Health systems across the U.S. are implementing various strategies to manage pharmaceutical expenses while maintaining high care standards.
Below are responses from eight pharmacy leaders who were asked: As healthcare costs continue to rise, what is one strategy your pharmacy is adopting to help reduce medication expenses while maintaining high quality care?
Note: These responses have been lightly edited for length and style.
Jess de Jesus, PharmD. President and Chief Pharmacy Officer at Beth Israel Lahey Health (Cambridge, Mass.): The continuing rise of healthcare costs and reduction in reimbursement has placed additional focus on pharmacy departments in health systems to reduce pharmaceutical expenses and generate revenues. One strategy that our health system has adopted to reduce pharmaceutical expenses while maintaining high-quality care is to ensure that the most cost-effective medications, like biosimilars, are formulary and appropriately utilized for our patients. Our clinical pharmacists work collaboratively with our providers to help manage medication therapies and ensure the medications are used and dosed appropriately to achieve optimal patient outcomes. Our pharmacy team also works closely with disease state experts to craft appropriate use criteria for high cost medications that are utilized in the inpatient setting. This ensures that high-expense medications are utilized judiciously in patients most likely to derive benefit from them. Another strategy is leveraging BILH Pharmacy’s central distribution center to standardize formularies, reduce hospital pharmacy inventories, and negotiate contract pricing for our 14 hospitals. Additionally, BILH Pharmacy works in collaboration with our GPO, wholesalers and pharmaceutical manufacturers to reduce the cost of pharmaceuticals.
Derek Grimm, PharmD. Enterprise Director of Medication Management at WVU Health (Morgantown, W.Va.): WVU Medicine has established a collaborative team of pharmacists, physician experts and EHR system analysts to develop standardized medication utilization pathways that reflect the most cost-effective care across our 25 hospitals. This initiative has reduced medication variation, waste and treatment duration, significantly lowering pharmaceutical costs. Through ongoing medication use monitoring, this team enhances pathway adherence, adjusts utilization, responds to market dynamics and optimizes care settings.
Bonnie Levin, PharmD. Vice President of Pharmacy Services at MedStar Health (Columbia, Md.): At MedStar Health, we employ a comprehensive medication utilization management process to effectively reduce drug expenses while ensuring high-quality care. Our strategies encompass every aspect of the process, from identification and design to approval, implementation and monitoring.
A dedicated system Pharmacy & Therapeutics Committee spearheads efforts to manage our formulary, ensuring the use of the most cost-effective medications. This includes adherence to developed policies, clinical practice guidelines, and robust therapeutic interchange and IV push programs.
We maintain ongoing partnerships with nursing and providers to continuously evaluate the efficacy versus cost of medications, identifying areas for improvement. These initiatives are supported by thorough education and communication efforts.
MedStar Health is fortunate to have strong quality and safety, human factors, information systems and innovation divisions that collaborate closely with our pharmacy team. This collaboration ensures that decisions made throughout the process are optimal for patient care.
Tim Lynch, PharmD. Senior Vice President and Chief Administrative Officer at MultiCare Health System (Tacoma, Wash.): Inflationary pressures, ongoing drug shortages, and a challenging pharmaceutical landscape have driven the need for innovative approaches to control costs while maintaining high-quality care. Since 2021, MultiCare Health System has reduced inpatient drug spend by 24% through a multifaceted strategy.
First, we reorganized our pharmacy supply chain team to create a coordinated, centralized purchasing structure, ensuring we select the lowest-priced, highest-quality products to treat our patients. Second, we overhauled and updated our pharmacy automation to establish a perpetual inventory system and automate routine procurement tasks — streamlining the ordering process, reducing labor expenses, and improving operational efficiency. Third, we leveraged advanced spend management analytics and machine learning models to identify cost-saving opportunities, such as bulk purchasing and more cost-effective suppliers or products.
These tools also allow us to uncover new strategic partnerships that offer enhanced access, visibility, transparency and pricing beyond what traditional GPO and primary wholesaler relationships can provide. Lastly, the use of real-time data and analytics has enhanced decision-making, increased contract negotiation leverage and minimized procurement errors and waste. Together, these initiatives have not only improved the efficiency and accuracy of our operations but also driven substantial value across both our inpatient and retail pharmacy services.
Jeffrey Oliver, PharmD. Vice President and Chief Pharmacy Officer at Orlando (Fla.) Health: Here are the some key initiatives aimed at reducing medication expense:
- Collaborate with prescribers to guide cost-effective medication choices (e.g., biosimilars substitutions).
- Pharmacy-led Medication Disease Management Program to reduce polypharmacy and optimize costs.
- Clinical pharmacists use analytics to prospectively review data, inventory, patient demographics and payer trends to promote generic substitutions and therapeutic alternatives when clinically appropriate.
- Introduction of savings programs such as manufacturer copay assistance, discount cards, Patient Assistance Programs (PAP), and grants.
- Training pharmacy staff to identify and address affordability barriers at the point of sale.
- Purchasing optimization and use of 340B program to drive down costs.
- Leveraging 340B savings to support the patient assistance program.
Rita Shane, PharmD. Vice President and Chief Pharmacy Officer at Cedars-Sinai ( Los Angeles): One of our key strategies has been to establish a multidisciplinary Therapeutic Innovation Stewardship Committee. This approach brings together pharmacists, physicians, payer relations, finance, risk management, business planning and bioethics experts who work together to navigate the complexity associated with breakthrough, ultra high-cost therapies. The goal of the committee is to develop a framework for management of therapeutic innovation to support value and patient access while integrating clinical and financial decision-making. The committee was instrumental in supporting the comprehensive management of a new Alzheimer’s therapy.
Clyde Spence, PharmD. Network Director of Acute Pharmacy Services at Hackensack Meridian Health (Edison, N.J.): At Hackensack Meridian Health, we are focusing on the recent implementation of a network-wide Pharmacy and Therapeutics Committee as a strategic approach to reducing medication expenses while maintaining high-quality care across the system. Previously, multiple independent P&T committees operated within different parts of the system, leading to inconsistent formulary decisions and variations in clinical practice. The health system can standardize formulary management and therapeutic interchange decisions across all sites by consolidating these into a single, unified committee. This centralization promotes alignment on evidence-based, cost-effective medication use, reduces duplication of effort and strengthens purchasing power through system-wide contracting. A unified P&T committee also facilitates consistent clinical guidance, streamlining provider education, and improving operational efficiency and patient outcomes.
Mark Sullivan, PharmD. Chief Pharmacy Officer and Senior Vice President at Vanderbilt Health (Nashville, Tenn.): We plan to continue our tactics around evidence-based formulary management, pharmacy procurement and contracting and optimizing medication delivery to impact medication expense. We are thinking about how to leverage tools to influence prescribing behaviors beyond the electronic health record to impact this as well.
