Grouping purchasing organizations and ascent

Harnessing the collective bargaining of a GPO.

A group purchasing organization (GPO) combines purchasing volume to achieve discounts

For more than 100 years, GPOs have been utilized in health care and many other industries, to aggregate purchasing volume to obtain discounts—lowering costs for patients and consumers through savings delivered to health plans and employers.

The U.S. Supreme Court has recognized that GPOs have pro-competitive potential. The FTC and DOJ have likewise acknowledged that health care GPOs can provide economic efficiencies that can benefit payers and consumers.

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Health care organizations that use GPOs:

Community and retail pharmacies

Hospital systems

Nursing homes

Home health agencies

Pharmacy benefit managers (PBMs)

Drug device companies

Wholesalers

Two medical professionals wearing scrubs walk and talk together

Ascent delivers more value

In 2019, in response to out-of-control drug price inflation by pharmaceutical manufacturers, Express Scripts and a co-founder launched a GPO called Ascent Health Services. Since then, it has grown to include several participants. 

On behalf of its participants, Ascent negotiates with pharmaceutical manufacturers to achieve deeper rebates to make prescription medicines more affordable. 

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Analyses show that GPOs save the health care system up to $55 billion annually1 and save health care providers an average of 10% – 18% on product and services2 

Sources

  1. Healthcare Supply Chain Association (HSCA), “A 2014 Update of Cost Savings and Marketplace Analysis of the Health Care Group Purchasing Industry,” July 17, 2014
  2. Ibid.