Cooperating for better care.

Group Purchasing Organizations

Tag Archives

Some systems sometimes cutting out medication middlemen


Modern Healthcare reports on how some hospital systems, now often facing   drug shortages, are developing  direct relationships with manufacturers and buying directly from them when the distributors’ usual channels dry up.

“There were 185 drugs in shortage as of the fourth quarter of 2015, and the figure has averaged about 257 since the start of 2011, according to the University of Utah Drug Information Service. Some of the products in short supply are vital, such as the epinephrine administered with CPR to reverse cardiac arrest and the antibiotic meropenem,” the publication reported.

Still, there are problems associated with depending on direct ordering: “But direct ordering could undermine the value proposition of the distributors and threaten the administrative fees that GPOs {Group Purchasing Organizations} collect from manufacturers and distributors, said Jamie Kowalski, a Milwaukee-based healthcare supply-chain consultant,” Modern Healthcare reported.

“This disrupts this historic relationship between GPO, distributor and manufacturer. It’s not only a relationship issue, it can be and generally is a financial impact.”

“Engaging in what is sometimes called ‘limited distribution’ of pharmaceuticals can be an arduous task and may not be suitable for smaller systems. Larger, complex integrated delivery networks such as 17-hospital Centura have the scale and resources that enable them to manage the logistics.”

“Manufacturers have increased their use of direct accounts amid persistent shortages, veering from a distribution model long dominated by companies such as AmerisourceBergen, Cardinal Health and McKesson Corp. Some drugmakers will intermittently pull their products from distributors when manufacturing issues strain their supply, ” the publication wrote.


Contact Info

(617) 230-4965

Wellesley, Mass