Group Purchasing Organizations & Ascent

Harnessing the collective bargaining of a GPO

A group purchasing organization (GPO) combines purchasing volume to achieve discounts. For more than 100 years, GPOs have been utilized in health care and many other industries, to aggregate purchasing volume in order to obtain discounts – lowering costs for patients and consumers through savings delivered to health plans and employers.

The U.S. Supreme Court has recognized GPOs can be pro-competitive. The FTC and DOJ have likewise acknowledged that health care GPOs can provide economic efficiencies that benefit payers and consumers.  

Health care organizations that use GPOs:

  • Community and retail pharmacies
  • Hospital systems
  • Nursing homes
  • Home health agencies
  • Pharmacy benefit managers (PBMs)
  • Drug device companies
  • Wholesalers

Many other industries leverage GPOs to lower costs for businesses and consumers — ranging from food service to manufacturing to legal to education and many more.

Ascent was created in response to rising drug inflation by drug manufacturers and to drive more value for participants and their clients

In 2019, in response to out-of-control drug price inflation by pharmaceutical manufacturers, Express Scripts and a co-founder launched a GPO called Ascent. It has several participants – PBMs, health plan and pharmacy participants – who work together and aggregate purchasing volume to negotiate greater savings from pharmaceutical manufacturers.

By creating a GPO, Ascent further aggregates purchasing volume of health plans and other entities to negotiate rebates for a greater number of consumers. 

Analyses show that GPOs save the health care system up to $55 billion annually1 and save health care providers an average of 10% – 18% on product and services2

1 Healthcare Supply Chain Association (HSCA), “A 2014 Update of Cost Savings and Marketplace Analysis of the Health Care Group Purchasing Industry,” July 17, 2014
2 Ibid.