Vizient, Inc. released its Summer 2022 Pharmacy Market Outlook forecasting a 3.26% overall drug price inflation rate for the calendar year beginning Jan. 1, 2023.
The rate reflects a continued trend toward moderation of the overall increase in drug prices, a result of the balance between the increased use of high-cost medications, the introduction of lower-cost generic drugs and greater utilization of biosimilars.
“The inflation rate currently being seen in other sectors may not seem reflected in pharmaceuticals, but it’s important to note that drug manufacturers regularly increase their prices, especially on branded drugs, irrespective of overall economic trends,” said Steven Lucio, senior principal, pharmacy solutions. “Additionally, the price reductions brought by generic and biosimilar drugs partially offset brand-name drug price increases, which helps moderate overall drug cost increases for hospitals. With those balancing factors, we project an aggregate 3.26% drug price increase for 2023.”
Remdesivir (brand name Veklury), an anti-viral drug approved by the U.S. Food and Drug Administration in 2020 for the treatment of COVID-19, soared to the top of Vizient member spend as noted in the Winter 2022 Pharmacy Market Outlook, reflecting COVID’s impact on healthcare organizations. Data from Vizient member spend and the Vizient Clinical Data Base indicate a decrease in its utilization, pushing adalimumab (brand name Humira®) back to No. 1 in total member purchasing volume.
Next year, Humira, used in the treatment of rheumatoid arthritis, will face competition from numerous biosimilars poised to enter the market. With its loss in exclusivity, treatment costs are expected to come down. Similarly, vasopressin, used in the treatment of diabetes and No. 11 in Vizient member spend, is expected to continue to fall in its ranking after generic products at roughly one-third the wholesale acquisition cost (WAC) came to market earlier this year. Because the Pharmacy Market Outlook is an analysis of annual historical purchasing data reviewed approximately three months before the date of its release, those impacts will be seen in future editions of the report. Other notable findings include:
· Cardiology: Cardiology makes its debut in the report to highlight recent advancements in preventative medication. Spend for pharmaceuticals in this class is expected to grow 3.19%, and will be driven by novel, high-cost medications as well as recent national guideline updates heightening the need to slow disease progression.
· Dermatology: With an estimated 17 million patients living with atopic dermatitis and four new brand-name drugs coming to market, spend for dermatology is expected to increase as these high-cost agents are used instead of generic topicals. Dermatology is part of the biologics and immunomodulator therapeutic class, which is projected to see spending increase by 4.12% in 2023. Vizient anticipates continued growth in spend for this service line, driven by a projected 9% increase in outpatient utilization over the next 10 years, according to Sg2, a Vizient company.
· Diabetes: Spending on diabetes medications will see a much lower rate of inflation than the overall rate (1.55%). The increased use of more cost-effective biosimilars has knocked insulin glargine from the top ranking of member spend in this category, a trend that is expected to continue as more institutions begin using biosimilar alternatives. With 28.7 million Americans diagnosed with diabetes and 96 million with prediabetes according to the Centers for Disease Control and Prevention, managing this disease is imperative.
The semi-annual Pharmacy Market Outlook provides a drug price projection for the year beginning Jan. 1, 2023. Projections are based on an analysis of Vizient member purchasing data and WAC for pharmaceutical products. Learn more about the Pharmacy Market Outlook.