AHA: Inpatient drug costs skyrocketing
- A survey sponsored by the American Hospital Association and the Federation of American Hospitals showed inpatient drug costs increased by an average of almost 39% per admission between 2013 and 2015, according to an analysis by the University of Chicago’s NORC, an independent research institution.
- The drug price rises were seen across a variety of drug types including both low- and high-volume drugs, along with both branded and generic drugs.
- More than 90% of the hospitals questioned said the drug price changes had a moderate to severe impact on their ability to manage budgets. Data from 712 hospitals was included in the analysis, in addition to figures contributed by group purchasing organizations representing more than 1,400 community hospitals.
Drug prices have dominated headlines of late, from accusations of price gouging at the likes of Valeant, Turing and Mylan, to battles over cost-effectiveness studies. The furor has even prompted Allergan's CEO Brent Saunders to commit to sustainable pricing and greater transparency, including limiting price increases on branded drugs.
Some of the price rises revealed in AHA's survey were startling. The Daraprim (pyrimethamine) price increase, put in place by Martin Shkreli at Turing Pharmaceuticals, had an impact even though the volume is relatively low. Average price per unit rose by 3,695% from $919 in 2013 to $34,882 in 2015, increasing spending from under $600,000 to over $810,000.
More dramatically, due to higher volume, prices for the hormone calcitonin-salmon rose from $67 per unit to $2,286, a 3,263% price increase. This meant a rise in the overall spending for the drug from $2.4 million in 2013 to $55.2 million in 2015.
Even the 'lowest' price rise reported, a 300% increase for ephedrine sulfate, led to a nearly fivefold increase in spending, from $7.5 million to $34.6 million.
"This analysis is a real wakeup call on health care spending. It confirms what local hospital administrators recognize as a serious and growing problem for their patients. Rapidly rising drug costs combined with unsustainable Medicare and Medicaid cuts put hospitals in an impossible bind," said FAH President and CEO Chip Kahn in a statement.
The study focused solely on the price of the drugs, rather than on any long-term value that innovative therapeutics might offer. Industry groups are hoping to highlight the problem and attribute blame to someone other than the pharma companies. BIO's Innovation Saves and PhRMA's From Hope to Cures campaigns, for example, focus on the high costs of innovative medicines and how they can still offer cost-effectiveness in terms of long-term savings in healthcare costs.
- AHA Statement
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