Health systems, including inpatient and non-acute environments, will have a nearly 4% price increase for pharmaceutical purchases in the coming year, according to the report.
The Winter 2020 Drug Price Forecast by Vizient, Inc, projects that health systems, including inpatient and non-acute environments, will have a 3.59% price increase for pharmaceutical purchases between June 1, 2020, and June 30, 2021.
Although the forecast is lower than previous projections, the influence of expensive biologic therapies, oncology and oncology-related drugs, disease-modifying antirheumatic drugs, and immunomodulators on overall spend by health systems remains quite substantial.
“Over the past 3 forecasts, we have seen a trend towards price increases that are meaningful but smaller. Still, we don’t want to minimize the impact that continued price increases have on providers and patients,” said Dan Kristner, group senior vice president, Pharmacy Solutions at Vizient, in a press release. “We believe that the lower rate of price inflation can be attributed to advocacy work by industry groups, including Vizient, and improved transparency in the supply chain for pharmaceuticals. We can’t take our eye off the issue of rising drug prices yet, and we support the continued scrutiny of drug prices by the public and legislators.”
Although biologic drugs dominate many aspects of spend, the forecast also notes that certain small-molecule medications will have a substantial cost impact on health systems. Two of these cost-impacting medications are intravenous (IV) acetaminophen and vasopressin, according to the report.
For IV acetaminophen, market exclusivity and patent protection are expected to expire in December 2020, and there will likely be numerous abbreviated new drug applications and 505(b)(2) versions of this product entering the market, according to Vizient. This level of competition should bring meaningful pricing relief in 2021.
Although market exclusivity has expired for vasopressin, numerous patents could protect it from competition until 2025.
The increase in competition in some of the expensive biologic therapies is also helping lower costs, according to Kristner.
“One of the keys to managing costs for health systems is the adoption of biosimilars as they come on the market,” he said. “There are now 12 biosimilars available and where there are 2 or more competitors, we have seen prices as much as 30% lower than the branded product. Providers and payers must now become better aligned to realize the full benefit that competition can offer in driving down the cost of care.”
Highlights from the forecast report include:
According to Kristner, the pharmacy landscape continues to be extremely complex through regulatory issues, financial pressures, and clinical requirements.
“We must also consider the potential impacts of the upcoming election, which could accelerate or curtail current initiatives aimed at increasing competition and market transparency that can address drug shortages and lower drug costs overall. It will be important for health systems to stay vigilant in managing cost as we continue to navigate a very turbulent marketplace,” Kristner said.