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CONTRACT and SOURCE

How ROi Addresses the Rising Cost of Pharmaceuticals

By Chris Little, PharmD, BCPS, Pharmacy Utilization Director
ROi Strategic Contracting & Sourcing 

 

It is no secret that over the past decade, prices in the pharmaceutical industry have trended upward. On a year-over-year basis, growth in drug expenditures keeps increasing at an alarming rate as we see mergers of manufacturers, delayed introductions of generic medications, and limitations in drug distribution. Facing novel therapeutic options, product shortages, and more, health care providers will have to innovate to control costs.

A major issue providers and health systems currently face in the pharmaceutical space is shortages. On any given day, between 75 and 80 drugs are listed on a variety of shortage lists nationally, forcing hospitals to face allocations, utilize comparable alternatives, or potentially go without necessary products. ROi has utilized relationships with members and suppliers to plan for shortages, set up allocations, and establish procurement strategies for comparable products.

Another obstacle is drugs and technology being introduced to the market for new therapies at exorbitant costs. Specific examples include novel therapeutic options to treat hepatitis C, breakthrough oncology regimens, and treatments for multiple sclerosis. Hospitals and heath systems are challenged not only by the costs of these new therapies but also by determining appropriate implementation strategies.

Always looking for ways to innovate, the ROi team actively reviews opportunities across drug therapies to determine whether modifications to normal practices can be made, in terms of how hospitals consume products and how those products are delivered to patients. 

Always looking for ways to innovate, the ROi team actively reviews opportunities across drug therapies to determine whether modifications to normal practices can be made, in terms of how hospitals consume products and how those products are delivered to patients. These opportunities can include using specific package sizes, drug strengths, and generic manufacturers that can provide significant cost savings. Additionally, the ROi team constantly reviews therapeutic regimens or treatment options to identify the agents or regimens that can provide the most value. The ROi team and members can leverage mutual interests when negotiating with other vendors and suppliers.

ROi has a service line to engage pharmacists throughout its membership. This service line provides an opportunity to align interests throughout the entire ROi membership and acts as a driving force behind our highly beneficial and compliant contracting opportunities. Additionally, ROi’s distribution center buys pharmaceuticals at standard quantities and then repackages them in a more cost-effective way so that members can order exactly the amounts they need when they need them. Smaller or rural hospitals used to have to buy in bulk and then see inventory go to waste. That is no longer the case.

ROi’s goal is to offer greater value to our members by innovating. Our team contracts, sources, and provides consultative resources. While many of these consultative services would incur an additional cost with other partners, they are a fundamental part of ROi’s integrated model at no cost to our members. Our team is also integrated into hospital committees and patient-care teams to offer an even higher level of service. Most important, our niche approach allows for intimacy with customers that a traditional GPO model cannot provide.

Learn more about ROi's Pharmacy Solutions >