Price is a key element of a new five-year, $500 million contract between AmeriNet and Bracco Diagnostics, which is expected to save AmeriNet members $20 million to $25 million.
But the contract for contrast media also includes many value-added services. Most notable is a plan by Bracco and AmeriNet to jointly fund information systems to help physicians with clinical decisions.
In the long run, information systems will show which imaging modalities are the quickest way to a diagnosis, said John Cornille, Bracco Diagnostics president. Initially, Bracco will help AmeriNet members track patient satisfaction and product utilization.
"Rather than just compete on price, we've agreed to work with AmeriNet to drive unnecessary costs out of procedures," Cornille said. "We're out to be No. 1 in the U.S. market and around the world, and we don't think it is in anybody's best interest to simply buy (market) share by dropping price continuously."
Bracco is a leading maker of contrast media, which is injected into patients to make internal organs more visible in diagnostic procedures. The company, which has U.S. headquarters in Princeton, N.J., is privately owned and doesn't disclose revenues.
It is one of the losers in a recent, high-profile award by Premier. Mallinckrodt Group and Berlex Laboratories won a five-year contract with Premier after offering prices reported to be significantly below market standards.
In return, the companies will get at least 70% of Premier hospitals' contrast media purchases, or $190 million annually, according to the contract (May 20, p. 26).
Cornille said "it remains to be seen" whether Bracco will lose significant business as Premier hospitals convert to the contract. The company's contract with AmeriNet "is really a response to AmeriNet, more than being a response to Premier."
AmeriNet used to contract with Mallinckrodt, but the company wouldn't offer it similar prices to Premier, said Bud Bowen, AmeriNet executive vice president.
"When they contracted with Premier, we were very happy with them, but we expected them to keep us in the same position," Bowen said. "Our members deserved to get (prices as good) as anyone in the country, and we began to look for other partners."
AmeriNet represents about 1,650 hospitals and a projected $3.2 billion in 1996 contract purchases, Bowen said.