The impact of high drug prices on hospitals

January 18, 2019
Christine Blank

A new report details the financial strain rising drug prices are having on patients and hospitals alike.

Total drug spending per hospital admission spiked 18.5% between FY2015 and FY2017, according to a new survey.

The survey, conducted by an independent research firm for the American Hospital Association (AHA), the Federation of American Hospitals (FAH), and the American Society of Health-System Pharmacists (ASHP), found that higher prescription drug prices-driven in part by drug shortages-is stressing hospital budgets across the country.

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In addition, hospitals realized very large percentage increases (more than 80%) of unit price across different classes of drugs, including those for anesthetics, parenteral solutions, and chemotherapy.

Nearly 80% of hospitals found it extremely challenging to obtain drugs experiencing shortages, while close to 80% also said that drug shortages resulted in increased spending on drugs to a moderate or large extent.

“This report confirms that we are in the midst of a prescription drug spending crisis that threatens patient access to care and hospitals’ and health systems’ ability to provide the highest quality of care,” said AHA president and CEO Rick Pollack, in a statement. “Solutions must be worked on to rein in out-of-control drug prices and ease the drug shortages that are putting a strain on patient care.”

Related: New bills aim to lower drug prices

The report also found that outpatient drug spending per admission increased by 28.7% while inpatient drug spending per admission increased by 9.6% between FY2015 and FY2017.

As a result, around 25% of hospitals had to cut staff to mitigate budget pressures. And more than 90% of hospitals surveyed said they had to identify alternative therapies to manage spending.

A 2016 AHA/FAH report also found skyrocketing inpatient hospital drug costs. “Hospital budget pressures resulting from the continued dramatic increases in drug prices have negative impacts on patient care, with hospitals being forced to delay infrastructure investments, reduce staffing, and identify alternative therapies,” the organizations said about the report.

Read more: The impact of Medicare Part D proposals on drug pricing

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