Magazine article Drug Topics

Electronic Catalogues Can Aid R.Ph.S with Contract Pricing

Magazine article Drug Topics

Electronic Catalogues Can Aid R.Ph.S with Contract Pricing

Article excerpt

The current pharmaceutical contract-pricing process is often described by hospital pharmacists, wholesalers, group purchasing organizations (GPOs), and pharmaceutical executives as costly and complex. More than a few industry experts cite inconsistencies in the flow of pricing data among manufacturers, wholesalers, health providers, and GPOs.

But all that could change soon if a New England-based data services company has anything to say about it. GreenPages Data Services of Kittery, Maine, is developing an electronic commerce solution called the Contract Pricing Network (CPN). GreenPages plans to roll out CPN in the fourth quarter of 1998.

CPN would provide contract-pricing information in the form of databases, that is, electronic catalogues that would be distributed within a closed-loop process connecting various trading partners.

Philip Scott, GreenPage's v.p. of sales and marketing, said that CPN is an "Extranet" solution that will provide a virtual private network utilizing the infrastructure of the Internet as its backbone. For example, a hospital pharmacy department could be connected to a GPO through a secure communications link via modem to ensure security and access time, he explained.

Contract information would be distributed across the system and appear on each entity's computer simultaneously. Scott said that CPN will eliminate a lot of misinformation that emanates from time lags and the rancor that can occur from different interpretations of specific contract-pricing terms and conditions. In addition, GreenPage executives expect CPN to address problems associated with contract pricing, including the costly issue of chargebacks.

One of the primary drivers behind the initiative, said Scott, is industry discontent with the current system, in which health providers use their purchasing power to negotiate special discounts with manufacturers through GPOs. As a result, an extensive and complex contract-pricing process was created, with inconsistencies in the flow of pricing data among all the various players.

Scott said that there is no central place where information can be stored in a data repository with an audit trail. "Nothing like that exists right now," he noted. "The fact that a large portion is still being done through faxes and through paper has led to a situation in which everybody has his own internal proprietary system, and none of them speaks to the others. …

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