Can Private Labeling Really Help Me Gain a GPO Contract Position?

What if there was a GPO contracting strategy that could grow your market share, help you win contracts even when you lose the bid, and position you as a strategic partner rather than just another vendor?

Private labeling with GPOs is one of the most overlooked strategies in healthcare contracting. In this episode, Dan Toomey breaks down how it works, when it makes sense, and how to approach it.

Two Company Philosophies

Dan has seen both sides of the private label decision across his career, and companies tend to fall into one of two camps.

"One was: our brand is our brand and we're going to protect it at all cost. We don't want a private label. Why would we give up our name? Why would we give up a flagship product? We're going to own our name."

The other approach: "If I don't make it, someone else will. So I will private label and make products for everybody."

Neither philosophy is wrong. But the second one opens doors that many companies never consider. When you manufacture for others, you build supply chain capacity, gain market access through additional channels, and, critically, your actual market footprint grows far beyond what your brand alone represents.

"When it comes down to that RFI, RFP process and they're asking about market share and you've done private labeling for other companies, your market share is actually much bigger," Dan explains. "You don't have to look at it from just your brand. You can look at it from where your product or technology is. You don't have to divulge who, but you know what your market share is."

The GPO Private Label Programs

Each major GPO has a private label brand:

HealthTrust has Regard. Vizient has Novaplus. Premier has S2S Global (PremierPro).

Each operates differently. With Vizient, Dan explains, "you get the national first and then you support it with co-branded Novaplus. They don't always do a full-fledged just Novaplus, but usually it's co-branded: your logo and their logo." With Premier and S2S, "you would completely private label it as Premier Pro or the S2S brand, their logo, and you would just be behind the scenes."

Three Ways Private Labeling Creates Contract Opportunities

Scenario 1: Win your national contract plus private label

You bid on the national and win. Simultaneously, you have been working with the GPO's private label team. Both launch together. Now you have your brand on contract and the GPO's brand on contract, with the GPO actively supporting both because they have a vested interest.

Scenario 2: Lose the bid, win through private label

You do not win the national contract award. But the GPO's private label team likes your product. They offer to source it under their brand. "Now you get on the contract with their brand. It's your product and you could be the commercial strategy for that product," Dan says. "You still get to go out and sell it. You still get to say you have a contract, but it's through the GPO."

Scenario 3: Skip national, go straight to private label

You decide not to pursue a national contract at all. Instead, you work exclusively with the private label team. They win the category award using your product under their brand. You provide commercial support, clinical education, and supply chain reliability. They handle marketing and member communication.

What GPOs Look For in Private Label Partners

The GPOs want products that are reliable: "the last thing they want is to have a product that goes on back order of their own brand." They want something that is clinically acceptable and easy to convert. Commodity products, PPE, and standard clinical supplies are common fits.

Dan's filter: "Think about things that are easy to insert and easy to sell or easy to switch out. You don't want something that you need a whole crew spending weeks converting over."

The economics work like any distribution agreement. You sell the product to the GPO at a negotiated price. They mark it up and sell it to members under their brand. They pay the GPO fees since it is their contract. "It's not going to be like your 3% fees on the GPO," Dan notes. "It's going to be more like a true distribution agreement. There's a profitability for them to make on this."

Working Both Teams Simultaneously

The private label team and the national contract team are usually separate within a GPO. But they talk.

Dan recommends being explicit about your dual engagement: "You would make it very clear with the sourcing team, 'Hey, we're working with the private label team to make this happen too. In order for your GPO to get the bigger value, we need to be here.' You're building the blocks of: it's not just a bid you dropped on their lap. You're strategically trying to position yourself to help your GPO explore and do better on this contract."

The private label team's enthusiasm about your product can positively influence how the sourcing team views your national bid.