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March 27, 2006
For Immediate Release
Media Contact: Jennifer Kasowicz
Marketing, HIGPA
(312) 673-4970
jkasowicz@smithbucklin.com

Health Industry Group Purchasing Association (HIGPA) Chairman, Al LoBiondo, spoke out today on the recent St. Paul Minnesota court decision that entered a pre-trial ruling in favor of Guidant Sales Corporation’s claim that Aspen Healthcare Metrics had tortiously interfered with Guidant’s contracts with its hospital clients. LoBiondo is concerned that Guidant may now claim the court’s ruling also sets the extent of control that a hospital has over the data residing in its own information systems and data bases.

In its ruling, the court interpreted the confidentiality terms, standard in Guidant CRM contracts with its hospital customers, as precluding those hospitals from sharing their Guidant contracts with any “third party” without the company’s expressed, written permission. The court ruled that because Aspen was a contractor to the hospital it was a “third party” under Guidant’s confidentially terms, despite the provisions in Aspen’s contracts with the hospitals that expressly state Aspen is acting as the hospital’s agent.

In response to the ruling, LoBiondo said: “Any event or action which has the potential to disrupt the present system that helps lower the costs to hospitals and the American healthcare system must be taken seriously. HIGPA is currently gathering and analyzing information related to the lawsuit. If contract confidentiality is being used to hinder health care provider access to pricing information, it would have a negative impact on the American healthcare system. This decision unfortunately does just that.”

Guidant’s position appears to be that its contract confidentiality provisions prohibit hospitals from disclosing, in an otherwise legally acceptable format, the prices of the devices they buy to consultants and other service providers without their expressed permission. Furthermore, Guidant contends that their confidentiality clauses prohibit hospitals from sharing pricing information with independent contractor physicians who use the devices and the patients who receive them. In essence, meaning that hospitals in the same system would be prohibited from sharing pricing information.

LoBiondo went on to say: “The ultimate effect of the position that Guidant has taken is to isolate hospitals that agree to such confidentiality provisions from any information regarding fair pricing for devices that are currently available in the marketplace. And, unfortunately, that will hurt the American healthcare system and its patients”

The Health Industry Group Purchasing Association (HIGPA) is a broad-based trade association that represents 31 purchasing organizations (Industry Members) and over 120 of their trading partners (Affiliate Members). HIGPA's group purchasing industry members include for-profit and not-for-profit corporations, purchasing groups, associations, multi-hospital systems and health care provider alliances. Trading partner members span the range of the supply system, including all types of manufacturers, as well as distributors, wholesalers, and organizations involved with e-commerce.

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