Throughout the 2015 and 2016 calendar years, controversial drug price increases dominated headlines. Big Pharma was slammed en masse for sickening rate hikes.
According to The Wall Street Journal, pharmacy costs at the nation’s hospitals, driven in part by surging drug prices, peaked at $33.6 billion in 2015 alone. This marked an 11% increase over 2014. While the healthcare community as a whole was shocked and dismayed, much of the action played out in courtrooms far from public intervention.
Now a new report is offering a glance into how hospitals are using aggressively creative solutions to bring drug spending back under control and prepare for possible future increases for essential, life-saving pharmaceuticals.
To understand the need for action, it’s is important to remember that hospitals are often caught between a rock and a hard place: the status quo is a system effectively designed to disadvantage healthcare facilities.
As WSJ wrote, such institutions are being squeezed from both sides. They buy the drugs from wholesalers, but don’t usually bill health insurers directly for those drugs. “Instead, insurers often pay hospitals a fixed rate to treat whatever ailment a patient is suffering. When drug prices soar unexpectedly, hospitals must absorb the extra cost.”
Hospital executives have thus
been devising and implementing
some of the following strategies:
Medstar Washington Hospital managed to save $1.7 million annually on Nitropress and Isuprel after a 500% price increase (at the hands of parent company Valeant Pharmaceuticals). Medstar repackaged Isuprel’s single-use ampul into 5 doses, and replaced Nitropress with its generic version.
Serving 22 hospitals, Intermountain Healthcare was able to reduce spending by $1.1 million by turning a single Isuprel ampul into eight doses.
Using computer intelligence, The Cleveland Clinic analyzes wholesale prices for 35,000+ drugs weekly, aiming to foresee surprise changes hospitals may miss for months. After predicting Mylan’s 100% price hike of their Aloprim gout treatment, they switched to a more economical alternative
at a savings of $80,000/year.
These are not small feats, but these are also not simple times.
As your Long Term Care Partner, SpecialtyRx is developing our own strategies to help you save more while doing more for your patients.