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May 23, 2006
For Immediate Release
Media Contact: Lisa Cheers
Marketing, HIGPA
(312) 673-5792
lcheers@smithbucklin.com

On the eve of a jury trial that was to determine damages, a settlement was reached in the case between Aspen Healthcare Metrics and Guidant Sales Corporation regarding pricing confidentiality.

Though terms of the settlement in this case are sealed, the Health Industry Group Purchasing Association (HIGPA) remains steadfast in its concern over any event or action that could potentially disrupt the present supply chain which enables GPOs and like organizations to help hospitals effectively manage their costs. HIGPA Chairman, Al LoBiondo, responded today to the settlement. “Though the particular terms of the Aspen-Guidant settlement are confidential, HIGPA and its members remain steadfast in our strong support for the greatest possible pricing transparency within the industry.” LoBiondo goes on to say, “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. HIGPA will continue to monitor the effects this case has on the industry.”

On February 2, 2006, the Minneapolis court ruled that Aspen had wrongfully induced hospitals to breach certain obligations of confidentiality. 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.

LoBiondo reiterated that: “The ultimate effect of the Minneapolis court ruling 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 30 purchasing organizations (Industry Members) and over 120 of their trading partners (Affiliates). 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 partners 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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