New Report Shows Impact of Rising Drug Prices and Drug Shortages on Patients and Hospitals

Today, the American Hospital Association (AHA), the Federation of American Hospitals (FAH), and the American Society of Health-System Pharmacists (ASHP) released a new report finding that continued rising drug prices, as well as shortages for many critical medications, are impacting patient care and putting strains on hospital budgets and operations. The report was prepared based on analysis conducted by NORC at the University of Chicago, an independent research institution.

“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. “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.”

“We see a developing crisis. Relentless drug price increases and all too frequent shortages of critical medications are eroding the capacity of hospitals to provide our patients needed care,” said FAH president and CEO Chip Kahn. “We believe policymakers should act now to protect patients.”

“ASHP is at the forefront of efforts to combat the systemic impact of ongoing drug shortages and rapidly rising drug prices,” said ASHP CEO Paul W. Abramowitz, Pharm.D., Sc.D. (Hon.), FASHP. “By working with government agencies and partners such as AHA and FAH, we will continue to offer policy solutions and a roadmap for the changes necessary to ensure optimal care for patients.”

Today’s report updates and expands on a previous AHA/FAH report from 2016 on skyrocketing inpatient hospital drug cost increases by also analyzing outpatient drug costs and the impact of drug shortages. The report found that 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. Hospitals also struggle with drug shortages, which can disrupt typical work patterns and patient care, and often require significant staff time to address. 

Specifically, the report showed that:

• Average total drug spending per hospital admission increased by 18.5% between FY2015 and FY2017.
• Outpatient drug spending per admission increased by 28.7% while inpatient drug spending per admission increased by 9.6% between FY2015 and FY2017. This 9.6% increase was on top of the 38% increase in inpatient drug spending between FY2013 and FY2015 included in the previous report.
• Very large percentage increases (over 80%) of unit price were seen across different classes of drugs, including those for anesthetics, parenteral solutions, and chemotherapy.
• Over 90% of surveyed hospitals reported having to identify alternative therapies to manage spending.
• One in four hospitals had to cut staff to mitigate budget pressures.
• Almost 80% of hospitals found it extremely challenging to obtain drugs experiencing shortages, while almost 80% also said that drug shortages resulted in increased spending on drugs to a moderate or large extent.
   

The full report, along with other resources on drug pricing, can be found HERE.

Contacts:

Colin Milligan, American Hospital Association (AHA), (202) 638-5491
Sean Brown, Federation of American Hospitals (FAH), (202) 624-1527
Aretha Hankinson, Director, Media Relations, (301) 664-8671

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The AHA is a not-for-profit association of health care provider organizations and individuals that are committed to the improvement of health in their communities. The AHA is the national advocate for its members, which include nearly 5,000 hospitals, health care systems, networks and other providers of care. Founded in 1898, the AHA provides education for health care leaders and is a source of information on health care issues and trends. For more information, visit the website at www.aha.org.

About the FAH

The Federation of American Hospitals (FAH), founded in 1966, is the national representative of more than 1,000 investor-owned or managed full-service community hospitals and health systems throughout the United States. Our members include hospitals in urban and rural America, as well as inpatient rehabilitation, psychiatric, long-term acute care, and cancer hospitals. Investor-owned hospitals serve their communities proudly while providing high-quality health care to their patients. For more information, visit – FAH.org.

About ASHP
ASHP represents pharmacists who serve as patient care providers in acute and ambulatory settings. The organization’s nearly 50,000 members include pharmacists, student pharmacists, and pharmacy technicians. For more than 75 years, ASHP has been at the forefront of efforts to improve medication use and enhance patient safety. For more information about the wide array of ASHP activities and the many ways in which pharmacists advance healthcare, visit ASHP’s website, www.ashp.org, or its consumer website, www.SafeMedication.com.