Premier Inc. expects pharmaceutical prices to rise 4.2 percent in fiscal 2020, up from the 3.8 percent inflation the company predicted in February.

The company said most of the overall rise in prices comes from new drugs, including cellular and gene therapies.

DSH-eligible hospitals are predicted to see a 3.8 percent in increase in pharmaceutical costs, Premier said. These hospitals receive discounted pricing to cover a higher percentage of uninsured patients.

“New drugs, while offering tremendous potential to cure or curb the spread of disease, are often introduced at price points that can have an adverse effect on health system margins,” said Michael Alkire, president for Premier.

Alkire said the company has been targeting ways to hold costs down by negotiating with manufacturers and pursuing new contracts. Premier also said it has been working with Congress and the White House to lower healthcare costs on a larger scale.

Premier is a healthcare company that works with more than 4,000 U.S. hospitals and more than 175,000 other provider organizations.

The company’s shares were trading at $35.16 on Wednesday, up $0.25.