Has the Time Come to Rethink Your GPO?

Today there are more than two dozen active GPOs. This large number provides pharmacy owners with more options than ever before. Now they can shop around and find a group that meets their unique needs.

by Bruce Kneeland

In the mid-1980s several savvy pharmacy owners started organizing themselves into buying groups. These corporations successfully negotiated for better purchasing contracts from wholesalers and saw rapid growth. In the beginning many wholesalers viewed these groups with suspicion as they ate away at their margins. But as the groups grew, and the number of wholesalers shrank, the wholesalers recognized that by partnering with groups they could pick up new accounts.

As the GPO (group purchasing organization) industry matured, many of them saw the need to expand beyond purchasing. They started to provide business training and marketing support, and even run trade shows of their own. Some of them hired experts in legislative and regulatory affairs and contracted with lobbyists to help fend off the negative effects of government regulation or fight PBMs (pharmacy benefit managers). A few groups opened warehouses to further provide savings for their members.