December 2015 Vol 8, No 9 - Editorial
David B. Nash, MD, MBA
American Health & Drug Benefits
Founding Dean
Jefferson College of Population Health
Philadelphia, PA

Careful readers know that I have been a member of Thomas Jefferson University Hospital’s (TJUH) Pharmacy and Therapeutics (P&T) committee for 25 years and have chaired one of the important subcommittees focused on pharmaceutical-related quality and safety. I’ve written extensively about my experience—in this journal1 and elsewhere.2 As acquisition costs for inpatient-related drugs continue to climb, it is time to revisit the work of an important committee outside of the P&T structure, namely, the PharmacoEconomics and Clinical Effectiveness (PEACE) committee. Before I outline some of our ongoing challenges, a brief history of the PEACE committee will provide a better understanding of its current context.

Every Joint Commission–accredited inpatient hospital is required to have a medical staff committee responsible for developing guidelines and recommendations for the appropriate use of pharmaceuticals. The safe use of these drugs is a high priority, but regrettably there is no mandate to focus on the cost of such products and their diffusion into clinical practice. Hence, in 2002, TJUH established the PEACE committee under the aegis of the hospital administration. Although medical staff members like me were appointed to this committee, its reporting structure went up through hospital administration to the chief executive officer of the institution.

It was a humbling experience to review the December 20, 2002, minutes of our inaugural meeting. Many of my clinical colleagues remain at Jefferson, whereas others have become leaders in major national systems. The original charge of the committee was to focus on high-volume and high-cost inpatient therapies. The overall goal was to address the redundant use of pharmaceuticals and to improve their appropriate use. The data for these kinds of valuations came from several sources, including the University HealthSystem Consortium (which is now known as UHC, and recently merged with the VHA [Voluntary Hospital Association]), national standards published in the peer-reviewed literature, and consensus papers that established best practice. In 2002, we defined a high-cost, high-impact drug as one with an acquisition cost of more than $100,000 annually, a drug cost exceeding $2000 per patient, or a drug cost exceeding $500 per dose. I am sure some readers are raising their eyebrows now, wishing for a day when those parameters could still be effectively utilized. Case in point, our acquisition cost for one of the recently discovered antiviral drugs for hepatitis is about to break the $10-million annual threshold.

So, where has the PEACE committee come in its 13-year history, and what are some of the challenges this committee will face in the future? With regard to drug spending, if we look at our university hospital and its 2 principal affiliates, Jefferson Hospital for Neurosurgery and the Methodist Hospital, in fiscal year 2015, the total acquisition costs topped out at more than $80 million. This includes all acute care inpatient purchases as well as the purchase price for infusion-related drugs used in hospital-owned sites, for areas such as neurology, oncology, and rheumatology. Let’s break down this total drug spend for fiscal year 2015 in several ways to better understand how care is being transformed in the inpatient setting.

When I arrived at TJUH in 1990 as a new assistant professor of medicine, anti-infective agents, specifically antibiotics, were in the top spot with regard to acquisition costs. They have subsequently been replaced by a category known as “blood formation coagulation and thrombosis.” In fiscal year 2015, Jefferson spent nearly $7 million in the acquisition cost for these drugs, making them the number one therapeutic category. Within this category, antihemorrhagic agents, such as NovoSeven RT, and antithrombotic agents are in the 2 top spots. This should not be a surprise to our readers, because the growth in antithrombotic agents has represented a key scientific breakthrough in the past decade in the treatment of deep vein thrombosis, moving largely from the inpatient setting to the outpatient setting.

The second most expensive therapeutic class encompasses anti-infective agents and, within this category, daptomycin is in the lead spot. Various antifungal agents, such as voriconazole, are also noted within this second therapeutic category. The third most expensive therapeutic class is the antineoplastic agents, with rituximab and carmustine representing a big chunk of the expense in this category. I could go on, but I believe our readers can get a good sense of how inpatient care has evolved over the past 2.5 decades that I have been in practice at our institution.

The advent of new federal programs such as the 340B Drug Pricing Program, a special program for disproportionate share institutions that care for indigent population, represents yet another challenge for the PEACE committee. Very briefly, the 340B program enables institutions such as TJUH to purchase discounted drugs for outpatient use with special rules and regulations. These regulations are concerned with the actual structure of the drug purchase, including the drug’s volume, its packaging, and related factors. Maintaining modern inpatient and outpatient pharmaceutical inventories is a new challenge faced by pharmacy directors and, in turn, members of the PEACE committee. Two questions coined by key staff persons involved are, “Do you buy what you end up billing for?” and, “Do you bill for what you end up buying?” Although the 340B program delivers great social benefit, the administrative costs are clearly nontrivial.

Let’s review, in broad terms, the results that our hardworking committee has achieved over its 13-year history. First, the very fact that such a committee exists says a good deal about our academic medical center’s commitment to self-reflection and ongoing evaluation. The members of the PEACE committee may have changed over the past 13 years, but its mission to boldly tackle cost data outside of the standard medical staff committee structure remains a top priority. Second, the committee has disseminated its findings widely across the institution, at the highest levels, and has helped us to better understand what we buy, why we purchase it, and how we use it. Regrettably, we cannot directly attribute patient-level improvements in outcome to the work of the committee, but I am confident that we have provided more of an evidence basis to our work.

The committee’s output has enabled decision makers within the pharmacy to be better stewards of our resources, and, where appropriate, to be more effective at negotiating with the various manufacturers, suppliers, and group purchasers of drugs used in our institution. As a major training site for colleges of medicine, nursing, and pharmacy, we also have an education obligation to ask the difficult questions about drug acquisition costs, diffusion into practice, and the appropriate use of limited resources.

The education mission is central to the work of the committee. In my view, one of the most important outputs of the committee is the opportunity to sit together and ask questions about what is around the next corner. The PEACE committee raised a flag regarding the purchase price of new antihepatitis drugs such as the combination of ledipasvir and sofosbuvir. The PEACE committee helps the medical staff to recognize the prominent role that antithrombotic agents play across nearly every specialty in the inpatient setting. This led to further evaluation of these drugs and the creation of key practice guidelines to rationalize their use based on the best available data.

There is no doubt that other expensive drugs are on the horizon, especially important new biologic therapies that require an intravenous infusion. The PEACE committee will be vigilant regarding the growth of these infusion drugs and will help the institution to contextualize their use and provide the medical staff with the best available current evidence to support high-quality, safe care.

Reaching 13 years is an important milestone. It has been a privilege for me to be a part of this activity since its inception. I would like to especially mention John Williamson, PharmD, MBA, a key pharmacy leader who has ably supported the PEACE committee in its work for a good portion of this time. I would also like to thank all of my colleagues on the PEACE committee, including the chief financial officer of our hospital, Neil Lubarsky, who always asks good questions, as a nonclinician, about how we use these expensive pharmaceuticals.

Does your institution have a PEACE committee or something similar? How do you create a safe environment for medical staff leaders to ask the difficult questions about formulary design and construction, as well as about the cost consequences of such work? As we proceed down the road, outlined by the passage of the Affordable Care Act, how will your institution grapple with a world focused on moving from the volume of services delivered to the value and the outcome of those services?

As always, I am interested in your views. You can reach me by e-mail at


1. Nash DB. Hardworking P&T committees. Am Health Drug Benefits. 2012;5(6):330.
2. Nash DB. Give PEACE a chance. P T. 2005;30:197.

Last modified: January 15, 2016
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