fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

FAH, AHA Briefing Drug Prices Draws Full House on Capitol Hill

February 08, 2019 | FAH Policy Blog Team

Category: Pharmaceuticals, Research

The Federation of American Hospitals along with the American Hospital Association (AHA) and the American Society of Health-System Pharmacists (ASHP) held a briefing on Capitol Hill this week to present the findings from a recent joint study on drug pricing.

Presenting to a room packed with Congressional staffers and media members, the expert panel detailed the burden of skyrocketing drug prices on hospitals and outlined market-based solutions to ensure patients receive quality and affordable medicines.

The panel included Martin VanTrieste, president and CEO of Civica Rx; Jack Hoadley, research professor emeritus at Georgetown University's Health Policy Institute; Molly Smith, AHA vice president for coverage and state issues; and Erik Rasmussen, AHA vice president of federal relations. 

Panelists used real-world examples to illustrate how relentless drug price increases and frequent shortages are eroding hospitals' ability to care for patients. They also highlighted these main findings from the study, including:

  • 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 anaesthetics, 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 can be found HERE. You can view a short video explaining the issue HERE and find an infographic HERE.