The New Supply Chain
Having all but exhausted cost savings opportunities in low-tech supplies and generics, leading national hospital groups are turning to physician-preferred items such as cardiovascular devices and orthopedic implants. But they're doing so in clinically-driven programs that embrace physicians' love for technology and otherwise turn traditional group purchasing on its head.
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For the past year, hospital purchasing groups have been under a spotlight, as Senate investigators and major media investigate charges that groups have done more harm than good in favoring large product companies. One of two groups at the center of the crisis, Premier, says it is cleaning up its act-and even hired an ethicist to help-but its take on necessary reforms embraces a broad, big-picture view of hospital/GPO relationships. MedAssets is taking more of a back-to-basics approach that stresses flexibility and choice in contracting options while helping members address the escalating costs of physician preferred products. The challenge for GPOs: the pressure to reform comes at a time when competition for hospital customers is fierce, in part because the financial pressure on hospitals has never been greater.
Pfizer was heavily invested in immuno-oncology combinations five years ago, but following setbacks, the pipeline has shifted considerably, shaped partly by the acquisition of Array.