ASHP Guidelines on Medication Cost Management Strategies for Hospitals and Health Systems

Abstract

Because medication costs comprise the majority of healthsystem pharmacy budgets and continue to increase faster than other health care expenditures, drug costs are a constant target for cost containment initiatives. The purpose of these guidelines is to provide guidance on medication-costmanagement strategies. These guidelines recommend techniques to manage drug costs in hospitals and health systems. The guidelines focus on drug use in inpatient settings and hospital clinics, where health-system pharmacies typically have responsibility for purchasing and distributing drugs. Strategies for other settings, such as managed care and ambulatory care settings, and strategies for revenue optimization are beyond the scope of this document. Although revenue optimization and medication cost management are complementary approaches to improving the financial performance of pharmacy departments, revenue optimization is best addressed through literature specific to that topic2,3 and is not extensively reviewed in this document. These guidelines examine methods for nonlabor pharmaceutical cost containment, focusing primarily on variable costs (costs dependent on patient volume) and direct drug costs. Fixed and indirect costs, such as labor to prepare or administer medication, nonpharmaceutical materials, and overhead, are also beyond the scope of these guidelines. There is also not an attempt to consider the impact of drug costs and drug-cost-management strategies on other hospital departments (e.g., laboratory, respiratory care) or on the total health care costs once the patient leaves the acute care setting. Although not discussed here, these shifts in drug costs are important to consider as drug therapies influence other health care costs, and pharmacists should lead efforts to promote the value medications provide across the hospital and health care system. A broad range of drug-cost-management strategies exist throughout hospitals and health systems. Some approaches are relatively straightforward and can be implemented within the pharmacy. Other approaches are more complex and require high-level strategic planning and extensive collaboration throughout the hospital. Successful drug cost management requires systematic attention to and integration of both approaches. Because of the different nature of various drug-costmanagement activities, these guidelines present information at different levels of complexity appropriate to the approach being described. When selecting and implementing drug-cost-management strategies, it is essential that pharmacists remain mindful of patient safety and the quality of patient care. Drug-cost-containment initiatives must never compromise the department’s ability to provide the best possible care to patients. In many cases, it is prudent and necessary to monitor and evaluate the safety and outcomes of drug-costmanagement projects. Fortunately, many drug-cost-containment strategies have little or no potential for detrimental effects on patient care, and efforts to improve the quality of drug use often coincide with cost-containment initiatives. Trends in Medication Expenditures