In its Winter 2021 Pharmacy Market Outlook, Vizient is projecting a 2.67% increase in the price of pharmaceuticals purchased by health systems, academic medical centers, pediatric hospitals and non-acute practices from July 1 to June 30, 2022.
Formerly named the Drug Price Forecast, the outlook's projected increase continues to trend slightly downward, reflecting recent generic entrants to the market, as well as increasing adoption of biosimilars.
Findings also include a similar overall increase for oncology spend, which makes up nearly a quarter of pharmaceutical spend, a potential increase in cancer mortality due to the impact of COVID-19 on screenings and the coronavirus's inflationary impact on plasma-derived products.
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A new formulation of vasopressin was recently approved by the FDA and granted market exclusivity through 2035, causing its price to spike significantly. Fortunately, several substantial price decreases are projected for drugs like injectable acetaminophen, daptomycin (a commonly used antibiotic) and regadenoson, a medication used in cardiac stress testing. This further illustrates the importance of generic and biosimilar competition.
The drug with the largest anticipated price increase remains adalimumab, sold under the brand name Humira and used to treat arthritis and ulcerative colitis. Because biosimilar competition is not yet allowed to be marketed, adalimumab, which is already the number one drug by total spend for the U.S. healthcare system, is projected to increase in price by 7.5% over the next 18 months.
WHAT'S THE IMPACT?
While the trend toward more moderate drug price increases is seen as positive, given ongoing pandemic-related financial difficulties, COVID-19 is still having an impact on clinical and financial outcomes. Budgets continue to be impacted by the increased use of high-cost drugs vasopressin and tocilizumab, as well as critical care drugs designed to treat coronavirus patients.
Oncology medications, which make up 24.67% of pharmaceutical purchases, are projected to increase 2.68%. Wholesale acquisition cost for intravenous drug pegaspargase increased 19.2% in 2020. The oral medication nilotinib increased 15.5%.
More concerning, data shows that screening rates for breast, colon and cervical cancer plummeted in April, which contributed to a 65.2% decline in the incidence of new cancer diagnoses as of May. Delays in detection and diagnosis of cancer can have a significant impact on patient outcomes. Data also suggests mortality increases up to 9.5% from breast cancer and up to 16.6% for colorectal cancer within five years. The long-term impact of COVID-19 on cancer patients remains a critical metric to track.
Meanwhile, even prior to the pandemic, prices for albumin and other plasma-derived products have remained a closely monitored issue. The supply is expected to tighten in the first quarter of 2021 due to a reduction in plasma donations because of stay-at-home orders and public concerns about contracting the virus. The supply potentially remains tight into 2022, resulting in a 3.10% inflation rate for these products.
And then there are biosimilars. After 10 years on the market, biosimilars are poised to make their greatest impact yet in the next half decade. As of December 31, the FDA had approved 29 biosimilars, with many yet to be launched due to patent settlements. A recent analysis shows the availability of biosimilars resulted in cost savings of $19 billion between 2015 and 2019.
That savings are expected to quintuple by 2024 to $104 billion. Biosimilar versions of trastuzumab, a chemotherapy used to treat breast, stomach and esophageal cancers, grew to a 39% share in September, but the further increase in savings will come largely when biosimilars for adalimumab come to market in 2023.
Given the interest in cost savings, and as the healthcare industry begins to recover from the pandemic, those savings should inspire a continued industry shift toward biosimilars.
THE LARGER TREND
A Drug Price Forecast released by Vizient in July 2020 projected a 3.29% increase for pharmaceutical purchases in 2021, driven both by the ongoing disruption caused by COVID-19 and by enduring market trends unrelated to the virus.
There has been uncertainty in many aspects of drug utilization during the COVID-19 pandemic. But upward industry trends such as very high prices for novel treatments (like gene therapies and immunotherapy for cancer) and routine price increases for frequently prescribed medications, have maintained a level of continuity.
Pediatric pharmaceutical costs are also rising as a result of the targeting of rare diseases that require specialty or orphan drugs. Fortunately, the continued introduction of generic medications and an expanding catalog of available biosimilars are serving to blunt some of the impact of price increases on hospital budgets.