Hospitals see spike in drug prices 'that often have nothing to do with improving patient health'

Tuesday, October 18, 2016 by: Daniel Barker
Tags: hospitals, drug prices, Big Pharma

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(NaturalNews) "Random and inconsistent" drug price hikes are affecting hospitals - as well as patients - according to a new report commissioned by the American Hospital Association (AHA) and the Federation of American Hospitals (FAH).

The report, which was conducted by the National Opinion Research Center (NORC) at the behest of the two hospital associations, found that inpatient hospital drug costs increased more than 38 percent per admission between 2013 and 2015. The increase was attributed to higher drug unit prices, not the volume of drugs purchased.

The analysis was based on data from 712 community hospitals and two group purchasing organizations (GPOs) that represent more than 1400 community hospitals.

From the report press release:

"Price increases appear to be random, inconsistent and unpredictable: large unit price increases occurred for both low- and high-volume drugs and for both branded and generic drugs. About half of the drugs evaluated had no generic competition."

One example noted in the report was that of a drug called calcitonin-salmon, which is used to treat bone pain associated with osteoporosis and other conditions. The price of that drug increased more than 3000 percent between 2013 and 2015, driving spending on the drug for the two GPOs from around $2 million to $55 million in that period.

Drug price hikes put hospitals in "an impossible bind"

More than 90 percent of the hospitals involved in the survey reported that drug price increases had a "moderate to severe impact on their ability to manage hospital budgets."

Federation of American Hospitals CEO Chip Kahn said:

"This analysis is a real wakeup call on health care spending. It confirms what local hospital administrators recognize as a serious and growing problem for their patients. Rapidly rising drug costs combined with unsustainable Medicare and Medicaid cuts put hospitals in an impossible bind."

Kahn also observed that the price hikes were not "associated with clear and important clinical improvements," but instead appeared to be "random and inconsistent from one year to the next."

Some hospitals are unable to spend money on hiring needed personnel or purchasing new equipment because of drug price hikes, according to Cleveland Clinic chief pharmacy officer Scott Knoer.

"The bottom line is if you spend several million dollars more on drugs, it's just accounting," Knoer said. "You're going to spend several million dollars less on other things."

Big Pharma isn't willing to shoulder all of the blame, however. The report provides a "distorted portrayal of medicine spending," according to Pharmaceutical Research and Manufacturers of America (PhRMA) spokesperson Holly Campbell.

Hospitals also mark up drug prices

PhRMA criticizes the report for cherry-picking information on a limited number of drugs and for not mentioning the fact that hospitals also mark up prices on drugs.

Hospitals may lose money on insured patients when drug prices spike, but they can make up some of that loss with uninsured or out-of-network patients. If the price of the drug goes up, so does the profit margin.

In the end, everyone pays - even those who aren't being hospitalized, but who are still forced to pay higher premiums, deductibles and taxes to cover the cost of drug price hikes.

Greedy drug companies are the main culprit, but hospitals share part of the blame. If there's any silver lining at all, it's the fact that many people are turning to natural medicine, partly because they simply can't afford expensive (and often dangerous and ineffective) pharmaceutical drugs.

Mainstream medicine almost seems to be on the verge of driving itself out of business, and that's just what it deserves. The health care system is failing because it's based on greed and making people sicker.

Alternative medicine offers a solution - natural remedies are far less expensive than pharmaceuticals and can be used to treat and prevent disease without harming the body. That's why Big Pharma is working so hard to suppress its acceptance.

Sources:

MedCityNews.com

AHA.org

NaturalBlaze.com