Hospitals join drug price-fighting battalion with plans to crack down on spending

U.S. hospitals are alarmed over rising drug prices, and like lawmakers, patients and doctors, they want to do something about them. Some healthcare centers are finding creative ways to take aim at skyrocketing prices for branded and generic drugs, especially after dramatic price hikes last year from companies such as Valeant ($VRX) and Turing Pharmaceuticals.

Take the University Hospitals of Cleveland, for example. The hospitals are assigning pop-up symbols such as "$$$$$" to flag expensive meds for prescribing doctors, The Washington Post reports.

University Hospitals of Cleveland decided to adopt the system after last year's price hikes took a costly toll on its budget, Shawn Osborne, the system's VP of pharmacy services, told the newspaper. The hospitals' pharmacy services arm went about $20 million over budget in 2015. "The target on my back has gotten much bigger, and it was pretty big before," Osborne said, as quoted by the WaPo.

Cleveland Clinic faced a similar dilemma last year after prices for two heart drugs, Nitropress and Isuprel, jumped 200% and 500% respectively after Valeant bought the meds. As a result, the system built an algorithm to monitor prices and highlight expensive drugs.

University of Utah Health Care system drug information service director Erin Fox

Another price-fighting tactic involves putting up roadblocks to prescribing pricey meds. Pharmacy administrators at University of Utah Health Care system pulled Isuprel off about 100 mobile "crash carts" after the drug's price skyrocketed, Erin Fox, director of drug information service for the system, told the newspaper.

Now, doctors have to request the drug from the hospital pharmacy. "Our physicians are pretty annoyed at having to make clinical decisions about drugs they've used forever based on cost," Fox said. "With some of these drugs, there just aren't good alternatives. That's what makes it really frustrating."

Some of the hospitals' price-fighting moves have already led to victories. Valeant recently agreed to offer volume-based discounts on 30% on Nitropress and Isuprel after getting complaints from healthcare centers about the drugs' price hikes.

And the hubbub over pricing seems to be dropping off a bit, the WaPo article points out. Last year, Valeant came under fire by lawmakers and the public for its price increases for Nitropress and Isuprel. Turing Pharmaceuticals also got flak for raising the price of antiparasitic med Daraprim from $13.50 a tablet to $750 after buying the drug in August.

But the overarching trend of rising prices is still here to stay, Cleveland Clinic's chief pharmacy officer Scott Knoer said. Cleveland Clinic recently flagged a 120% price hike. "I don't think you're going to see these 300, 400, 500% increases, at least for a while. We'll still see significant increases, but it won't be so obvious. Prices are not going down," Knoer said.

- read the WaPo story (sub. req.)

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