Originally Published MX July/August
2002
BUSINESS NEWS
HIGPA Adopts GPO Code of Conduct
Responding to industry
criticism of the policies and practices of group purchasing organizations (GPOs),
the Health Industry Group Purchasing Association (HIGPA) has drafted a voluntary
GPO Code of Conduct—a set of principles "designed to assure the operation
of a thriving, innovative, and competitive healthcare marketplace."
Creation of the
code came after April hearings before the Antitrust, Competition, and Business
and Consumer Rights Subcommittee of the U.S. Senate Judiciary Committee ended
in a demand that GPOs devise such a code within 90 days. At the hearings, small
device manufacturers had complained that single-source contracts with large
device companies and costly administrative fees make it virtually impossible
for them to remain competitive in the medical device market. The competitive
edge of small device manufacturers is further dulled by the fact that healthcare
purchasing is dominated by just two GPOs, Novation (Irving, TX) and Premier
Inc. (San Diego).
The voluntary GPO
Code of Conduct was composed by a working group of HIGPA members, including
senior GPO executives, manufacturers, and other supply-chain partners, such
as hospitals. HIGPA’s board of directors unanimously adopted the draft
code at the beginning of June.
The code is divided into two sections. The first section provides a list of
definitions for terms and phrases relevant to the group purchasing process.
The second section provides a detailed list of guidelines for GPOs. Under the
provisions of the code, GPOs would be expected to execute policies in the following
areas.
- Report to GPO
members the amount of all payments received from healthcare product suppliers.
- Implement internal
policies to prevent individual as well as corporate conflicts of interest.
- Implement policies
and contracts that allow for the free exchange of clinical performance, safety,
and technological information among manufacturers and GPO-member purchasers.
- Support programs
and processes that promote safety, cost reduction, and clinical comparability.
- Encourage race and gender diversity among product suppliers.
HIGPA’s code
does not directly address the issue of administrative fees charged by GPOs,
which may have been the most contentious issue raised during the subcommittee
hearings. In a press release about the code, HIGPA noted that it is "prevented
by antitrust laws from addressing certain specific company business practices,
such as those practices surrounding the level of administrative fees."
Instead, the code focuses on "ensuring full disclosure of all information
that GPO members need in making healthcare purchasing decisions."
Looking to complete the Code of Conduct, HIGPA has asked lawmakers to provide input on its group purchasing principles. The organization hopes to implement the code later this year.
Copyright ©2002 MX
