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How Drug Shortages Are Impacting Drug Prices in 2019 - Part 2

Posted by Dr. Brita Hansen on Feb 22, 2019 12:05:00 PM
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Rising Drug Prices Part 2 Feature PhotoFeb. 21, 2019 - Welcome to part two of a three-part blog series about the drug shortage crisis. Part one covered the rapid increase in prices and the types of drugs most commonly affected. Here in Part two we’re delving deeper into the impact on hospital systems’ ability to manage drug spending and shortages.

These posts are inspired by insights from the January 2019 report, “Recent Trends in Hospital Drug Spending and Manufacturer Shortages,” which was issued jointly with the American Hospital Association, Federation of American Hospitals and American Society of Health-System Pharmacists. 

Budgetary impact

It’s no surprise hospital systems are reeling from the budgetary blow since drug spending per hospital admission has escalated by more than 18 percent between 2015 and 2017. Almost two-thirds of hospitals in the report stated changes in drug prices had a moderate or severe impact on their budgets.

The report also states that hospitals experienced price increases of over 80 percent across different classes of drugs such as anesthetics, parenteral solutions, opioid agonists and chemotherapy.

How hospitals are coping

Hospitals are responding with a variety of measures. More than 90 percent of surveyed hospitals rely on alternative therapies to mitigate the impact of drug shortages and related price increases.

Researching and implementing alternative therapies is extremely time-consuming and introduces patient safety risk as clinicians must use less familiar therapies and concentrations.  Nearly 70 percent of hospitals in the report are doing more in-house compounding, while 28 percent are delaying the purchase of new or investments in current.

Ultimately, there are many situations where there is no alternative, and most hospitals are forced to purchase higher-priced, off-contract alternatives instead.  

Access challenges

More than three-fourths of the hospitals in the report found it extremely challenging to obtain drugs in short supply. The report noted that hospital pharmacies are disproportionately affected by drug shortages because the majority are related to sterile injectable medications used primarily in hospital settings.

What’s driving the drug shortage epidemic?

Quality control issues are a frequent cause, leading to recalls and manufacturing delays. The limited number of manufacturers magnifies the problem. A handful of companies make most of the sterile injectable medications on the market, so a single event can produce significant system-wide shortages.

What are hospitals doing about it?

To improve the availability of key medications, hospitals and health systems are adjusting more than just their contracting and procurement practices. Once a shortage has occurred, it’s all hands-on deck to manage it, which is extremely time consuming and requires clinical expertise and context to implement clinically appropriate strategies that protect patient safety.

The report notes intensive efforts and close collaboration by staff to establish drug formularies and clinical protocols that switch patients to alternative medications and change the frequency of drug delivery to avoid unnecessary waste.

To help mitigate the impact of shortages and manage them more efficiently when they can’t be avoided, hospitals across the country are turning to  The Drug Shortage App from LogicStream Health™. This management tool helps pharmacy teams better manage drug shortages and minimize disruptions to patient care.

Learn more about what this solution can do to help your organization take control of the situation by downloading a free overview of The Drug Shortage App at www.thedrugshortageapp.com.

Part 3

In Part 3 of this blog series, we’ll look more closely at the report findings related to ramifications of staffing changes and the effect on patient care.

About Dr. Brita Hansen

Brita Hansen, M.D., is Chief Medical Officer of LogicStream Health. She began her career as an internal medicine hospitalist physician after receiving her undergraduate degree at NYU and her Doctorate of Medicine from the University of Minnesota School of Medicine. She served as Chief Health Information Officer for the Hennepin County Medical Center before joining LogicStream Health.

Topics: Drug Shortages, Drug Prices

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Brita Hansen, MD, is Chief Medical Officer at LogicStream Health. Dr. Hansen is also a practicing internal medicine hospitalist and has served as a healthcare system executive, most recently as Chief Health Information Officer at Hennepin County Medical Center in Minneapolis. Dr. Brita’s Blog covers a range of topics, including:

  • Appropriate Utilization
  • Clinician Engagement
  • Clinical Process Performance & Improvement
  • Healthcare Information Software & Technology
  • EHR Optimization
  • Clinical Decision Support
  • Healthcare Patient Safety & Quality

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