Prices for pharmaceuticals are projected to rise by 4.92 percent in 2019, down from an estimated 7.61 percent in 2018
IRVING, Texas--(BUSINESS WIRE)--Vizient, Inc. released today its latest 2018 Drug Price Forecast, which estimates health systems can expect a 4.92 percent increase in the price of pharmaceuticals in 2019. This estimate represents an anticipated slower rate of growth as compared to previous Vizient forecasts, such as the 7.61 percent value projected for 2018.
Although the rate of price increases is projected to slow, the specialty pharmacy market is expected to continue its rapid pace of growth, which accounts for the majority of overall price inflation. According to a recent industry analysis, specialty pharmaceuticals now account for more than 46 percent of the total spend on drugs in the U.S., in spite of being used for very small and targeted patient populations.
“While the projected increase for 2019 is less than 2018, it is still growing quickly,” said Dan Kistner, Pharm.D., senior vice president, pharmacy solutions for Vizient. “Two key themes we saw were the continued growth of specialty pharmacy products as a share of total spending and the critical importance of ongoing, robust generic and biosimilar competition on restraining overall price growth.”
The Drug Price Forecast was compiled by Vizient, the largest member-driven health care performance improvement company in the country, with a membership base that includes academic medical centers, pediatric facilities, community hospitals, integrated health delivery networks and non-acute health care providers, and represents approximately $100 billion in annual healthcare purchasing volume. An executive summary can be accessed here.
Vizient’s Forecast notes that there have been several positive developments since the last report, including improvements in specialty pharmacy management and increased government attention to cost issues. However, several ongoing challenges remain, such as unsustainable introductory costs for new drugs, the opioid addiction crisis, supply chain interruptions and reimbursement issues that continue to drive price inflation.
“Our Drug Price Forecast is an essential resource for health system leaders who need a reliable assessment of pharmacy pricing trends in order to anticipate and adapt to the specific and overall challenges in drug pricing,” said Kistner. “In an analysis of the previous Drug Price Forecast overall price projections, we found our estimates to be within one percentage point of actual inflation rates.”
In addition to the pricing projections, the executive summary of the Drug Price Forecast offers insights into topics such as specialty pharmaceuticals, oncology drugs, infection disease agents and drug shortages, as well as a timeline of anticipated major events that will affect pharmacy practice in the coming months.
Highlights from the report include:
- Generics and Biosimilars: The introduction of market competition in the form of new biosimilar and generic drugs has been the primary mechanism for containing drug spending. In fact, 79% of our projected price inflation will be caused by drugs with no competition. Unfortunately, biosimilar adoption is still low. For example, biosimilars only represent 3% of the infliximab market, one of the most commonly used biologics in clinical practice.
- Drug Shortages: While drug shortages appear to have peaked, the total number is not trending down. In a collision of crises, the DEA’s efforts to limit opioid quotas has inadvertently exacerbated the overall drug shortage problem. Beyond understanding the impact and causes of drug shortages, Vizient works to lessen the negative impacts of shortages for member hospitals through education, communication and advocacy efforts.
- Specialty Pharmaceuticals: The medications that account for the greatest proportion of spending are concentrated in therapeutic classes, such as drugs that treat multiple sclerosis, hepatitis C and cancer, as well as disease-modifying anti-rheumatic drugs (DMARDs).
The Vizient Drug Price Forecast reflects the collective expertise of over two dozen employees of the Vizient pharmacy sourcing and clinical 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.
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 approximately $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 2018, 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.