Ebos, a pharmaceuticals and medical supplies distributor, says having one medical supplier to all the nation's 20 district health boards is all about saving the Government money.
Ebos announced it has been confirmed as the preferred supplier on Wednesday.
Ebos already supplies the Auckland, Waikato, Otago and Southland DHBs and part of Northland's.
While the final decision isn't expected until later in the year, it's a major milestone for the New Zealand-based company and the culmination of a two-year process which involved competing with eight multi-national companies.
Managing director Mark Waller said the whole process is about the Government wanting to cut costs by eliminating duplication.
He said the Government wants to save about $700 million a year over a five year period for the entire supply of medical products and some pharmaceuticals to every district health board in the country.
"So it's going to be a totally co-ordinated approach from logistics to information technology, finance payables, physical warehousing distribution."
Mr Waller said the Government does not want to take on any unnecessary risks.
He said Ebos is a proven performer and it put forward an interesting and innovative costing model which gives the Government a lot of transparency.
Investors reacted positively to the news, pushing Ebos shares up 1.5% to $9.29 on Wednesday.