The worst-kept secret among group purchasing organizations is that Mike Wallace of "60 Minutes" has been asking questions about whether committed buying programs freeze out small vendors marketing new technologies.
The long-running debate on such programs took center stage at 8: 45 a.m. on Oct. 6 when Wallace and camera crew crashed a seminar on safe needle legislation sponsored by the New Jersey Hospital Association, according to spokeswoman Kerry McKean Kelly.
Kelly guesses that Wallace was alerted to the opportunity by Retractable Technologies, a small but feisty safety needle manufacturer that has sparked controversy over GPOs and their role in helping or hampering the development of safe needle technology.
"So what we had intended merely to be a helpful education session for our members became quite a circus," Kelly says.
RTI, which developed its safety needles with the help of a National Institutes of Health grant, contends that the exclusive purchasing contracts negotiated by GPOs on behalf of their hospital members is preying on smaller companies like itself.
In 1998, the Little Elm, Texas-based company filed a lawsuit in District Court, Brazoria County, Texas, against three local hospitals, the Irving, Texas-based hospital alliance VHA and two needle manufacturers--Tyco International and BD. San Diego-based Premier hospital alliance and its group purchasing arm, Premier Purchasing Partners, were added as defendants earlier this year. RTI charges the defendants with contracting among themselves and others to the detriment of RTI and its technology.
Wallace showed up at the seminar asking questions about why RTI was not allowed to exhibit its safety needles at the seminar when another, bigger company did have a display. Kelly told the veteran TV news reporter that the seminar was not a trade show and so wasn't intended to showcase products, and that giant needle manufacturer BD, based in Franklin Lakes, N.J., was allowed to display some brochures at the seminar because it had contributed $2,500 to be a sponsor of the event.
RTI representatives were told they could come as participants, and they did.
Also in response to Wallace's questions, Kelly explained the hospital association markets a portfolio developed by Irving, Texas-based Novation, but it's a strictly voluntary purchasing program. Hospitals that don't choose to purchase goods under their contracts "are free to use anyone they want, and Retractable likewise is free to make sales calls on our hospitals and do old-fashioned legwork," Kelly says.
Rumors of a "60 Minutes" investigation have been circulating since last summer. In fact, the news show's silence in the wake of the rumors was so deafening that San Diego-based Premier made a pre-emptive strike.
"Premier contacted `60 Minutes' to present its policies and practices," spokeswoman Pat Poston says. "They told us they were interested in the impact of group purchasing on new technologies with an emphasis on safety devices."
Poston notes that Premier offers its 1,850 members contracts for five different kinds of safety syringes with four different companies, including RTI.
Phillip Zweig, a spokesman for RTI, acknowledges he attended the seminar but declined to comment further.