IRVING, Texas--(BUSINESS WIRE)--Vizient, Inc. has released its July 2019 Drug Price Forecast projecting health systems, including inpatient and non-acute environments, can 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. An executive summary of the Drug Price Forecast can be accessed here.
“This Drug Price Forecast predicts continued growth of pharmaceutical costs that far exceeds both inflation and wage growth, making healthcare less affordable. 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,” said Dan Kistner, group senior vice president, pharmacy solutions for Vizient.
Kistner also noted that increasing market competition is the single most effective way of controlling drug prices. “Nine of the top 10 drugs by total spend among Vizient members in 2020 will be branded biologics. Healthcare and pharmacy leaders must be cognizant of competition—in the form of generic drugs and biosimilars—and support their adoption as soon as they become available. Additionally, they must be aware of the regulatory trends that may impact competition and drug pricing in the future.”
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.
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. The Vizient membership includes a wide array of health care providers including the leading academic medical centers, pediatric facilities, community hospitals, integrated health system networks, and many nonacute practice settings. As a result, the forecast offers an assessment of a diverse landscape of pharmaceutical products contributing the most to total drug 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.
The Vizient Drug Price Forecast reflects the collective expertise of over two dozen employees of the Vizient pharmacy sourcing, analytics, clinical and consulting teams along with external resources, including its members. It 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. Vizient bases inflation estimates on price change history during the last 36 months, as well as current knowledge of contract allowances and marketplace factors such as expiring patents and anticipated new competition.
The forecast is an important resource for pharmacy leaders in developing annual budget projections for their health systems. Vizient conducts the pricing analysis biannually each year to provide insight on factors driving pricing and practice changes in the pharmaceutical industry. The forecast may be accessed here: https://www.vizientinc.com/-/media/documents/sitecorepublishingdocuments/public/july2019dpf_drugpriceforecast_public.pdf
Slides that summarize the key points in the forecast can be accessed here: https://www.vizientinc.com/-/media/documents/sitecorepublishingdocuments/public/july2019dpf_slides_summary_public.pdf
Vizient, Inc. provides solutions and services that improve the delivery of high-value care by aligning cost, quality and market performance for more than 50% of the nation’s acute care providers, which includes 95% of the nation’s academic medical centers, and more than 20% of ambulatory providers. Vizient provides expertise, analytics and advisory services, as well as a contract portfolio that represents more than $100 billion in annual purchasing volume, to improve patient outcomes and lower costs. Vizient has earned a World’s Most Ethical Company designation from the Ethisphere Institute every year since its inception. Headquartered in Irving, Texas, Vizient has offices throughout the United States. Learn more at www.vizientinc.com.