The underlying value in GPO contracts

By IPN

Group purchasing organizations are prevalent in healthcare – from supplies to services to the purchases of pharmaceuticals and treatments for patients. As the average annual cost of 61 widely used specialty drugs for treating chronic conditions was $78,871 in 20171. That number multiplied by the number of patients makes a significant impact on your bottom line, especially as the top three drugs that cost the most in a recent survey conducted with employers were injectable immunotherapy drugs indicated for psoriatic arthritis, rheumatoid arthritis and Crohn’s disease.2

For those specialty providers who perform procedures in the office, being able to contract with several companies and negotiate for best possible pricing, can be time-consuming and resource-draining.

Practices should look for a true partner in this business relationship. Pricing is very important, but the products or treatments must be the ones you use most often.

Some other things to consider:

  • Does your partner have established contracts with manufacturers that will allow you access to your needed treatments? Is your partner contracting on such a basis that manufacturers are giving them better pricing because of their volume?
  • Are your GPO contracts designed based on the treatments your provider uses specifically in your specialty? And is your partner working directly with specific pharmaceutical manufacturers to build contracts based on your needs?
  • Will your partner be willing to be transparent and share data to show how your contracts are performing?
  • Does your partner add any extra value in terms of services or solutions, which might help you move toward your goals of improving quality patient care, or ensuring your practice and providers are meeting benchmarks against others in your specialty?
  • Is your GPO willing to take a proactive approach to identify potential issues with suppliers?

 

1. https://www.beckershospitalreview.com/pharmacy/average-annual-price-of-specialty-drugs-has-nearly-tripled-since-2006-study-finds.html
2. https://www.fiercehealthcare.com/payer/costly-specialty-drugs-make-up-40-2018-employer-drug-spending-despite-few-prescriptions