IRVING, Texas--(BUSINESS WIRE)--Vizient, Inc. has released its July 2017 Drug Price Forecast. An executive summary of the Drug Price Forecast can be accessed here. The report provides pharmacy leaders and health system executives with the latest information and insight on factors driving pricing and practice changes in the pharmaceutical industry. The forecast also serves as a key tool for Vizient members in the development of annual budget projections for their health systems.
Vizient estimates that for pharmaceutical purchases made from Jan. 1, 2018 to Dec. 31, 2018, health systems can expect a 7.61 percent increase in price. The forecast is focused on pharmaceutical use in both hospital and non-acute settings. Vizient bases inflation estimates for the forecast period on past price change history during the last 36 months where available, as well as current knowledge of contract allowances and marketplace factors such as expiring patents and anticipated new competition — along with experience — to develop a projected inflation estimate.
“The latest Drug Price Forecast highlights numerous market dynamics that continue to contribute to rising pharmaceutical costs and exacerbate the challenge of managing health system pharmacy expenses,” said Dan Kistner, senior vice president, pharmacy solutions for Vizient. “Pharmacy leaders – now more than ever – must be proactive and strategically plan to address these issues and implement cost-saving and quality optimization measures.”
In addition to the pricing projections that affect a health system’s pharmacy budget, the Drug Price Forecast also offers insight into topics such as biosimilars, drug shortages, and orphan drugs, as well as a timeline of anticipated major events that will affect pharmacy practice in the coming months and years. These insights, as well as recommended strategies in the report, are intended to help hospitals navigate anticipated pharmaceutical trends over the next six to 18 months.
Highlights from the forecast report include:
- Biosimilars on the tipping point: In the seven years since the U.S. Food and Drug Administration (FDA) gained the authority to approve biosimilars, only two have reached the market. That could all change very soon, with potentially 10 biosimilars gaining approval by the end of the year. But we’re not out of the woods: insurers can still choose to reimburse originators more favorably than biosimilars, and legal hurdles remain which slow the pace of biosimilars entering the market.
- Orphan drugs – balancing patient benefits with extraordinary prices: The world’s 10 most expensive drugs are all orphan drugs. Mounting evidence suggests health care systems may be missing out on the intended purpose of the Orphan Drug Act (ODA), (i.e., developing drugs that may not be profitable but treat life-threatening rare diseases). Instead, therapies for extremely limited populations are continuing to be introduced at ever higher prices and limit access to the very patient groups for which these treatments are intended. In addition, certain suppliers appear to be engaging in practices such as repurposing mass-market drugs as orphan drugs, disease slicing, repurposing old compounds, and off-label use. Legislation to remedy this issue could result from a Government Accountability Office investigation. This dynamic further illustrates the need for additional industry solutions such as value-based payment models for all medications.
- Drug shortages are still here, unfortunately: While drug shortages have been on the decline over the last few years, the market could see a reversal of that trend. Ongoing manufacturing and quality problems have recently contributed to significant shortages of life-saving drugs like dextrose, sodium bicarbonate, calcium chloride and epinephrine. Solving this issue will be complicated and will require action by many parts of the health care landscape. The FDA’s recent hearing on the Hatch-Waxman Act will hopefully lead to meaningful strategies that can address the financial, regulatory, and market concerns that contribute to the instability of the supply chain for these drugs. Regardless, pharmacists must continue to invest time and attention towards the careful conservation of certain critical drugs.
The Drug Price Forecast is based on the analysis of data from Vizient’s Pharmacy Program, which compiles member participants’ purchases (price and volume) in hospital and non-acute care settings.
About Vizient, Inc.
Vizient, Inc., the largest member-driven health care performance improvement company in the country, provides innovative data-driven solutions, expertise and collaborative opportunities that lead to improved patient outcomes and lower costs. Vizient’s diverse membership base includes academic medical centers, pediatric facilities, community hospitals, integrated health delivery networks and non-acute health care providers and represents more than $100 billion in annual purchasing volume. The Vizient brand identity represents the integration of VHA Inc., University HealthSystem Consortium and Novation, which combined in 2015, as well as MedAssets’ Spend and Clinical Resource Management (SCM) segment, including Sg2, which was acquired in 2016. In 2017, Vizient again received a World’s Most Ethical Company designation from the Ethisphere Institute. Vizient’s headquarters are in Irving, Texas, with locations in Chicago and other cities across the United States. Please visit www.vizientinc.com as well as our newsroom, blog, Twitter, LinkedIn and YouTube pages for more information about the company.