SOURCE: Novation

November 14, 2005 13:19 ET

Novation Adds 24 Hospitals to Pharmacy Program

IRVING, TX -- (MARKET WIRE) -- November 14, 2005 -- Novation, the contracting arm of VHA Inc. and the University HealthSystem Consortium, has added 24 hospitals to its pharmacy program, following an intensive effort to recruit VHA and UHC members to participate in the program.

"Hospitals participate in our programs voluntarily," said Chuck Reinders, a registered pharmacist and director of pharmacy program development at Novation. "We elevated our marketing efforts to educate hospitals about the value that's available; we know the program can be a significant source of savings for members."

Nineteen VHA members and five UHC members have signed up as new participants this year. Currently, 82 percent of VHA hospitals and 77 percent of UHC hospitals participate in the Novation pharmacy program. These participating hospitals voluntarily purchase more than 90 percent of their pharmaceuticals through Novation products contracts and Novation pharmacy distribution agreements. VHA and UHC members will use Novation pharmacy contracts to purchase more than $10 billion worth of pharmaceuticals in 2005.

Analyses indicate that these hospitals will save between three percent to six percent on contracted products through Novation. Price savings through the product contracts and distribution agreements are only part of the value equation, Reinders explained. Novation also provides members with therapeutic and clinical information, as well as on-line supply chain management tools that enable hospitals to identify opportunities to save and maximize the benefits of the Novation Pharmacy Contract Portfolio.

Steve Gauthier, regional director of material services and contracting at 250-bed Central Maine Medical Center in Lewiston, Maine, stated that Novation has given his organization new tools and better pricing to help it operate more efficiently and save money. Specifically, Gauthier noted that the online pharmacy management tools are helping the hospital save an additional one percent to two percent on its $8 million annual pharmacy budget. Additionally, he says the organization will benefit from higher quarterly returns it will receive from VHA because of the participation in the Novation pharmacy contract portfolio.

Gauthier said the conversion process took less than 60 days thanks to the excellent local and national support provided by Novation and VHA. "It was a wonderful process with very few hitches," he said.

About Novation

Based in Irving, Texas, Novation was established in January 1998 through a combination of the supply programs of VHA and UHC, two national health care alliances. Novation serves the purchasing needs of more than 2,500 members and affiliates of VHA and UHC. These organizations used Novation contracts to purchase more than $23 billion in drugs, supplies and devices in 2004.

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