Afternoon Coffee: U.S. GDP up in Q3; Premier snags cost management platform Medpricer; Tradeshift, Genpact partner up

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The U.S. economy grew at 1.9% in the third quarter, a bit more slowly than in the previous quarter, “although solid consumer spending and an improvement in the housing sector kept economic growth on track,” according to the WSJ. “Consumer spending moderated to [a] 2.9% annual rate in the third quarter,” from a rate of 4.6% in the second, according to the article.

Tradeshift, Genpact enter into strategic partnership

Global professional services company Genpact has strategically partnered with payments firm Tradeshift to enable enterprises to transform accounts payable and procurement processes, according to this announcement. The move will combine the power of the Genpact Cora digital business platform and Tradeshift's leading-edge business-to-business network technology.

AC Spotlight: Medpricer makes it big

Premier Inc., a leading healthcare improvement company, announced that it has acquired Medpricer, described in the press release as “one of the nation’s leading technology-based solutions, to optimize healthcare provider savings across purchased services contracts.” Premier, which reported revenue of $1.2 billion in 2018, acquired Medpricer for $35 million. According to the release, “the acquisition is not expected to materially impact financial results in FY2020 and is expected to be modestly accretive in FY2021.”

Medpricer was founded in 2004 as a reverse auction service provider, and gradually evolved into a technology solution provider, culminating in the launch of its comprehensive purchased services sourcing and spend management solution, mSource, in 2016. According to the release, “Medpricer’s spend management platform uses machine learning to validate, compare and onboard purchased services suppliers; track and measure spend by category, supplier and facility; benchmark contracts terms to ensure competitive rates; set and manage specific savings targets; and manage contract compliance.”

Purchased services, which “often fall outside the scope of national group purchasing contracts,” are estimated to “account for up to 30 percent of a typical healthcare provider’s non-labor expenses, and represent a total addressable acute care market of approximately $160 billion,” the release also stated.

“Medpricer gives us a scalable technology platform and data-driven evidence designed to gain control over purchased services spend – regardless of GPO affiliation,” Susan DeVore, Premier’s CEO, was quoted as saying. “Combined with Premier’s market-leading, categorized purchased services spend data and our sophisticated performance improvement technology suite, we believe we will be uniquely situated to become the one-stop-shop for healthcare margin improvement.”

Spend Matters has been following Medpricer since late 2018 (for more information, see The Contingent Workforce and Services (CW/S) Insider’s Hot List: January 2019 (Special Focus Edition on Services) and 5 Areas for Services Procurement Professionals to Watch in 2019).

Fiat Chrysler, Peugeot in talks over deal

Fiat Chrysler and Peugeot owner PSA are in talks over a potential tie-up, according to Reuters. If and when it happens, that could create a $50 billion auto giant better placed to tackle a host of costly technological and regulatory challenges facing the global auto industry, reports Reuters.

Telecom supply chain rules still being reviewed, says official

These are rules that will pave the way to implement a White House executive order on U.S. telecoms supply chains, and eventually ban China's Huawei, and they are now overdue. A Commerce Department official told Reuters that the rules were “under consideration and review.” The rules were due early October. Speaking at an event in Washington, Eileen Albanes from the Commerce Department said the rules were under consideration and did not offer a timeline. They are “not yet ready for prime time,” she was quoted as saying.

FDA task force blames shortage in drug supplies on low prices, "broken marketplace"

A report by a task force led by the Food and Drug Administration and members from other federal agencies has recommended that hospitals and other buyers may consider paying higher prices for older generic drugs, according to the New York Times. The task force reported that chronic drug shortages that threaten patient care were caused by rock-bottom prices for older generic medicines, and a faulty health care marketplace not adhering to the rules of supply and demand, among other factors, the NYT reported.

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