A broken system is making it harder for hospitals and patients to access life-saving drugs. On "60 Minutes," former heads of a generic drug company and Vizient — a Group Purchasing Organization (GPO) — discussed how the healthcare purchasing system involving GPOs is too complicated and too broken. As one of them stated, the system is designed purposefully for a lack of transparency.
Group Purchasing Organizations were created to aggregate the buying power of hospitals, clinics, and health systems. In theory, this should drive lower prices. In practice, the incentive structure — particularly the administrative fees paid by vendors to GPOs — creates a system where the GPO's financial interests are aligned with the vendor, not the healthcare organization they claim to represent.
This misalignment has real consequences: drug shortages, inflated costs, and diminished access to generics. The same dynamics that affect pharmaceutical procurement appear in technology procurement — and the lesson is the same: organizations need independent, conflict-free advisors who are paid only by their clients.
"The system is designed purposefully for a lack of transparency." — Former Vizient Executive, CBS 60 Minutes
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