Including inpatient and outpatient environments, hospitals and health systems can expect a 4.57 percent increase in pharmaceutical spending next year, according to Vizient's July 2019 drug price forecast.
The forecast is an analysis and projection of anticipated trends in drug pricing based on the purchasing patterns of Vizient's member organizations, including pediatric facilities, community hospitals, nonacute settings and academic medical centers. Vizient's member organizations have a total of $67 billion in drug spend. Vizient is a healthcare performance improvement company.
Five more takeaways from the report:
1. Specialty drug prices will continue to rise. Specialty drug price inflation is predicted to be 4.23 percent in 2020. Specialty drugs expenses tend to cost more than nonspecialty drug expenses.
2. The adoption of biosimilars will become vital to combat costs of biologics. Biologic agents, including those used to treat cancer and other chronic diseases, still dominate spend for hospitals. However, the FDA approved 22 biosimilars as of July 2019, and seven are available in the U.S. market. Adoption of these biosimilars and their entry into the market will help lower the cost of biologics.
3. Patents protecting some key biologics are set to expire this year. Patents for rituximab, bevacizumab and trastuzumab are expected to expire during the third quarter of 2019. These biologics account for more than $10 billion in spend in the U.S. healthcare system.
4. Drug shortages will continue and will contribute to higher costs. Vizient conducted a separate survey in April to understand the effect of drug shortages on its member hospitals. The survey revealed that drug shortages are costing U.S. hospitals at least $359 million a year on labor costs alone. Vizient expects supply challenges in the immune globulin intravenous market to continue for the remainder of the year into the first half of next year. Frequent and extended drug shortages increase spending on drugs purchased from wholesalers the hospital is not contracted with or on alternative medications.
5. Health system-owned specialty pharmacies will expand. Between 2015 and 2018, the number of specialty pharmacies owned by provider organizations jumped from 11 percent to 27 percent. Another analysis expects this will increase to 85 percent in 2022.
Access the full report here.