Third party bargaining and contract terms: a link over time?
OBJECTIVE
To evaluate whether prior pharmacy bargaining process strategies and pharmacy dependence on third parties affect the bargaining power of pharmacies in price negotiations with third parties.


METHODS
One-time survey.


METHODS
Random sample of 900 independent and small chain pharmacies in nine states: Colorado, Connecticut, Georgia, Kentucky, Minnesota, Oklahoma, Oregon, Pennsylvania, and Wisconsin.


METHODS
Two hundred sixteen of the returned surveys contained sufficient responses for this analysis.


METHODS
Survey data on pharmacy bargaining power and prior pharmacy bargaining strategies, pharmacy dependence, and market characteristics were analyzed using multiple regression in a previously developed and modified provider/third party bargaining model.


METHODS
Pharmacy bargaining power.


RESULTS
Pharmacy bargaining power varied across our sample. Pharmacy bargaining power was positively related to whether a pharmacy previously bargained with the third parties, negatively related to prior requests for contract changes, and negatively related to the pharmacy's dependence on third parties in total.


CONCLUSIONS
Pharmacy bargaining power is related to the bargaining strategies employed by pharmacies during the previous year and the dependence of pharmacies on third party payers in total. With the prevalence of "take-it-or-leave-it" contracts from third parties, prior pharmacy bargaining behavior may affect the initial terms of the contracts that pharmacies are offered.
Brooks
John M
JM
College of Pharmacy, University of Iowa, Iowa City 52242, USA. john-brooks@uiowa.edu
Doucette
William R
WR
Sorofman
Bernard A
BA
D000465:Algorithms; D004345:Drug Industry; D007750:Labor Unions; D018803:Models, Economic; D010594:Pharmacies / Q000191:economics*; D010605:Pharmacy Administration / Q000191:economics*; D014481:United States