• Article
  • April 26, 2016

Working Together on Drug Pricing and Shortages

Children's hospitals are working together to address these complex issues to improve affordability and access to lifesaving drugs.

By Bill Barnes

Drug pricing, shortages and spending are complicated issues with significant impact on patients, providers and hospitals. In recent months, overnight spikes in drug prices have dominated headlines, increasing visibility on a host of drug-related issues and earning the attention of Congress and presidential candidates. And though no longer in the spotlight, drug shortages continue unabated, affecting patient care. Meanwhile, children's hospitals are working together to address these complex issues to improve affordability and access to lifesaving drugs.

The pediatric market faces challenges as children's hospitals deal more often than adult hospitals with sole manufacturers, off label uses and smaller dosage requirements. Consequently, children's hospitals are spending more time identifying and procuring the right drugs for our patients. We're also seeing a decrease in patient medication adherence due to higher out-of-pocket costs. This can translate to increased readmission rates and total costs of care.

The current environment

On the legislative front, children's hospitals are providing educational outreach to congressional staff while brainstorming with industry experts on possible solutions to help affect policy outcomes. Congress continues to examine the causes of drug price increases in the generic and brand markets and to look for ways to help Americans access critical medications. These efforts range from focusing on faster Food and Drug Administration approval of generic drugs to evaluating the true value of a drug.

The current drug pricing environment has also increased scrutiny of the 340B Drug Pricing Program, which provides discounts to qualifying providers. Regulators and Members of Congress are asking questions about the value of the program. I chair the Children's Hospital Association's 340B work group; as a team, we are collaborating with hospitals to find ways to support the 340B program, demonstrate its value, and discuss ways hospitals are managing the impact of drug prices and shortages.

Moving forward

Beyond public policy, children's hospitals are working together to address issues arising from increasing drug costs and decreasing supply. A 15-member Pharmacy Data and Analytics Team was created to provide objective support and guidance to assist member hospitals in identification of pediatric pharmacy best practices to improve operational efficiencies and clinical outcomes.

It remains critical to be proactive in addressing drug pricing and shortages. The burden of these increases is being shifted more to hospitals and patients. Federal and state budgets are feeling the pressure of these increases as well. President Obama's budget signaled the need to reduce costs in Medicaid and Medicare through proposals aimed at increasing the value Americans receive from medications; concurrently, several states are putting drug cost issues on their ballots.

There are no easy answers, but children's hospitals must work together through public policy, supply chain and best practices to ensure patients have timely, affordable access to the drugs they need to survive and thrive.

Bill Barnes is government relations director at Primary Children's Hospital in Salt Lake City. Send questions or comments to magazine@childrenshospitals.org.