TY - JOUR
T1 - Battered bottom lines
T2 - The impact of eroding pharmaceutical discounts on health-care institutions
AU - Palumbo, F. B.
AU - Schondelmeyer, S. W.
AU - Miller, D. W.
AU - Speedie, S. M.
PY - 1992
Y1 - 1992
N2 - For several years, the American Society of Hospital Pharmacists (ASHP) has voiced concern about the impact of federally mandated changes on the pharmaceutical products marketplace. Since this marketplace is relatively inelastic, manipulating one segment in the interest of cost efficiencies is likely to result in price increases in other segments. That manipulation could come through such decisions as a 'one-price' policy for pharmaceuticals, mandatory rebates for certain segments of the marketplace, or the elimination of discounts. The issue of cost-effective purchasing of prescription drugs and related supplies has recently come under increased scrutiny from the U.S. Congress, the Department of Health and Human Services, the General Accounting Office, and the Federal Trade Commission. In light of these and future activities, ASHP determined that there was a need to collect credible data on the potential impact of the termination of the Robinson- Patman Act's nonprofit institutional exemption, other discounts, or both on pharmaceutical expenditures in institutional health-care settings. The authors of this paper report the results and analysis of a 1990 mail survey conducted by ASHP and Concepts in Healthcare, Inc., to collect information on pharmaceutical purchasing and discounting procedures in community hospitals and selected nonhospital settings in the United States. Survey respondents reported that they would expect substantial increases in pharmaceutical expenditures if volume and nonprofit discounts were eliminated. Nonprofit hospitals expected a 24.4% increase in pharmaceutical expenditures in the wake of discount elimination, while for-profit institutions projected an 11.9% increase. Pharmaceutical expenditures of the study hospitals averaged $1.69 million per year; respondents estimated that this sum would increase by $390,000 (23.1%) if volume and nonprofit discounts were eliminated.
AB - For several years, the American Society of Hospital Pharmacists (ASHP) has voiced concern about the impact of federally mandated changes on the pharmaceutical products marketplace. Since this marketplace is relatively inelastic, manipulating one segment in the interest of cost efficiencies is likely to result in price increases in other segments. That manipulation could come through such decisions as a 'one-price' policy for pharmaceuticals, mandatory rebates for certain segments of the marketplace, or the elimination of discounts. The issue of cost-effective purchasing of prescription drugs and related supplies has recently come under increased scrutiny from the U.S. Congress, the Department of Health and Human Services, the General Accounting Office, and the Federal Trade Commission. In light of these and future activities, ASHP determined that there was a need to collect credible data on the potential impact of the termination of the Robinson- Patman Act's nonprofit institutional exemption, other discounts, or both on pharmaceutical expenditures in institutional health-care settings. The authors of this paper report the results and analysis of a 1990 mail survey conducted by ASHP and Concepts in Healthcare, Inc., to collect information on pharmaceutical purchasing and discounting procedures in community hospitals and selected nonhospital settings in the United States. Survey respondents reported that they would expect substantial increases in pharmaceutical expenditures if volume and nonprofit discounts were eliminated. Nonprofit hospitals expected a 24.4% increase in pharmaceutical expenditures in the wake of discount elimination, while for-profit institutions projected an 11.9% increase. Pharmaceutical expenditures of the study hospitals averaged $1.69 million per year; respondents estimated that this sum would increase by $390,000 (23.1%) if volume and nonprofit discounts were eliminated.
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U2 - 10.1093/ajhp/49.5.1177
DO - 10.1093/ajhp/49.5.1177
M3 - Article
C2 - 1595750
AN - SCOPUS:0026566337
SN - 0002-9289
VL - 49
SP - 1177
EP - 1185
JO - American Journal of Hospital Pharmacy
JF - American Journal of Hospital Pharmacy
IS - 5
ER -