Twice each year, Vizient releases its Pharmacy Market Outlook, a publication that includes drug pricing forecasts and insights into pharmaceutical trends and upcoming changes in the field.
Published July 27, the Summer 2022 Pharmacy Market Outlook highlights trends and projections starting Jan. 1, 2023. It includes a retrospective look at Vizient pharmacy program participants’ pharmaceutical spend data and makes 6–18-month projections using insights from the current healthcare landscape and anticipates challenges likely to affect the market during the projected timeframe.
Drugs by spend
The projected overall drug price inflation rate is 3.26%, highlighting a continued trend toward moderate price increases due to a balance of high-cost medications and the introduction of biosimilar competition in 2023.
“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.”
Across all classes of trade, the combined cost of adalimumab (Humira), remdesivir (Veklury), and pembrolizumab (Keytruda) totaled more than $3.5 billion in Vizient member spend.
The top 20 drugs ranked by spend make up a third of Vizient member spend. Since the previous Winter 2022 Pharmacy Market Outlook, six medications have increased in ranking, six decreased and six remained unchanged. Two new drugs joined the list: teprotumumab (Tepezza), used to treat thyroid eye disease, and daratumumab and hyaluronidase (Darzalex Faspro), an anti-cancer monoclonal antibody medication.
Remdesivir still tops the list for acute care, while Coagulation factor VIIa (NovoSeven RT) and Human PCC (Kcentra), both of which may be used for life-threatening bleeds and to reverse the effects of anticoagulants, moved up on the list due to increase in utilization and price. Dinutuximab (Unituxin), used to treat high-risk pediatric neuroblastoma, also went up, reflecting a 32% increase on the wholesale acquisition cost since 2018.
The entrance of biosimilar competition in non-acute care is anticipated to change the pharmaceutical market significantly, beginning with Adalimumab (Humira). As indicated in the graph above, Humira tops overall Vizient member spend and thus non-acute care spend. As many as eight biosimilars are expected to enter the market in 2023, with the first one, Amgen, as early as Jan. 31.
Ustekinumab (Stelara) is second, but, like Humira, is facing biosimilar competition, with an anticipated biosimilar hitting the market by 2024.
“Adalimumab accounts for 3.85% of all Vizient member spend, but as these new biosimilars enter the market, we’ll begin to see how members will shift their use and spend on the biologic, especially as new information around interchangeability becomes available,” said Lucio.
Specialty medications continue to represent the largest and fastest-growing area of prescription drug expenditures. The overall predicted inflation rate of 3.71% for specialty drugs for 2023 is above the overall projected inflation rate of 3.26%, representing a continued trend in the use and development of high-cost medications. These medications are primarily injectable and distributed through a retail pharmacy (45%) or ambulatory infusion clinic (55%).
Top therapeutic classes
The cardiology, dermatology, diabetes, oncology and pediatrics therapeutic classes are all anticipated to have a significant impact on health systems in the upcoming year due to changing guidelines, newly approved novel medications and a projected increase in diagnosis and utilization.
- Cardiology: Price inflation for pharmaceuticals in cardiology are expected to grow 3.19%, and will be driven by recent advancements in novel, high-cost preventative medications as well as updates in national guidelines 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 more of these high-cost novel medications are prescribed. Many dermatologic conditions are thought to be autoimmune, so treatment is focusing on the biologics and immunomodulator therapeutic class. These classes are projected to see pricing increase by 4.12% in 2023. Continued growth in spend for this service line is anticipated, driven by a projected 9% increase in outpatient utilization over the next 10 years, according to Sg2.
Diabetes: Pricing of diabetes medications will see a much lower rate of inflation (1.55%) than the overall rate. 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.
Oncology: Oncology drug spend in the United States is anticipated to reach $114 billion by 2026, and more than 100 new drugs are expected to be approved during this time frame. With this exponential growth, the projected inflation rate for this class is 3.38%, a bit above the overall projected inflation rate. That said, several of the legacy oncology medications that have traditionally topped member spend in oncology will be losing exclusivity as generic opportunities make their way into the market and drive down prices.
Pediatrics: The inflation rate in pediatrics is forecasted at 3.29%, a bit higher than the overall inflation rate of 3.26%. This increase in pricing is largely attributed to this year’s approved specialty and gene therapy drugs.
Read the Summer Pharmacy Market Outlook.