IRVING, Texas (BUSINESS WIRE), November 23, 2020 - An updated analysis by Vizient, Inc. demonstrates again that ending the Food and Drug Administration’s (FDA) Unapproved Drugs Initiative (UDI), as President Trump recently announced he intended to do, could save the U.S. health care system billions of dollars. Vizient estimates that there are 18 drugs that still could be approved through the program, which based on a modest analysis would add $7.52 billion to U.S. health care costs if drug manufacturers continue to take increases over the next five years of potential market exclusivity as allowed by the UDI. A further $19.07 billion could be saved by ending the market exclusivity for the five drugs approved through the program that have already added $3.15 billion in spending. See analysis here.
The initial analysis, which was shared with senior officials at the Department of Health and Human Services in March, illustrated how the increases in costs are an unintended consequence of the UDI, launched in 2006. This analysis, which incorporates an additional seven months of market data, confirms that the total the program, if left unchanged, would add $29.7 billion in healthcare costs.
In one notable example, vasopressin, which had already experienced price increases as high as 1,644% as noted in Vizient’s February analysis, saw further utilization increases that added another $281 million in estimated annual spending for a drug first developed in 1928. Most recently, Tralement, an injectable multivitamin of trace minerals necessary for patients who require intravenous administration of nutrition, was approved under this program in July and launched with a 72% increase in price.
“Vizient has been working to bring attention to this issue for several months. There are several manufacturers awaiting a UDI decision right now. If the program remains in place, the U.S. health care system could end up spending an extra $29.7 billion on 23 drugs that have been safely and effectively used in hospitals, some for more than 50 years,” said Dan Kistner, PharmD, group senior vice president, pharmacy solutions for Vizient.
The agency’s intent was to require manufacturers of these drugs, which have been marketed for decades, to gain FDA approval or remove them from the market. This approval gives patients and providers confidence that the pharmaceuticals they are using have been shown to be safe and effective. While that goal is appropriate, the pricing behavior of certain manufacturers of these now formally licensed drugs is creating negative financial consequences for provider institutions.
“We fully support the elimination of the UDI due to these unintended consequences of FDA’s good intentions,” said Kistner. “With patients and providers being put under increasing pressure by the financial burden of COVID-19, these savings will be incredibly important. It is also imperative that additional manufacturers are encouraged to enter the market for the already approved drugs to increase competition and reduce vulnerability to supply disruptions.”
As part of its analysis, Vizient reviewed the pricing history of five drugs that have been approved by the FDA through the UDI process since 2013.
- Neostigmine methylsulfate, commonly used to reverse the effects of paralytics used during anesthesia. During its period of market exclusivity, wholesale acquisition cost (WAC) increased by as much as 525% and annual U.S. health care spend increased from $60.6 million to an average of $205.8 million. Market analysis estimates the total increase in U.S. health care spend was $876 million.
- Vasopressin to Vasostrict, a medication to treat critically low blood pressure. Received patent approval with market exclusivity currently projected to last through 2035. WAC has increased as high as 1,644%, and the estimated U.S. health care spend increased from $30.8 million annually to $791 million in 2020. Market analysis estimates an increase in U.S. health care spend of $19.9 billion over the life of the patent. According to Vizient’s Drug Price Forecast, vasopressin was one of the top ten drugs by spend associated with COVID-19 patients during the pandemic.
- Selenium to selenious acid, a trace mineral used to treat nutritional deficiency. Approved as a five-year new chemical entity (NCE) with market exclusivity until April 30, 2024. WAC has increased 1,190% and U.S. health care spend is estimated to increase from $8.52 million annually to an estimated 2020 spend of $84.9 million. Market analysis estimates an increase in U.S. health care spend of $389 million over the remaining exclusivity period.
- Dehydrated alcohol, used to relieve intractable chronic nerve pain. Received a seven-year orphan indication exclusivity to treat severe heart disease. WAC has increased 668% and the U.S. health care spend is estimated to increase from $28 million annually to an estimated 2020 spend of $215 million. Market analysis estimates an increase in U.S. health care spend of $937 million over the remaining period of exclusivity.
- Tralement, an injectable multivitamin of trace minerals necessary for patients who require intravenous administration of nutrition. The parental trace elements were introduced in the 1970s and the combined injection was first marketed in 1993. Since receiving a five-year NCE, in July the WAC increased by 72% from $312.50 to $537.50, potentially increasing U.S. health care spending by $100.2 million during its exclusivity.
About Vizient, Inc.
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.