Some experts say Medtronic's recent move to terminate five contracts with Novation could possibly indicate a trend in medical device companies turning away business agreements with group purchasing organizations, according to a MassDevice news report.
In late February, Medtronic cancelled five contracts with healthcare supply contracting company Novation, which is owned by VHA and the University HealthSystem Consortium. Medtronic said the contracts with Novation, which covered cardiovascular and orthopedic products, were cancelled so that the company could manage their business relationships with hospitals locally, rather than through a national GPO contract.
Because the move makes financial sense for the medical device company, William Blair analyst Ben Andrew said other medical device companies may follow suit in efforts to stay financially viable. In conjunction with a painfully slow economic turnaround, device companies also face a 2.3 percent annual excise tax from healthcare reform, according to the report.
Read the news report about medical device companies and group purchasing organizations.
Read other coverage about medical device companies:
- MAKO Surgical Posts 4Q Revenue of $14.8M, 67% Increase
- Exactech Announces 4Q Revenue of $51.8M, 7% Increase
- TranS1 Reports 4Q Revenue of $5.9M, 6% Decrease
In late February, Medtronic cancelled five contracts with healthcare supply contracting company Novation, which is owned by VHA and the University HealthSystem Consortium. Medtronic said the contracts with Novation, which covered cardiovascular and orthopedic products, were cancelled so that the company could manage their business relationships with hospitals locally, rather than through a national GPO contract.
Because the move makes financial sense for the medical device company, William Blair analyst Ben Andrew said other medical device companies may follow suit in efforts to stay financially viable. In conjunction with a painfully slow economic turnaround, device companies also face a 2.3 percent annual excise tax from healthcare reform, according to the report.
Read the news report about medical device companies and group purchasing organizations.
Read other coverage about medical device companies:
- MAKO Surgical Posts 4Q Revenue of $14.8M, 67% Increase
- Exactech Announces 4Q Revenue of $51.8M, 7% Increase
- TranS1 Reports 4Q Revenue of $5.9M, 6% Decrease