Payers and patients aren’t the only ones deeply concerned about U.S. drug price hikes. Hospitals have also been hit badly by hikes, a new report says, detailing some of the worst sticker shocks--and the high costs associated with them.
Issued by the American Hospital Association, the report says drug price hikes seem to be “random, inconsistent and unpredictable,” making it tough for hospitals to manage their budgets. In its list of the most-hiked meds from 2013 to 2015 are several familiar names to pharma watchers.
Of the drug group examined, Valeant’s Isuprel and Nitropress were credited with the highest spending, running at $86 million and $95 million, respectively, at the 2,100 hospitals included in the analysis. Over the period, the drugs--which Valeant has promised to discount ever since it was slapped around for its price hikes and much more--saw respective price increases of 480% and 672% from 2013 to 2015.
Just last month, 13 top U.S. hospital systems said those promised discounts are still MIA. Valeant maintains that it's offering discounts, but in the low double digits after those triple-digit hikes.
While its overall spending was low, Turing’s Daraprim--the same drug that kicked off a yearlong pricing firestorm last fall--saw the biggest price jump at 3,695% over the period.
One problem specific to hospitals, the study notes, is that Medicare reimbursement can’t keep up with rapid changes to drug prices, so the facilities themselves get stuck with outstanding expenses. The price hikes, combined with federal cuts, place hospitals in an “impossible bind,” Chip Kahn, CEO of the Federation of American Hospitals, said in a statement.
To bring some relief, the purchasing group Premier, which attempts to use high purchasing volume to force pricing deals, called on a “faster, more nimble FDA” to boost competition and keep drug costs down.
“Every drug listed in the report had two or fewer suppliers in the market,” Blair Childs, the company’s SVP of public affairs, said in a statement. “In these cases, organizations like Premier are left with little or no competitive leverage. In a number of cases, the suppliers avoided working with Premier altogether, thereby preventing any competitive pressure.”
The study incorporated data from 712 community hospitals, with purchasing groups adding data from another 1,400. Of the hospitals surveyed, 90% said price hikes had a “moderate to severe” impact on budgeting.
To that point, hospital spending on the generic bone pain med calcitonin salmon, made by Apotex, Par Pharma and Mylan, jumped from $2 million to $55 million over the two-year period on a net price hike of more than 3,200%.
Neostigmine methylsulfate, used to reverse neuromuscular blocking agents following surgery, jumped in spending from $4.3 million in 2014 to more than $78 million just a year later, riding a net 446% price hike. In 2013, Eclat Pharmaceuticals--after winning approval for its neostigmine product--asked the FDA to bar unapproved generic competitors and then increased its price. Eclat has been acquired by Flamel.
Flamel, for its part, cited the costs required to secure an FDA approval as justification for the price increase. A spokesperson told FiercePharma that the company only petitioned the FDA because the agency didn't remove the unapproved competitors in accordance with its own policies.
The report comes amid a period of intense scrutiny on the pharma industry, as congressional panels and the larger public learn more about its pricing practices. Over the last year, media reports on huge price hikes have prompted official examinations into some cases, with Sen. Bernie Sanders and Rep. Elijah Cummings being two vocal critics of the practice.
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Editor's note: This story was updated with a statement from Flamel.