There are some fairly large companies that don't have any interest in entering into contracts with the GPOs, which is the biggest chunk of my off-contract purchases for formulary drugs from these companies. Has anyone had any luck entering into individual contracts with these companies instead of going through your GPO? Seems crazy to me that companies like Pfizer, Lilly, and Bristol-Myers refuse to do contract pricing...?

Name of Facility: CVMC - 270 beds

City, State: Teaching

Years as a Buyer: 1

Pfizer, Lilly and those other guys who create new drugs don't need to compete for pricing. If there's no competition, why compete? The only time these companies get competitive with their pricing is when their proprietary product is coming off-patent, or another company releases a product that's very close or even therapeutically equivalent to their own. Some companies go as far as changing the forumlation of their drugs coming off patent so they could keep the proprietary status, and then truthfully claim in advertsing that the generic is not the same as theirs. Remember when Dyazide was going off-patent and SmithKline changed the formulation so they could keep on selling their brand name drug exclusively?

Way back in the Stone Age, when there were a lot of "me, too" drugs, we had the Cephalosporin Wars, COX-2 Wars, even some Quinolone Wars. But now, with companies creating unique drugs and new drug categories, there is no way these companies are going to put out a bid for pricing. There were a couple of examples in the May PPO. The only way for drug companies to recoup the $100 million-plus, they put into releasing a new drug is to charge as much as they can while that drug is the sole source of therapy.

At our Conference this year, there's going to be a lecture on projecting medication budgets, that deals in some of the topics we're discussing now, and might give you a peek at what drugs are coming off patent. I think it'll be worth your while to attend this lecture.

Name of Facility: Summerdale Enterprises, Inc.

City, State: Publishing

Years as a Buyer: 30+

Generally, we steer clear of individuals contracts for a couple of reasons, the primary one being that GPOs frown on it. We were Novation for years and have recently become a PACT member; both have been pretty emphatic against individual contracts.

Secondly, I think it's just one of the aspects of buying. You pay more to companies like Pfizer, etc., but make up the difference by staying on contract with everything else possible. And when a product comes out to compete with Pfizer, etc. you go for it!!

Name of Facility: PORTER

City, State: acute care

Years as a Buyer: 9

We are always willing to look at independant contracts. We also follow the Novation compliance when ever possible. I think my numbers last quarter were 89% compliant so you can take and utilize both options to ones advantage. We do what we have to to keep safe product available for our patients at the lowest possible cost. Sometimes an independant contracted product is the best price. I believe that is all part of the "buyer" job.

Name of Facility: Spectrum

City, State: Acute

Years as a Buyer: 15