A simple step to address pharmaceutical costs

Michael Moore’s summer hit “Sicko” has brought renewed attention to the flaws in the U.S. health system, including the high cost of prescription drugs. Here are just a few sobering statistics:

• One-fourth of adults 19 to 64 years old lack prescription drug insurance. Those without drug coverage are almost twice as likely not to fill a prescription due to cost.

• Spending in the U.S. for prescription drugs was $201 billion in 2005, almost five times more than the $40 billion spent in 1990.

• The number of prescriptions purchased increased 71 percent over the past decade compared to the U.S. population growth of 9 percent.

At a time when pharmaceuticals play such a key role in the treatment of patients, healthcare providers cannot keep up with the demand for expensive medications. Whether or not you agree with Mr. Moore’s politics or solutions to the healthcare crisis, it is clear our country needs to address the challenges of improving access to pharmaceutical care.

With spending on pharmaceuticals continuing to grow dramatically and the number of uninsured now reaching 47 million, the burden of providing pharmaceutical care to vulnerable patients falls increasingly on our nation’s hospitals, clinics and health centers, particularly those with a charitable care mission. Hospitals that serve high volumes of care to low-income and uninsured patients are able to obtain some relief on their pharmaceutical costs through a federal drug discount program operated by the Public Health Service called the 340B program. The 340B program enables hospitals, community health centers and other government-supported healthcare facilities to access significant discounts on pharmaceuticals. While the discounts through the 340B program are quite significant, they only apply to drugs used on an outpatient basis due to the way the 340B law was written in 1992. As a result, hospitals have to pay an average of 25 percent more for drugs given to patients that are admitted into their facility for an overnight stay. Not only does this result in higher pharmaceutical costs, but hospital pharmacies are also saddled with the burden of managing two pharmacy inventories. This forces hospitals to hire additional staff and purchase costly information systems instead of devoting resources to improving patient care and reducing long lines at the pharmacy counter.

Fortunately, there is an effort to address this problem and provide some assistance to our nation’s charitable hospitals. Bipartisan legislation has been introduced by Sens. Jeff Bingaman (D-N.M.) and John Thune (R-S.D.), and by Reps. Bobby Rush (D-Ill.), Bart Stupak (D-Mich.) and Jo Ann Emerson (R-Mo.) that would extend federal drug discounts to the inpatient setting for these charitable hospitals. The legislation would also create savings for the Medicaid program, the federal-state health insurance program for low-income and disabled patients, by requiring hospitals to share the savings with Medicaid. This legislation certainly would not solve our healthcare woes, but it would go a long way toward ensuring that safety net hospitals in this country can continue their mission of providing care to all patients regardless of their ability to pay.

Slafsky is executive director of Safety Net Hospitals for Pharmaceutical Access, a Washington, D.C.-based nonprofit organization of over 400 hospitals throughout the country that serve high volumes of care to low-income and uninsured patients.