Pharmaceutical Costs

In Connecticut, hospitals know all too well the impact of the steadily rising cost of obtaining and supplying prescription drugs.

• Drug expenses remain a significant contributor to rising hospital operating costs in Connecticut. The most recent Connecticut analysis shows that operating expense per adjusted patient day remains elevated and continues to increase, driven in part by higher labor and drug expenses.
• Connecticut hospitals face particularly high drug costs. In 2024, drug expense per adjusted patient day in Connecticut reached $293, compared with $144 in the Northeast and $127 nationally.
• Those costs are also growing faster in Connecticut than regional and national benchmarks. Drug expenses per adjusted patient day increased 9.7% year over year, compared with 4.7% in the Northeast and 6.8% nationally (2024 data)
• Drug expense growth remains an ongoing challenge nationally and regionally. More recent Kaufman Hall data through April 2026 show that drug expenses continue to grow across hospitals in the Northeast and Mid-Atlantic, reinforcing that pharmaceutical costs remain a persistent pressure on hospital finances.
• National data similarly highlight pharmaceuticals as one of the fastest-growing components of hospital costs. According to the American Hospital Association, hospital spending on drugs increased 13.6% in 2025, approximately four times faster than growth in hospital prices. Rising costs reflect both price increases for existing medications and the adoption of new, high-cost therapies, including oncology and other specialty drugs. Academic medical centers, which care for many of the most complex patients, saw drug expenses increase 21.6% in 2025. 

Drug Costs Have Been Straining Hospitals for Years

Rising operating expenses — including the cost of drugs, medical equipment, and supplies — continue to hit Connecticut harder than other states. At the same time, Medicaid and Medicare reimbursement rates are not keeping pace with the cost of care, and hospitals are shouldering the financial burden. These year-over-year losses are unsustainable.