Indiana University Health’s new pharmaceutical hub and distribution center opened this summer in Plainfield.Indiana University’s hospital system anticipates the pharmacy hub will reduce the cost of pharmaceuticals to patients and insurance members by streamlining its supply chain. Photo courtesy of Google.

News Release

PLAINFIELD — Indiana University Health’s new pharmaceutical hub and distribution center opened this summer in Plainfield. The building is 70,000 square feet and is stocked with thousands of different pills, lotions, and infusible and injectable drugs that range from anxiety pills to cancer treatments.

Indiana University’s hospital system anticipates the pharmacy hub will reduce the cost of pharmaceuticals to patients and insurance members by streamlining its supply chain. As of now, it is unclear just how much prices may drop.

Hospitals mark up the price of medicine, especially specialty drugs. According to 2021 research conducted by Sanford Bernstein, across the country, hospitals consistently mark up prices of drugs an average of 250%, but some hospitals mark up as much as 500%.

In addition to cutting costs, the hub will be work to prevent shortages that keep patients from sticking to their medication regimens.

The hub cost the health system more than $30 million to build and stock. Indiana University Health estimates the hub will recoup that initial cost over five to 10 years.

IU Health is the largest hospital system in Indiana. The target of the hub is to allow IU Health more control over drug supply and costs. Every year, IU Health spends hundreds of millions of dollars on pharmaceuticals. Pharmaceuticals is one of the health system’s top expenses.

The new hub is currently the largest central pharmacy for a hospital system in Indiana. As of now, the hub employs 85 employees. However, IU Health expects to expand the employee roster to around 180 within the next three years.

However, IU Health is not the first hospital system to set up centralized distribution, in fact, many large U.S. hospital systems have made this move. Just last year, the Kentucky-based Baptist Health spend over $40 million to construct a 90,000-square-foot hub to serve its network’s nine hospitals.

In 2021, St. Louis-based Ascension, spent $8 million to establish a 30,000-square-root hub in Texas.

Pharmacy experts have applauded health systems that have centralized their pharmacies, citing it improved efficiency and patient safety.

The pièce de résistance of the hub is a central line that can fill up to 5,000 prescriptions in an eight-hour shift, which includes labeling and counting all pill orders. Once filled, the orders are then delivered directly to the patients’ doorstep or to hospitals’ pharmacies.

Before the hub, all prescriptions were filled by hand, a the rate of only 1,000 prescriptions per eight-hour shift.

Another groundbreaking feature is the utilization of a robotic drug storage system. The drug storage system is designed to store, retrieve and control the inventory.

IU Health already has plans to expand and improve. The health system is looking into the use of drones, which could help make deliveries or to move supplies.

With the implementation of the hub, pharmacists and pharmacy technicians are available to allocate more time in direct patient care and are no longer overcome with repetitive production work.

Every IU Health hospital in-house pharmacy will remain; however, it is expected some of the hospital’s inventory will shrink as the hub grows and expands.