Group purchasing: An overview

Abstract

The various types and operational methods of purchasing groups are described, and evaluation of groups is discussed. Since group purchasing is increasing in popularity as a method of controlling drug costs, community and hospital pharmacy managers may need to evaluate various groups to determine the appropriateness of their services. Groups are categorized as independent, system based, or alliance or association based. Instead of "purchasing," some groups develop contracts for hospitals, which then purchase directly from the vendor. Aside from this basic difference between groups that purchase and groups that contract, comparisons among groups are difficult because of the wide variation in sizes and services. Competition developing from diversification among groups has led to "super groups," formed from local and regional groups. In evaluating groups, advantages and disadvantages germane to accomplishing the member's objectives must be considered. To ensure a group's success, members must be committed and support the group's philosophies; hospital pharmacists must help to establish a strong formulary system. To select vendors, groups should develop formal qualification and selection criteria and should not base a decision solely on price. The method of solicitation (bidding or negotiating), as well as the role of the prime vendor, should be studied. Legal implications of group purchasing, especially in the areas of administrative fees and drug diversion, must also be considered. The most advantageous group for each organization will include members with common missions and will be able to implement strategies for future success.