For the past year, hospital purchasing groups have been under a spotlight, as Senate investigators and major media investigate charges that groups have done more harm than good in favoring large product companies. One of two groups at the center of the crisis, Premier, says it is cleaning up its act-and even hired an ethicist to help-but its take on necessary reforms embraces a broad, big-picture view of hospital/GPO relationships. MedAssets is taking more of a back-to-basics approach that stresses flexibility and choice in contracting options while helping members address the escalating costs of physician preferred products. The challenge for GPOs: the pressure to reform comes at a time when competition for hospital customers is fierce, in part because the financial pressure on hospitals has never been greater.

This latest acquisition by e-health's MedAssets underscores how important established players like GPOs are in promoting an Internet-enabled hospital supply chain. In fact, MedAssets was arguably the first major e-health player to recognize that GPOs are not only vital for the base of customers and suppliers they bring, but can also be attractive sources of revenue.

One of the last of the major hospital groups to commit to an Internet strategy, Novation has leaped into e-commerce with both feet through its recent deal with Neoforma. The company faces a host of challenges, not the least of which come from uncertain hospitals and reluctant product companies. For suppliers, the alliance of leading groups and dot-com companies raises questions about the future of the hospital marketplace.

These days, one can almost be convinced of the reality of a truly efficient market, one that brings together buyers and sellers, matching excess capacity with need. The Internet promises to make this possible, by acting as the ultimate go-between. It is not only the purveyors of products that have realized the potential of the Internet's connectivity. Recently, several sites have gone up to facilitate the buying and selling of certain fungible but less tangible assets of R&D based companies. Yet2.com, Pharmalicensing.com,and PL-X.com all have web sites that seek to match buyers and sellers in technology transfer. PharmaUniverse.com hopes to create an efficient market for other pharmaceuticals assets like short-dated inventory or manufacturing capacity.