A quarter of US hospitals cut staff to cope with rising drug costs from 2015 to 2017, study finds

Hospital drug spending jumped by 18.5 percent between 2015 and 2017, a rate that caused one in four hospitals to cut staff to ease budget pressures, a new study found.

The report was conducted by the research group NORC at the University of Chicago and commissioned by the American Hospital Association, the Federation of American Hospitals and the American Society of Health System Pharmacists. For the report, researchers analyzed a combination of survey data, informational interviews with hospital executives and pricing and spending data from two group purchasing organizations. The analysis included more than 4,200 U.S. hospitals.

Seven key insights:

1. U.S. community hospitals spent an average of $555.40 on prescription drugs for each admitted patient in 2017, compared to $468.50 per patient in 2015. The increase per admitted patient resulted in $1.8 million in new spending for an average hospital.

2. The 18.5 percent jump in total spending far outpaces inflation, which was 6.4 percent during the same time period.

3. Outpatient drug spending per admission grew 28.7 percent, and inpatient spending increased 9.6 percent between 2015 and 2017.

4. U.S. hospitals spent upward of $210 million on Activase, a widely used drug to treat heart attack and stroke patients. Unit prices for this drug increased by 18.8 percent to $4,143 in 2017. In 2015, the unit price was $3,486. There are several other examples cited in the report of drug prices that increased significantly, including Remicade, Humira and Enbrel, which went up by 15 percent to 21 percent between 2015 and 2017.  

5. The main drivers of the increases were high list prices set by drugmakers and shortages of critical medications, like saline and generic injectables.

6. About 80 percent of hospitals found it extremely challenging to obtain drugs in short supply.

7. To ease budget pressures associated with the rising drug prices, 90.3 percent of hospitals found alternative therapies, while 25 percent cut staff.

Find the full study here.

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Dispensary of Hope's pharmaceutical director Dr. Hillary Blackburn on what makes a dynamic, influential leader

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