Novation may have been jilted by Medtronic (NYSE:MDT) in February, but the group purchasing organization hasn’t let any grass grow under its feet in its search for new partners.
The Irving, Texas-based GPO said it signed a two-and-a-half-year deal with German cardiac rhythm device maker Biotronik, hard on the heels of inking another 30-month pact with St. Jude Medical (NYSE:STJ) (also for CRM products).
Medtronic made headlines — and pleased Wall Street — when it canceled several contracts for its cardiovascular and orthopedic products with Novation worth an estimated $2 billion a year. A few weeks later the Fridley, Minn.-based medical device giant spiked a deal with Premier Inc. for some of its spine products.
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After the Premier deal ended, Medtronic spokesman Chris Garland told MassDevice in an email that the decision to end both deals were made because the company felt it would do better negotiating contracts directly with hospitals.
“Our only comment is that we are confirming that our spinal business terminated a national contract with Premier,” Garland wrote. “We did this for the same reasons we terminated five Novation contracts earlier.”
Last month, Medtronic CFO Gary Ellis told analysts that spiking the deals wasn’t a strut in a larger strategic plan.
“There’s a lot of speculation around here that a strategic change is going on,” Ellis told analysts at the Barclay’s Capital Investors Conference in Miami. “That is not the case.”
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GPOs play a significant role in the delivery of healthcare, Ellis noted, and they’re beneficial in streamlining the process of selling into hospital systems.
“We intend to maintain our relationships with GPOs that are providing a benefit,” he said.
Garland also told us that the company’s move to combine its cardiac and vascular groups’ sales forces into a single cross-divisional organization is part of its move to deal directly with hospital purchasing administrators.
The Massachusetts Medical Devices Journal is the online journal of the medical devices industry in the Commonwealth and New England, providing day-to-day coverage of the devices that save lives, the people behind them, and the burgeoning trends and developments within the industry.
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