Table of Contents
If you’re searching for fresh ways to expand your market reach—especially in the consumer health category—you’re in luck. The healthcare landscape is shifting faster than a Google search turns into an ad takeover of your social media feed, and this shake-up has opened up some unexpected opportunities. Two avenues that should be on your radar? Group Purchasing Organizations (GPOs) and Medicare Advantage (MA) plans.
I get it—these might not be the first buzzwords that come to mind when you think "exciting growth opportunities." But trust me, these areas are like hidden gold mines for boosting incremental revenues for OTC and medical device suppliers. Let’s dive in.
GPOs: The Buying Powerhouses You Didn't Know You Needed
Group Purchasing Organizations—GPOs for short—are the unsung heroes controlling over 70% of healthcare spending in the U.S. These giants pool the purchasing power of hospitals, pharmacies, and healthcare providers to negotiate exceptional deals and keep supply chains humming. For OTC and medical device suppliers, partnering with a GPO isn’t just smart—it’s transformative. Why team up with a GPO?
· Access to a wider customer base. Imagine plugging into a network so vast that it makes Amazon’s distribution look quaint. GPOs connect you to thousands of healthcare providers, giving you a single point of entry to markets you’d struggle to penetrate alone.
· Scaling up faster than your Wi-Fi signal drops. One of our clients went from working with a single small distributor to partnerships with seven GPOs in under a year. These deals now span government, military, hospitals—you name it. Their revenue chart for next year looks like it's gearing up for a vertical climb.
· Streamlined operations = fewer headaches. Negotiating separate contracts with individual hospitals is the business equivalent of watching paint dry. GPOs let you bypass that hassle, offering a one-and-done approach to contractual negotiations.
· Volume, volume, volume. Think about this: Sign one contract, and you’ve got access to thousands of members. Vizient, the biggest GPO in the U.S., represents over 31,000 organizations. That’s like landing a deal with an entire small country.
Medicare Advantage: An OTC Goldmine
Switching gears to Medicare Advantage (MA)—this might just be the sleeper hit of the consumer health market. These private insurance plans are a favorite among Medicare enrollees, with around 33 million members this year. Many of these plans cover OTC products and medical devices, making them prime territory for suppliers. Why MA is worth the hustle:
· Targeted access to a booming demographic. The MA population includes many people managing multiple chronic conditions. Translation? They need your OTC products and devices, and they need them regularly.
· Distribution channels that do the heavy lifting. MA plans distribute products via online and mail-order pharmacies, as well as through OTC benefits cards that are accepted at retail heavyweights like Walmart, CVS, and Walgreens. It’s like having a direct line to your customers’ shopping carts.
· Formulary acceptance: Your ticket to entry. Here’s the catch—your products need to meet strict quality parameters and be listed on the plan’s formulary. Getting there can be a journey, but the payoff is huge. Having a sharp, experienced team to guide you through the process can make all the difference.
Cracking the Code on GPOs and MA Plans can feel like tackling calculus after a long weekend. The good news? With the right strategy and team, it’s totally doable—and highly rewarding. Here’s what you’ll need to succeed:
· Experts who know the ropes. You’ll need pros who’ve mastered the art of negotiating GPO contracts, clearing regulatory hurdles, and securing formulary acceptance. Strategic market analysis. Knowing where to focus your efforts is half the battle. Market insights can help you identify the best opportunities to maximize ROI.
· Performance tracking to stay on course. Once you’re in, monitor outcomes closely to make necessary adjustments and keep your growth trajectory on track.
Bottom line, breaking into GPOs and MA plans isn’t exactly a cakewalk—but let’s be real, neither was figuring out how to mute (or unmute) yourself on Zoom, and you nailed it eventually. The effort pays off in spades for companies looking to boost sales volumes and secure a bigger slice of the healthcare pie. So, what are you waiting for? It’s time to stop circling the same old growth strategies and start exploring these untapped avenues. Who knows—you might just find yourself at the forefront of the next big healthcare boom.
Jason Reiser is president of Market Performance Group, marketperformancegroup.com.
