In January, Vizient released its most recent Drug Price Forecast, which projects a 4.28 percent increase for pharmaceutical expenses made from July 1, 2019 through June 30, 2020 for inpatient and non-acute health systems. Despite projections of continued moderation in price inflation, the overall cost of prescription drugs along with other practice issues and regulatory requirements still represent significant challenges for health systems.
“Although this Drug Price Forecast predicts a modest pricing growth of more than 4 percent, this rate is still significantly higher than the overall rate of inflation,” said Dan Kistner, PharmD, senior vice president, pharmacy solutions for Vizient. “Even though prices are growing more slowly overall than in previous years, we continue to see new, increasingly expensive treatments introduced at ever higher list costs. In addition, supply disruptions and heightened requirements for regulatory adherence can increase expenditures for member organizations.”
In addition to pricing projections, the forecast provides an in-depth look at key therapeutic classes — such as oncology medications, anti-infective agents, and therapies for multiple sclerosis and rheumatoid arthritis — that continue to be among the highest expenses for supply chains.
Highlights from the forecast report include:
- Growth in competition from new generic and biosimilar approvals assist in ongoing efforts at mitigating price growth: 2019 will be a seminal year for biosimilars as competing versions of monoclonal antibodies commonly used in oncology, such as rituximab, bevacizumab and trastuzumab, are expected to enter the market. Also, a second biosimilar for pegfilgrastim is on the market. These four molecules alone account for approximately $14 billion in spend nationally over a 12-month period. Although there are fewer generic versions of blockbuster drugs reaching the market than in past years, the added competition for new generics continues to help lower costs.
- New strategies are required to help address the persistent challenge of drug shortages: The fragility of the pharmaceutical supply chain will remain an ongoing threat to drug costs and limit availability. For the first time since 2014, both new and existing shortages increased in 2018. Critical categories like antimicrobials, chemotherapy products, electrolytes and central nervous system drugs are still greatly affected by supply problems.
- Specialty pharmaceuticals are consuming more spend and increasingly contribute to rising drug costs: The number and cost of specialty pharmaceuticals continue to draw the attention of the health care community as providers, payers and patients work to manage the increasing expense of these medications. The increasing financial burden presented by specialty pharmaceuticals has a substantial impact on health care providers and an even greater impact on patients, for whom the burden imposed by high-cost drugs is significant.
The twice-yearly Vizient Drug Price Forecast is intended to help our members evaluate the financial impact of changes in the pharmacy landscape on the cost of the pharmaceuticals that they will purchase. The forecast is an important resource for pharmacy leaders in developing annual budget projections for their health systems.
The forecast is based on the analysis of data from the Vizient 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 January 2019 Vizient Drug Price Forecast can be accessed here.
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