years of the 1930s, requires manufacturers to charge the same price for a product to all buyers regardless of the quantity bought and prohibits large manufacturers from discriminating against small businesses by charging them higher prices than their larger customers.
This law has now become a crucial part of the debate on how to lower prescription drug prices and has ensnared Pharmacy Benefit Managers (PBM) and the business model they utilize.
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