Criticism of GPOs has jumped the shark

When does criticism become parody? The classic television show Happy Days provides some guidance on this question.

The phrase “jump the shark” has come to signify the moment when a television program declines beyond recovery. The phrase originated from an episode of Happy Days whose plot saw a waterskiing Fonzie, wearing a swimsuit and a life-preserver over his signature leather jacket, jump over an obviously mechanical shark.

More broadly, the phrase “jump the shark” has come to signify the moment when something moves beyond relevance. Jumping the shark is now synonymous with going too far.

Criticism of the GPO industry has now reached its “jump the shark” moment.

Fringe elements within the medical device community have waged a decade-long legislative campaign against GPOs, during which they have tried to generate negative headlines and undue scrutiny of GPOs by attempting to link the industry to virtually every emergent healthcare crisis.

Most recently, this campaign has included an attempt to link GPOs to critical drug shortages and even a recent meningitis outbreak. As proof, these fringe elements offer the work of a paid medical device industry consultant and “expert” who has implicated GPOs in everything from the rise of the AIDS virus to the murder of two U.S. attorneys, and has accused two sitting U.S. senators of conspiring to cover up widespread corruption.

What could GPOs possibly have to do with drug shortages and meningitis? Nothing, of course. The true cause of drug shortages is manufacturing problems, disruptions and barriers to entry in getting new suppliers on line when there is a disruption in supply. Drug manufacturers themselves have weighed in and said that GPOs have nothing to do with drug shortages.

GPOs are taking a variety of creative and innovative steps to reduce drug shortages. All GPO contracts are voluntary and a product of competitive market negotiations between sophisticated parties. All hospitals can purchase off contract and often do. Contracts can be and are cancelled, and pricing regularly adjusted. Manufacturers regularly and quickly adjust pricing of GPO contracts when they experience shocks to production.

Hospitals use GPOs to aggregate their purchasing power. GPOs do not manufacture, compound, sell, or take title to these drugs or any drugs in shortage. Our industry has every incentive to ensure that patients get the medications they need when they need them. If there is no product, there is no role for the GPO. GPOs do not have the ability – nor would it be in our interest – to force manufacturers into contracts that undermine their ability to deliver product. In fact, GPOs work vigorously with hospitals, manufacturers and distributors to help maintain a safe and reliable supply of products for healthcare providers.

All independent, empirical, and non-industry analyses of GPOs have found that GPOs deliver billions in cost savings every year to the healthcare delivery system. GPOs deliver the best products at the best value to their hospital, long-term care and healthcare provider partners, and GPO cost savings, administrative structure and business practices have all been thoroughly reviewed by the GAO, DOJ, FTC, the U.S. Supreme Court, the 8th Circuit Court of Appeals, academia and virtually all of America’s 5,000+ hospitals.

Even in the face of this overwhelming evidence, there are those on the fringe of the medical device community who will continue to say anything about GPOs simply to give the appearance of impropriety. However, with their latest accusations, they have gone too far and relegated themselves to irrelevance. They have simply jumped the shark.


Curtis Rooney is president of the Healthcare Supply Chain Association, www.supplychainassociation.org.

Curtis Rooney About Curtis Rooney

Curtis Rooney is president of the Healthcare Supply Chain Association, www.supplychainassociation.org

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