Interaction with contracts outside of pharmacy
Non-pharmacy contracts, non-Premier contracts
What is it?
Non-pharmacy contracts are available for a variety of items that are used in the Pharmacy. These may be Premier contracts or they may be hospital-negotiated contracts. Examples include IV sets, IV solutions, syringes for the IV room, paper and other office supplies, and a variety of other items.
Why is it important to the pharmacy or buyer?
It is important for the buyer to realize that a Premier member hospital receives a financial incentive when accessing Premier contracts in the form of a rebate at the end of the year. This incentive is from administrative fees paid by suppliers. The rebate on the administrative fees is not reflected in the price paid for the product.
The returned administration fees to your facility may be substantial and are an additional incentive to purchase Premier offered contracts whenever possible.
One of the significant ways to assess buyer performance is through the analysis of off contract and on contract spend percentages.
Why is it important to the hospital?
- The hospital has a significant incentive to drive purchases toward a high percent of on-contract spend.
- If there is not a Premier contract for an item offered, the hospital may negotiate a local contract that will still provide a discounted price or rebate.
- If the hospital is part of an integrated health system, there may be system contracts of which the buyer should be aware. These contracts are intended to aggregate volume into one contract so that all of the hospitals within a system get a system price or rebate advantage for driving system market share in a particular drug or therapeutic category.