Exposing GPOs

​        & PBMs

GPOs and the Fungal Meningitis Tragedy.

In late September 2012, an epidemiologist at Tennessee's Department of Health and an infectious disease specialist at Vanderbilt University, in running tests on specimens from a seriously ill patient,  made a horrific discovery. They found that the patient had a rare, potentially deadly infection called fungal meningitis. On further investigation, they were able to trace the infection to a contaminated generic drug called methylprednisolone acetate, which doctors inject in the spine to treat severe pain. The source: a so-called compounding pharmacy in Framingham, Massachusetts called The New England Compounding Center, which had managed to circumvent stringent FDA regulation and oversight.  

St. Thomas Hospital in Nashville soon emerged as the epicenter in a national epidemic that by October 23, 2013 would claim the lives of 64 Americans and sicken 751 more, according to the Centers for Disease Control and Prevention. For more information, click HERE.

Sales of the NECC drug took off after Sandoz, the only remaining FDA regulated company that manufactured a generic version of the drug, exited that market earlier in the year, creating a shortage. Teva Pharmaceuticals had ceased production in 2010. That left Pfizer as the only maker of the drug that was subject to the FDA's strict requirements. But Pfizer made a branded version that sold for $40 to $46 per vial, almost twice the price of the NECC product. 

With patients desperate for the pain medication, GPOs steered their member hospitals and outpatient clinics to NECC, whose sister company, Ameridose, had contracts with at least five of the largest GPOs: MedAssets, Novation, Premier, HealthTrust, and Amerinet. 

The Government Accountability Office is investigating the role of hospital group purchasing organizations in creating the shortages that forced unsuspecting hospitals and outpatient clinics to turn to NECC, and in facilitating the purchase of the drug by their members. Click HERE for Nov. 15, 2012 letter from then-Rep. Ed Markey (D-MA) and five senior House colleagues requesting the investigation. The GAO report is expected to be released this fall.

Although investigators apparently have not yet revealed possible linkages between individual victims and  orders placed with NECC for the drug through specific GPO contracts, the contractual relationships between Ameridose and the five largest GPOs are well-documented: 

MedAssets Ameridose Contract



Ameridose, LLC vs. Novation LLC

United States District Court Boston MA

Aug. 8, 2012


Premier Vendor List 

Jan. 2012


"Ameridose Announces Agreement with HealthTrust"

Press release, June 5, 2012


Amerinet Supplier Awards

(Ameridose in "100% club")


Articles on Fungal Meningitis Outbreak

"Meningitis Outbreak: Lawmakers Question Drug Purchasing Groups"
Tennessean, Nov. 24, 2012

"Buying Groups' Role in Drug Shortages Queried"
MedPageToday, Nov. 16, 2012,


"Drug Shortages Spark Use of Compounders"
MedPageToday.com, Oct. 18, 2012

"Lapses at Big Drug Factories Add to Shortages and Danger"
The New York Times, Oct. 18, 2012

"Anesthesiologists Frustrated Over Continued Drug Shortage"
Medscape.com, Oct. 17, 2012

"Scant Oversight of Drug Maker in Fatal Meningitis Outbreak"
The New York Times, Oct. 6, 2012

"In a Drug Linked to a Deadly Meningitis Outbreak, A Question of Oversight"

The New York Times, Oct. 4, 2012

"Presentation on Fungal Meningitis Outbreak  to the 66th Annual Post Graduate Assembly in Anesthesiology"
J. Todd Weber MD
Centers for Disease Control and Prevention
Dec. 16, 2012