Background:
GPOs(group purchasing organizations) were established to increase efficiency for member hospitals. Instead of each hospital signing its own contracts with multiple different pharmaceutical companies, GPOs deal with the pharmaceutical companies and the hospitals only have to deal with GPOs. So GPOs can drive down prices by buying in bulk. The concept behind GPOs is laudable – small, independently run businesses can combine their purchasing power to negotiate better discounts traditionally only available large quantity.
Medbuy and HealthPRO are two largest GPOs in Ontario. Both organizations are governed by their member organizations, which are mainly hospitals and other health care providers. HealthPro, which buys medications in bulk for 255 hospitals and health authorities, and MedBuy, which purchases drugs for 30 health agencies .So far those organizations not only source products for Pharmacy, but also for other areas like clinical services, nutrition. Currently hospitals in Ontario purchase most of their drugs trough them.

Benefits
There are many advantages for individual buying though from GPOs, one of the major advantages is the ability to provide a lower cost solution. By leveraging the buying power of members of GPOs, the consortium is able to combine the amount of products to gain these critical discounts, which in turn provides the best price to each individual participant. Vendors are willing to extend discounts and additional service levels to the GPOs to gain access to their large networks of buyers. This allows vendors to reduce their sales cycle and have a good forward view into demand - greatly impacting successful production and supply chain management.
Other benefits for buying from GPOs may include as following:
• Comprehensive sourcing strategies
• In-house contracting/clinical expertise
• Advanced procurement