Group Purchasing Organizations and Antitrust Law: Recent Developments

January 20, 2011
Throughout the United States, hospitals rely on group purchasing organizations (GPOs) for procurement of both basic supplies such and complex medical devices. While U.S. hospitals make up to 70% of their purchases through GPOs in order to benefit from lower product prices and reduced administrative costs associated with procurement personnel and infrastructure, GPOs have recently come under government scrutiny because GPO compensation arrangements may in fact lead to higher supplier prices, potentially leading to supplier monopoly or market power. This article provides an overview of these recent developments as well as the impact that legal and regulatory oversight may have on hospitals as customers, on medical device manufacturers as suppliers and on the healthcare sector as a whole.