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Stronger position of hospitals and insurers when buying drugs

Purchasing agents of hospitals and health insurers can increase their clout by collectively purchasing prescription drugs for specialist medical care more often. If they do so, the Netherlands Authority for Consumers and Markets (ACM) believes that they are able to negotiate lower drug prices and better conditions. The competition rules offer room for collective procurement. This is one of the conclusions that ACM draws following the publication of its ‘Guidelines on collective procurement of prescription drugs for specialist medical care.’

More effective procurement

With these guidelines, ACM wishes to clarify to purchasing agents what they can and cannot do collectively. Collective procurement is possible in different configurations such as two or more hospitals, but also with one or more health insurers. The goal is to give market initiatives a boost, thereby strengthening the position of the purchasing agents on the drugs market vis-à-vis the pharmaceutical companies.

Chris Fonteijn, Chairman of the Board of ACM, explains: “Drugs could become cheaper if purchasing agents of hospitals and health insurers took a stand in their negotiations with pharmaceutical companies. Patients and insured could subsequently benefit in the form of improved health care or lower premiums.”

Rules of thumbs for collective procurement

The guidelines explain what opportunities the competition rules offer, and what limits they set if hospitals or health insurers purchase drugs collectively. ACM list three rules of thumb in the guidelines. If purchasing agents follow these rules of thumb, ACM does not expect to see any problems for competition, which means the collective-procurement arrangement is allowed.

  • Rule of thumb 1: The total costs of the drugs purchased collectively cannot comprise more than a limited share of the hospital costs.
  • Rule of thumb 2: Other buyers must be able to join any group purchasing organization (or joint purchasing organization).
  • Rule of thumb 3: It must be easy to leave a group purchasing organization (or joint purchasing organization).

ACM has published a draft version of these guidelines. Interested parties have the opportunity to submit their comments until May 27. After that deadline, ACM will make the guidelines final.

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