In the last few years there have been considerable changes in the National Health Service in the United Kingdom. Arguably the most significant of these has been the introduction of competition into health care with the split of the health service into purchasers and providers of care. Central to this development has been the introduction of General Practice fundholding, whereby practices purchase health care for their patients directly from competing suppliers. Those practices that have become fundholders have faced considerable challenges in developing their purchasing function given the complexities of contracting within the context of the NHS internal market. Although one of the original aims of GP fundholding was to facilitate locally responsive purchasing, such have been the complexities of contracting that many fundholding practices have attempted to reduce the managerial demands of purchasing through membership of purchasing consortia. Based on an in-depth study of GP fundholders across Scotland, this paper explores the development of consortia-based purchasing in terms of the managerial implications for the participant practices of purchasing through such inter-organizational networks. © 1997 Elsevier Science Ltd.