Vizient, Inc. has released its July 2019 Drug Price Forecast projecting health systems, including inpatient and non-acute environments and says expect a 4.57 percent increase for pharmaceutical purchases made from Jan. 1, 2020 to Dec. 31, 2020. The forecast also includes projections for specialty pharmacy and pediatric-specific medications.
“This Drug Price Forecast predicts continued growth of pharmaceutical costs that far exceeds both inflation and wage growth, making healthcare less affordable,” said Dan Kistner, Group Senior Vice President, Pharmacy Solutions for Vizient, in the news release. “It also shows that the cost of pharmaceuticals continues to account for a large share of every healthcare organization’s budget and this trend is unlikely to change.”
The Vizient Drug Price Forecast is a detailed analysis and projection of anticipated trends in pharmaceutical pricing based upon the purchasing patterns of its member organizations.
When considering the forecast, Kistner said it is also important to remember the changing landscape of the ‘hospital’ market. “Hospitals are no longer strictly focused on inpatient/acute care services. They are also offering numerous services in the non-acute setting such as outpatient infusions, home infusion, and most importantly specialty pharmacy services. Therefore, the spend profile of our members now includes the new, increasingly specialized medications approved by FDA, which tend to be among the most costly products introduced into practice.”
The latest forecast specifically calls out that oncology medications, disease-modifying agents and immunomodulatory agents continue to account for the majority of health system pharmacy spend.
Highlights from the forecast report include:
· Specialty drug price inflation is predicted to be 4.23 percent. Overall, the total specialty inflation rate is similar to the general drug inflation rate of 4.57 percent predicted for the 2020 time period. However, this new price projection is important for health system leaders since prices of specialty drugs tend to outweigh prices for non-specialty medications. This inflation rate will likely result in the need for providers to increase their drug budgets in the coming year.
·The composition of the U.S. biosimilars market could change dramatically in the very near future. As of July 2019, the FDA has approved 22 biosimilars, with seven available in the market. Additionally, the most relevant patents protecting rituximab, bevacizumab and trastuzumab will expire during the third quarter of 2019. These biologics presently account for over $10 billion in spend across the U.S. health care system.
· Drug shortages compromise patient care and contribute to higher costs, both direct and indirect. Vizient conducted a national survey of its members in March and April 2019 to get a contemporary assessment of how drug shortages are currently impacting our members. Based on the responses from approximately 365 hospitals and health systems the total cost of increased labor is calculated to be a staggering $359 million, equating to over 8 million labor hours that are dedicated to managing drug shortages in U.S. hospitals.
· Providers treating leukemia patients will experience higher costs as the standard of care shifts to new therapy combinations. Recent advances in the sequencing of many cancer genomes has inspired an explosion in drug development for acute myeloid leukemia (AML) and chronic lymphocytic leukemia (CLL), dramatically increasing the number of options for patients at all stages of treatment. While these advances promise choices and potentially improved outcomes, providers and patients will experience a financial impact due to the standard of care shifting from mostly inexpensive, generic agents to combinations of branded targeted agents.
· Supply challenges in the Immune globulin intravenous (IgIV) market will continue and prices are expected to steadily rise. Vizient anticipates that supply of IgIV will continue to be limited for the remainder of 2019 and into the first half of 2020 as manufacturers work to increase production to meet higher-than-expected demand. New entrants into the market are not anticipated to have a large effect on supply and prices are expected to rise steadily in the coming year for immunoglobulin products, while albumin, for which supply remains abundant, will likely see price reductions.