It is the classic chicken-and-egg problem in healthcare contracting. You approach a GPO and they say you do not have enough market share. You approach hospital members and they say you do not have a GPO contract. So how do you break through when you need one to get the other?
In this episode, Dan Toomey explains how Regional Purchasing Coalitions and aggregation groups can provide the entry point that breaks the cycle.
The Market Share Catch-22
If you are new to a category or have limited market presence, you face a frustrating loop. Dan hears it constantly: "I have this problem. I go to get a GPO contract and what I'm hearing is I don't have enough market share. But then from the members of the GPOs, I can't get in because I don't have a GPO contract."
As Dan puts it, "It's a chicken or egg story. How do I gain market share without a contract?"
The answer is not to wait. There are alternative paths.
Regional Purchasing Coalitions: Your Entry Point
Regional Purchasing Coalitions (RPCs) and aggregation groups exist throughout the healthcare landscape. They are affiliated with GPOs but operate with more flexibility on timing and contracting.
Examples include systems and purchasing coalitions such as Yankee Alliance, Capstone, GNYHA, and Tenet, among others. Each one is different. Some focus on surgery centers. Others serve rural hospitals. Some cover pharmacy, veterinary, and DME. They reach different demographics and dynamics across their memberships.
What they have in common: they can collectively negotiate stronger tiers on a GPO level, source products not covered by national contracts, and bring value to members through education, clinical credits, and vendor engagement.
Critically for companies stuck in the market share catch-22, RPCs can do contracting on their own timetables. They are not locked into 18-month GPO bid cycles. "If they find that you have value, that you have clinical resources, great education, things they could really utilize, they can add you on if it makes sense," Dan explains. "They can add you midterm of a cycle. They could have open bids going that you could participate in."
How RPCs Build Your Case for National Contracts
When you perform well with an RPC membership, you build three things that matter when the national bid cycle opens:
Clinical awareness. Clinicians across the membership experience your product and can speak to its value.
Volume data. You now have documented sales that demonstrate market acceptance, the exact thing GPOs said you were missing.
Advocates. RPC leaders attend GPO meetings, committee votes, and clinical reviews. "If you're making an impact with that membership at that RPC level, they're going to speak up," Dan says. "They'll say, 'I use these guys and they're doing very well for us.' That'll go a long way on the next contract cycle."
Finding the Right RPCs
Start by understanding which RPCs align with your product and geography. Dan suggests several approaches: ask your GPO contacts directly, check GPO websites for affiliated regional groups, talk to your distribution partners who know which RPCs are active in specific markets, and consider working with advisors who have existing relationships and can accelerate introductions.
Not every RPC will be a fit. Match your product to their membership profile before investing time.
Who Should Lead the RPC Engagement?
This should be your national accounts director, not your field reps. RPC agreements often cover multiple states and many facilities. You need a single point of contact who can negotiate terms consistently, coordinate the launch across regions, and manage the relationship without stepping on rep territory.
Once the agreement is in place, the national accounts director can bring in the regional teams to execute. But negotiation and contract management belong at the strategic level.
Testing Strategies Before Going National
RPCs also offer a lower-risk environment to experiment before you commit to national terms. Test whether your tier structure is attractive and achievable. Try value-added programs like rebates, growth incentives, and early conversion bonuses. Validate whether your assumptions about clinical acceptance are correct.
It is much easier to adjust a regional agreement than to renegotiate a national contract mid-cycle.
Key Takeaways
- RPCs can break the market share catch-22. They offer a path to contract positioning when national GPOs require more volume.
- RPCs have contracting flexibility. They are not locked into 18-month GPO cycles and can add suppliers when they see value.
- Building volume with RPCs creates proof points. Sales data, clinical advocates, and references strengthen your next national bid.
- Match your product to RPC membership. Not every coalition fits your category. Do your research.
- National accounts should lead RPC engagement. These are multi-state agreements that need strategic coordination.
- Use RPCs to test your strategy. Pricing, rebates, and market fit can be validated before national commitment.