GPOs are currently working collaboratively with hospitals, manufacturers, distributors, the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) to ensure that hospitals and patients have access to the life-saving drugs they need.
✓ Price Adjustments: GPO contracts are the product of competitive market negotiations. Contract pricing is a constantly moving target, and drug companies regularly adjust pricing of GPO contracts based on market conditions such as manufacturing capacity, raw material availability, and competitive suppliers. That means that when manufacturers experience shocks to production, such as a higher input price, they have the ability to change the contracts quickly to reflect these shocks. GPOs manage thousands of price changes annually.
✓ Migration to Alternative Products: In addition to delivering cost savings, GPOs are the sourcing partners to hospitals and, where possible, work with hospitals and health care providers to ensure prompt and safe migration to alternative products when shortages arise.
✓ Data-Tracking: GPOs track data on drug shortages, strategize with members when there is the potential for supply chain disruption, and communicate with manufacturers and distributors to help foresee future problems.
✓ Manufacturer Evaluation: GPOs help members lessen their exposure to drug shortages by evaluating manufacturer reliability when sourcing and awarding contracts, and in helping providers establish best-practice purchasing procedures.
✓ Increased Supplier-Provider Communication: GPOs work with our supplier partners to communicate product demand from our provider members. By communicating this information to manufacturers in a timely fashion, manufacturers should have more advance notice about demand to assist in planning for production capacity.