Departing from traditional contracting practices that favor dominant vendors, group purchasing organization Novation awarded 17 separate contracts to six vendors for a variety of surgical technologies. Members of VHA and University HealthSystem Consortium, the GPO's sponsors, purchase $900 million worth of goods annually in the specified product categories, although not always through Novation contracts. The three-year contracts, which take effect April 1, are for products that historically have been bundled together, such as suture and endomechanicals. Notably missing from the suture contract is Johnson & Johnson's Ethicon, although the company did win a contract for other supplies including topical skin closure products.
GPOs, particularly industry giant Novation, have been criticized in recent years for contracting practices that favor large manufacturers and impede small companies from marketing innovative new technologies. "Novation's approach to these product categories will significantly change market dynamics for these surgical products, enabling members to more readily access new technology," said Eldon Petersen, group senior vice president at Novation. Officials said the contracts were awarded based on a public competitive bid process, member surveys and the recommendations of a task force that included clinicians and purchasing executives from member hospitals. -- by Cinda Becker