With drug prices increasing 7.3% a year, hospitals are doing everything they can to cut back on spending. Beyond finding ways to reduce costs—including increasing inventory transparency and proactively navigating drug shortages—industry leaders are working to extend existing drug inventories by verifying expiration dates.
A recent study by Lee Cantrell of the California Poison Control System, and Roy Gerona, a chemical researcher from University of California, San Francisco, actually tested the validity of expiration dates of prescription drugs.
The Cost of Expiration Dates
According to the study, each year the government loses somewhere between $600 million and $800 million to drug waste as a direct result of expiration dates. According to Cantrell and Gerona, each year, on average, a hospital throws out $200,000 worth of “expired” drugs whose shelf lives could be extended by at least six months. Not only does this waste money but it also wastes drugs that are critical to saving lives, such as EpiPens and sodium bicarbonate—an important drug used in heart surgery.
Using drugs with expiration dates of over 30 years past, Cantrell and Gerona discovered almost all tested drugs were found to have the same potency as when they were bottled. The results supported that not only may expired drugs be safe to use, but they may also be effective. Additionally, the test showed that the FDA’s way of testing shelf life—which often claims all drugs, of various chemical combinations, expire between 2-3 years—is inaccurate.
Despite the results of this study, the FDA refuses to extend expiration dates due to patient safety concerns. However, while hospitals can’t yet take advantage of these findings, the federal government has done so internally for the past 30 years.
Shelf Life Extension Program
This program, started in 1986 by the Air Force, extended drug expiration dates to save costs for the military. Other Federal Agencies, including the Centers for Disease Control and Prevention and the U.S. Department of Veterans Affairs, have also extended the shelf life of prescription drugs.
Additionally, the government revealed they have stockpiled drugs across the country in the event of a mass emergency and have extended the shelf life of these drugs for years. However, pharmacies continue to throw out identical drugs with differing expiration dates.
In the Future
The FDA has not commented on extending the Shelf Life Extension Program to the public at this time. If the FDA did apply the same extension policies to hospitals, it would radically disrupt drug-spending trends that have been shaping the hospital industry for decades.
However, more research is needed in this field. Cantrell and Gerona’s study is the first of its kind, providing interesting insights into drug expiration dates and overall healthcare efficiency. This study also begs the question of what would happen to drug pricing if hospitals’ ordering volume went down and how drug manufacturers would respond.