Economies of purchasing group size

The relationship of drug price and purchasing group size was evaluated. Thirty drug line items were studied in 26 private hospital purchasing groups of various sizes. Prices were analyzed relative to purchasing group size, age, and location. Drug prices were negatively correlated to group size in a linear relationship. Prices were significantly lower in groups representing greater than 10,000 beds. No significant relationship was found between group age or location and drug prices. The theory that increasing purchasing group size will result in better contract prices was supported.