Premier Inc. Projects 3.8 Percent Price Inflation for Pharmaceuticals

Premier Inc. (NASDAQ: PINC), a leading healthcare improvement company, today released its inflation estimates for contracted and non-contracted pharmaceutical pricing for fiscal year 2020 (July 2019 – June 2020), projecting a 3.8 percent increase in total pharmaceutical costs. This inflation rate is approximately 0.4 percent lower than Premier’s fiscal year 2019 projections.

“Premier’s superior pharmacy contracting team has been able to secure industry-leading pricing across our portfolio, saving our members millions over last year’s estimates,” said Michael J. Alkire, Chief Operating Officer, Premier. “As health systems face increasing financial pressures and compressing margins, we are thrilled to provide these savings to our members.”

Premier forecasts a 2 percent increase in inpatient pharmaceutical costs and a 5.3 percent increase in non-acute items, resulting in a weighted, blended inflation rate of 3.8 percent. Most of the inflation is on non-contracted items, which are typically on-patent, branded pharmaceuticals that do not go through the competitive group purchasing process. For on-contract purchases, Premier projects a net decrease of 0.2 percent, including for drugs currently in shortage, which historically have been subject to pricing spikes when there is a lack of competition in the market.

“These inflation figures prove that a competitive process for price negotiations with pharmaceutical manufacturers can make a tremendous difference for hospitals and health systems,” Alkire added. “By initiating competition between manufacturers for group purchasing contracts, we believe Premier is able to extract best-in-class deals and provide market-leading pricing for our members. Considering the financial pressures facing hospitals and health systems, such as diminishing reimbursement, these aggregate savings are essential to preserving margin and ensuring overall financial health.”

Premier conducted the inflation analysis using its Drug Budget Development tool. The tool provides pricing information on health system pharmaceutical purchases and can be used by pharmacists to develop accurate forecasts and budgets for the coming year using their facility-specific purchasing information.

Forward-Looking Statements

Matters discussed in this release that are not statements of historical or current facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Premier to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. Accordingly, readers should not place undue reliance on any forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements in the conditional or future tenses or that include terms such as “believes,” “belief,” “expects,” “estimates,” “intends,” “anticipates” or “plans” to be uncertain and forward-looking. Forward-looking statements may include comments as to Premier’s beliefs and expectations as to future events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside Premier’s control. More information on potential factors that could affect Premier’s financial results is included from time to time in the “Forward Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Premier’s periodic and current filings with the SEC and available on Premier’s website at investors.premierinc.com. Forward-looking statements speak only as of the date they are made. Premier undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date.