A Review of Pharmaceutical Prices through a Partnership between Hospitals and Pharmaceutical Wholesalers: A Case Report of a Joint Research

Abstract

In hospital management, it is no secret that pharmaceuticals are second only to personnel costs when it comes to the highest expense items among medical costs and that the streamlining of pharmaceutical expenses is one of the major issues in hospital management. However, price negotiation for pharmaceutical supplies is generally made on the basis of the purchasing manager's experience and past purchase data, and there has been little by way of established, standard methods of calculating the prices of pharmaceutical supplies. In this study, we proposed to the pharmaceutical wholesalers trading with our hospital to review the delivery frequency and delivery method with a view to reducing their selling, general, and administrative costs (SG&A) and verified the reduction effect. The results showed a reduction effect of approximately 30 percent in their SG&A, and by negotiating the prices on the basis of these figures, we were able to establish supply prices beneficial to both parties. It is considered that there is a good chance of realizing higher efficiency of overall distribution and supply price optimization in other regions as well by applying the same method.