Publications | FAQs | HIGPA Code of Conduct Principles

	Receive our bi-monthly Chairman’s Report to stay up-to-date with industry news, trends and advances.
	Receive our daily eNews which provides our members with tools that assist them in responding to challenges and opportunities within our industry.
	And more ...

FOR IMMEDIATE RELEASE
Contact: Carolyn Hickey
Phone: 703-243-9262

Arlington, VA (June 7, 2005) – "Current laws continue to be the most cost effective and beneficial approach to assuring antitrust and anti-kickback compliance" in the health care supply chain industry, said Robert Betz, Ph.D., President and CEO of the Health Industry Group Purchasing Association (HIGPA) in a May 24th letter to the U.S. Department of Health and Human Services Inspector General (HHS IG). HIGPA’s letter to the IG was sent to correct the erroneous allegations the Medical Device Manufacturers Association (MDMA) stated in their letter to the agency regarding the health care group purchasing industry.

"It is unfortunate that the MDMA provided the HHS IG with such a distorted and misleading perspective of the health care group purchasing industry. The rehash of arcane business practices needs to end. It’s time for MDMA and its members to accept that the health care supply chain is an extremely competitive marketplace, a marketplace MDMA says they are seeking," said Dr. Betz. "Moreover, any regulatory or legislative changes that MDMA is proposing to the GPO business model would only needlessly add to the administrative burden and expense of health care for providers, payers and ultimately patients."

The following are issues that HIGPA brought to the attention of the IG.

1. Summarized the Federal Trade Commission and Justice Department’s positive assessment of the industry:
   • After an extensive review of the marketplace leading federal antitrust regulators overseeing the health care group purchasing industry concluded in their July 2004 report that "no changes to the GPO antitrust safe harbors were necessary, ample tools exist to assure competition in the industry and contracting practices would be examined on a case-by-case basis."

2. Highlighted the consequences of implementing the changes to the safe harbor as proposed by MDMA.
   • Among many corrections HIGPA identified to the IG, regulation proposed by MDMA "will create a great deal of compliance uncertainty and, as a result, is more likely to hamper competition and innovation particularly with regard to GPO business models and relationships, services and effectiveness in the marketplace."

3. Identified the findings in the IG’s audit of members of the GPO industry.
   • In correcting MDMA’s assertions related to market share and increases in product prices HIGPA wrote, "MDMA’s assertion that GPOs only sell market share to suppliers is without basis. GPOs negotiate various types of discounts and rebates that benefit their members, regardless of quantities of purchases. Finally, it cannot be asserted that the higher the product and service prices under the GPO contract, the more money a GPO makes. To the contrary, higher prices mean fewer purchases under the GPO contract and not only less money per contract but fewer members for the GPO. MDMA ignores the marketplace realities."

4. Included the provisions adopted by the industry in their Code of Conduct in 2002 and the related initiatives since implementation.
   • HIGPA identified the long strides the group purchasing industry has made in ensuring transparency of contracts, implementing protections against conflict of interests and providing opportunities for small manufacturers to obtain contracts, among others, all in the spirit of providing the best patient care.

5. Provided an historical perspective on the laws and regulations governing the group purchasing industry.

HIGPA is a chartered trade association of over 140 health care purchasing and supply chain organizations. HIGPA's Industry Members include purchasing groups, associations, and health care provider alliances. HIGPA's Trading Partner members include many of the world's leading health care product manufacturers, distributors, wholesalers and related suppliers. According to a recent study conducted by a former principal analyst at the Congressional Budget Office, hospitals save patients over $30 billion each year by purchasing products through group contracts.

To learn more about HIGPA or the group purchasing industry, visit www.higpa.org or call 703-243-9262.

Return to Press Room