Modelling strategies for reducing pharmaceutical costs in hospital

Objective. To describe drug utilization and cost in a large hospital and to compare the impact of different strategies on cost associated with drug pr escribing. Design. Retrospective data on drug utilization and cost, linked to patient clinical data and prescriber data from November 1998 were analyzed and mode lled. Main outcome measures. Impact of different strategies for cost control. Setting. A large hospital in Sydney, Australia. Results. The mean cost of drugs per episode of care was $28 Australian doll ars ($). Of all drug costs, 79% was incurred by medical units and 14% by su rgical units. Oncology accounted for 42% and inpatients for 91% of drug cos ts. Although section-100 (S-100) drugs incurred a high cost ($640) per epis ode of care, there were only 41 episodes where S-100 drugs (expensive, rest ricted drugs) were used, and the total cost of S-100 drugs was only 3.7% of the total cost to the hospital. Antibiotics were the most commonly prescri bed drug category, prescribed in 14% of all hospital episodes, and accounti ng for 14% of total drug costs. Anti-ulcer drugs were the next most costly group, accounting for 7% of total drug costs. Ao 20% reduction in use of an tibiotics would save four times that ($233 832 pa) of a 20% reduction in us e of S-100 drugs ($61392 pa). Discussion. Our study suggests that reducing inappropriate use of high volu me drugs such as antibiotics could be more effective in optimising health f acility drug budgets than attempts concentrating solely on reducing use of high cost drugs alone. Moreover our study suggests that systematic measurem ent of drug utilisation patterns is a key element of drug cost control stra tegies.