Rising Drug Costs

2017 - 4 August – Diversity
Lori Lynn Huang, BS, PharmD, BCPS, BCCCP; John J. Whitcomb, PhD, RN, CCRN, FCCM; John M. Allen, PharmD, BCPS, BCCCP, FCCM
This article addresses rising drug costs.

Pharmaceutical costs in the intensive care unit (ICU) account for a large portion of overall hospital drug costs. Recently, prices of medications that have historically been inexpensive have significantly increased. Numerous factors contribute to pharmaceutical cost increases in the ICU. We will provide some insight into the causes of these rising drug costs.

When a drug is initially approved for sale by the U.S. Food and Drug Administration (FDA), it is known as a single source brand drug. The drug manufacturer holds the patent and exclusive right to sell to consumers and can therefore charge a premium, making the drug more expensive. On average, drug patents last 20 years, and manufacturers typically earn significant profits while that drug is on patent.

Once a single source brand drug goes off patent, one of two scenarios occurs. In the first scenario, the FDA grants a single company the exclusive right to manufacture, distribute, market and sell a generic version of the drug. This drug is known as a single source generic, and the manufacturer has the sole right to produce the generic version within a time frame of six months to one year. However, since there is still only one company selling the drug, the cost is typically not significantly lower than the brand equivalent. The second scenario is when several drug companies design their own versions of the brand drug. At this point, the drug is known as a multiple source generic because a consumer can get the drug from several​ different manufacturers. Since there are several competing brands, competition drives the price down.

Examples of Changing Drug Prices in Critical Care
Reasons for recent drug price increases are varied. In June 2006, the FDA announced a new drug safety initiative to remove unapproved drugs from the market, thereby bringing all such drugs into the approval process. This initiative enabled manufacturers to claim FDAmandated exclusivity periods ranging from three to seven years with little change to traditional drugs. This led to dramatic increases in pricing for these “newly approved” drugs that had been used for many years. Examples of agents used in the ICU that were affected by this initiative include vasopressin, neostigmine, and colchicine.

Another reason for drug price increases was changes in generic drug ownership. When a company purchases a product from another manufacturer, a reduction in the total number of manufacturers may occur and, in severe cases, this may result in a single company monopolizing the market for that drug. A reduction in the number of manufacturers may result in a temporary or permanent drug shortage. Examples of drugs that have seen price increases as a result of this include sodium nitroprusside, isoproterenol, hydralazine, and norepinephrine.

Real-World Strategies to Reduce the Impact of Increasing Drug Prices
Several bills are currently before the U.S. Congress, including S 297 and HR 749, which would expedite the approval of an abbreviated new drug application when a drug is in short supply or when little or no competition exists. S 124, currently in the U.S. Senate, would prohibit manufacturers of brand-name drugs from paying manufacturers of generic drugs to delay introduction of a generic version of a drug. Many organizations support these bills, including one of the largest pharmacy practice organizations, the American Society of Health-System Pharmacists (ASHP).

Strategies to reduce the impact of increasing drug prices include the use of smaller bag sizes and concentrations to eliminate drug waste, the expanded use of less expensive agents with similar efficacy, the development of facility-specific clinical pathways to assure optimal drug use, and titrating off the medication that was initiated last. Table 1 lists strategies to reduce the use of high-cost medications in the ICU.

Another strategy is to perform a medication-use evaluation to develop approaches to reduce inappropriate drug use. These criteria should be developed by multiple stakeholders to improve buy-in and ultimately to implement successful drug reduction strategies.

In the published literature, this concept is supported by a recent report by Wu and colleagues based on a pre/ post intervention study of the effectiveness of instituting vasopressin use guidelines after the price increased significantly. The guidelines they developed reserved the use of vasopressin for patients with norepinephrine requirements greater than 50 µg/min. After instituting the local guidelines, the investigators noted savings of over $40,000 over a five-month period without negative effect on patient outcomes.1

Pharmaceutical costs in the ICU will continue to be a large portion of a hospital’s drug cost. Awareness of medication costs and the number of manufacturers producing these medications can help identify the most economical option. The Society of Critical Care Medicine has a drug shortage task force to disseminate management strategies. Additionally, the FDA and ASHP have websites listing current and resolved drug shortages. 

1. Wu JY, Stollings JL, Wheeler AP, Semler MW, Rice TW. Efficacy and outcomes after vasopressin guideline implementation in septic shock. Ann Pharmacother. 2016 Sep 14. [Epub ahead of print].