Premier quickly moved last week to douse another flare-up in the smoldering scrutiny of its hospital group purchasing practices as it revealed that it had been subpoenaed by HHS' inspector general's office.
Premier officials said the subpoena sought information relating to three former and current contractors: Express Scripts, Horizon Medical Products and American Pharmaceutical Partners. The inspector general's office confirmed that it served subpoenas on San Diego-based Premier and the same three vendors but would not comment on the nature of the subpoenas or the investigations, said Donald White, a spokesman.
"Premier will be reviewing the subpoena and preparing to respond to the request fully and promptly," Pat Poston, senior vice president, said in a written statement.
Pharmacy benefits manager Express Scripts, St. Louis, said the subpoena it received had requested information on stock options, warrants and other payments the company gave to Richard Norling, chairman and chief executive officer of Premier, or other Premier employees. Premier said the subpoena it received requested similar information.
Express Scripts, which has a longstanding contract with Premier to provide services to its 1,600 hospital members, said Norling served on its board from March 1992 until May 2001-before and after his hiring at Premier in 1997. Norling received Express Script stock options as part of its board compensation program and disclosed it to the Premier board when he was hired, Poston said. While concurrently serving on Premier's board, he recused himself from all negotiations involving Express Scripts, she said.
Premier and Express Scripts both said they were not aware of any other Premier employees receiving equity or items of value from the company. Express Scripts also said it was confident that its relationship with Norling and Premier was appropriate and that all was disclosed in its filings with the Securities and Exchange Commission.
The inspector general's interest creates a new wrinkle in the group purchasing industry's defense of its practices. In its workplan for fiscal 2002, which came out last October, the inspector general's office said it planned to review payments that some GPOs receive from vendors to evaluate whether the industry is satisfying the requirements under a safe harbor that exempts such payments from being considered kickbacks. Officials at Novation, the joint GPO for VHA and University HealthSystem Consortium, said they have not received any such subpoenas.
The subpoenas arrived one week after Premier and Novation reached separate accords with the Senate Judiciary antitrust subcommittee, which has been looking into group purchasing business practices.