When a Buyer for Hospitals Has a Stake in Drugs It Buys
Dr. Tom Ferguson was puzzled when a patient on an IV drip of the antibiotic gentamicin suddenly experienced a sharp fall in blood pressure and a racing pulse. Then it happened to a second patient.

When a third patient began to shake uncontrollably just 10 minutes after beginning her gentamicin IV, Dr. Ferguson, an infectious disease specialist in Texas, knew what to do: stop giving the medicine, and find out who made it. In this case, the antibiotic came from American Pharmaceutical Partners.

After other doctors reported that the company's gentamicin had made some patients sick, American Pharmaceutical pulled the drug from the market in 1999.

It would not be the last of American Pharmaceutical's troubles. Yet the company has grown rapidly into one of the nation's leading suppliers of injectable generic drugs. One reason: it has what so many medical-supply companies covet — a national contract with Premier Inc., one of the hospital industry's biggest buying groups, serving more than 1,500 hospitals.