Unit-dose medication packaging has been a standard practice for hospital pharmacies since the late 1960s. Since then, pharmaceutical manufacturers and wholesalers have consolidated, and as a result, so too have the many unit-dose lines available to hospital pharmacies. This has directly caused price increases on unit-dose products, and it has effectively limited the choices between product lines.
In conjunction, hospitals and hospital pharmacies are more reliant than ever on unit-dose medications. This is due to the expansion of the decentralized pharmacy models and the modern prevalence of automated dispensing cabinets, as well as the upstart of patient safety initiatives that scan individual unit-dose medications at the patient bedside in hopes of reducing patient administration errors.
Together, those factors put hospital pharmacy managers in a difficult position: They are expected to dispense medications in unit-dose format despite the ever-increasing expense of doing so.
The Rising Cost of Medication
The cost of medication is steadily rising at a rate faster than inflation can account for, and as a result, the premium price of commercial unit-dose medications from manufacturers is growing as well.
According to a survey conducted by Bloomberg, the cost of 60 prescription drugs rose twofold over the course of 12 months, while another 20 medications' prices almost quadrupled during the same time period.
"Branded pharmaceutical prices increased 14.77% since 2015."
"Skyrocket" doesn't even begin to describe how fast drugmakers have inflated their prices. Numerous reports explain that brand-name, generics and even life-saving medications are sold for disproportionately high costs when compared to inflation. The Washington Post reported that generic drugs cost 2.93 percent more in 2016 than in 2015, while specialty medications are now 9.21 percent more expensive and branded pharmaceuticals saw their prices increase 14.77 percent.
Suffice it to say, unit-dose medications are equally affected by these pricing models. In fact, Kate Schroder, an interim worker in the United Kingdom's health care industry, pointed out that unit doses are more expensive that buying in bulk, in a LinkedIn Pulse blog post.
"Per-unit pricing … lets manufacturers increase prices by expanding the highest-cost single-use container price across an entire product line…" Schroder wrote.
The financial impact of increased unit dose pricing in the U.S. is even greater as our country's hospital pharmacy operation and patient care model is completely beholden to unit-dose products to ensure quality and patient safety.
A Costly Balancing Act
It's clear that buying most drugs on-contract in bulk is cheaper. Drugmakers typically offer drugs at lower per-dose prices when purchased in the larger, bulk quantities – which are geared more toward the larger retail market – since they have lower production costs for the manufacturer.
To balance the lower-cost option of buying medications in bulk with the necessity of providing treatment in unit-dose format, hospital pharmacies are forced to invest and have the capabilities to repackage bulk manufacturer medications (oral solids and oral liquids) into a unit-dose format – but this is much easier said than done.
Today, there is much-added complexity for hospital pharmacies that self-package to ensure bulk products are repackaged correctly into unit dose. They must:
- Have correct bar code formats and content.
- Be set up in their pharmacy system.
- Be checked by a pharmacist.
- Ensure proper dosing.
- Provide label information.
- Indicate expiration dates.
And that all needs to be completed while hospital pharmacy workloads and costs continue to increase and hospital budgets and reimbursements keep decreasing.
Most hospital pharmacies have been buying in bulk and repackaging into unit dose over the years because they've had to – to ensure all of their medications are dispensed in unit dose format, but also to help mitigate the ever-increasing cost of unit-dose medications. Unfortunately, for the reasons outlined above, this process is no longer the economically viable solution it once was.
Not as simple as it seems
By packaging internally, hospital pharmacies may be increasing their spending with respect to prescription drugs and other medications – at the very least, they are breaking even with costs of manufacturer-provided unit doses. Those organizations should consider the expense of paying employees to repackage drugs and the materials necessary to do so, as well. Furthermore, the price of equipment and machinery and the cost of maintaining those tools adds up quickly. As a result, McKesson concluded that purchasing in bulk and repackaging internally is only cost-efficient if the price differential is close to or exceeds $0.20 per dose.
The process of buying medications in bulk and packaging within hospital pharmacies is no longer the obvious option. There is a more cost-effective and higher-quality method for repackaging pharmaceuticals: a trusted, qualified and proven hospital outsourcing repackaging partner.
"External repackaging helps execute a cost-savings program without additional spending."
A cost-effective, quality-focused solution
Finding a proven, external packaging solution can help hospital pharmacies execute a cost-savings program where they can purchase more on-contract bulk medications without needing additional internal resources to assemble into unit-dose formats.
Writing for Pharmacy Purchasing & Products Magazine, Noel Hodges recommended that pharmacists compare the price of packaging internally with doing so externally in an "apples-to-apples" manner, as outsourced repackaging providers not only negate the need for extra resources, but they also offer better quality assurance.
So, beyond sheer cost, Hodges pointed out that "Quality is perhaps the hardest thing to put a price tag on." This only supports the fact that outsourcing is a more cost-effective solution for repackaging bulk drugs since qualified FDA-registered firms package medications while compliant with cGMP standards.
Pharmacy managers have the right mindset to purchase more of their drug needs at the lowest possible cost per dose by relying on on-contract, bulk items. But by repackaging bulk quantities into unit-dose format within their pharmacy, they're left where they started: with higher costs and internal resources. such as personnel, stretched thin.
Therefore, an increasingly popular answer to the ever-rising cost of prescription drugs and other medications for hospitals is to rely on a trusted and qualified third-party outsourced packaging provider like Safecor Health.
Start purchasing at the lowest cost-per-dose price and solve the majority of your unit-dose repackaging and bar coding requirements by contacting a Safecor Health representative today.