Since CompleteRx manages hospital pharmacies, large and small, across the U.S., it stands in a unique position to understand and cope with the industry’s most compelling trends. Recently, Rick Burnett, our chief operating officer, outlined his thoughts on the top trends likely to impact hospital pharmacies in 2019.
#1 – Specialty pharmaceuticals will continue to grow.
Specialty drugs currently account for approximately 43% of ambulatory pharmacy drug expenses. Unfortunately, these medications are also very expensive.
The definition of what constitutes a specialty drug continues to evolve, but generally specialty drugs are high cost medications used to treat complex conditions. This category of medication usually requires special handling or are used to treat rare or chronic conditions such as autoimmune diseases (e.g. rheumatoid arthritis), hepatitis C, and certain cancers.
Pharmaceutical manufacturers are focusing their research and development efforts on specialty drugs because they are more lucrative than other categories of medicines. In fact, one study found that the average cost of specialty therapy is more three times higher than the average social security benefit and twice the median income for someone on Medicare.
These high costs can make the medications unaffordable for some patients which will increase costs for many self-insured plans.
#2 – 340B looks safe…for now.
The Trump administration’s 340B proposed rules would have cut $1.6 billion dollars from the 340B program. However, a recent court ruling blocked the administration’s move, which was good news for not-for-profit entities participating in the program.
Regardless, it is still critical that hospitals comply with current program requirements. In 2018 HRSA conducted 162 audits of its participating locations. The survey found that facilities with a large number of contract pharmacies tended to have more exposure for non-compliance due to the number of patients participating and data transactions involved.
Having a sustainable, self-auditing system, maintained by pharmacy personnel with a specialized understanding of 340B rules, procedure requirements and data systems, will help these hospitals ensure an ongoing state of compliance and hopefully provide the ability to react more quickly should 340B rules change.
#3 Minimum wage laws will put pressure on pharmacy labor costs.
States and municipalities across the U.S. are increasing their minimum wage requirements, which will continue to drive up pharmacy technician wages.
In 2018, 29 states paid a minimum wage higher than the federally required $7.25 per hour, and in 2019, even more states followed this trend. Certain areas such as New York, California, and Massachusetts have passed legislation mandating a $15-hour minimum wage. Several others require $12-$13.50 an hour minimum.
As unskilled labor pools gradually pay these higher wages, we can expect hospital pharmacy technicians to command higher rates, since technicians require specialized training and certifications to assist pharmacists in providing patient care.
In 2018, the average pay rate for a hospital pharmacy technician was $15.16 per hour, a number we estimate may increase to as much as $23 per hour in order for pharmacies to hire and retain qualified individuals.
Maintaining appropriate pharmacist-to-technician ratios and optimizing productivity through automation and technology will be critical to help offset these increased labor expenses.
#4 Sterile and hazardous compounding areas will get extra scrutiny.
The United States Pharmacopeia Convention (USP) is a nongovernmental scientific body responsible for setting standards for drug quality and related practices. USP recently published new standards for the sterile compounding of both non-hazardous (USP <797>) and hazardous (USP <800>) products.
The new standards will require changes to sterile product compounding rooms, additional training, and increased documentation. The new requirements will also require significant investments in time and money. In addition, hospitals will be expected to have a medical surveillance program in place as part of a comprehensive exposure control program.
Ensuring ongoing compliance and surveillance will be critical to ensuring patient safety and protecting the health of pharmacy personnel, other health care providers, and others exposed to hazardous medication.
The new changes were slated to become enforceable on July 1, 2018, but USP announced in September that it would postpone the date to December 1, 2019. Hospitals however, can anticipate that accreditation surveyors will focus on USP <797> and <800> compliance during their next site visits.
#5 The need to control costs will continue.
All signs indicate that drug prices will continue to escalate, putting ever greater focus on optimizing pharmacy costs.
Further, many states such as California, and cities such as New York, are proposing legislation to provide a version of Medicare for all residents. These increases in costs coupled with declining reimbursements and more patients accessing services will require hospitals to find a sustainable system for managing drug costs.
Pharmacy costs can be managed through a best-practices, metrics driven approach to drug and labor expenses. Hospitals should also consider deploying pharmacy staff to functions which will help increase reimbursements from value-based purchasing incentives, reduce readmissions, enhance patient safety, and improve nurse productivity.
By Rick Burnett, Pharm.D., FACHE, chief operating officer for CompleteRx.