Vizient Drug Price Forecast Projects 4.28 Percent Increase for 2019-2020
Vizient, Inc. released today its January 2019 Drug Price Forecast projecting health systems, including inpatient and non-acute environments, can expect a 4.28 percent increase for pharmaceutical purchases made from July 1, 2019 to June 30, 2020. In spite of this trend of continued moderation in anticipated drug pricing inflation, the overall cost of medications combined with other practice issues and regulatory requirements remain as substantial challenges for health systems. An executive summary of the Drug Price Forecast can be accessed here.
“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, 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.”
The latest forecast specifically calls out that oncology medications, disease-modifying agents and immunomodulatory agents continue to account for the majority of health system pharmacy spend. “Similar to forecasts in the past, we are seeing a large amount of spending going into the same few categories. While we are seeing some increased competition for certain drugs, the effects of the slow uptake of adoption to biosimilars, natural disasters, exacerbation of drug shortages and reimbursement limitations have continued to drive up costs for providers,” said Kistner.
In addition to the pricing projections, the Vizient Drug Price Forecast offers insight into key therapeutic classes that continue to be among the highest expenses for supply chains, such as oncology medications, anti-infective agents, therapies for multiple sclerosis (MS) and rheumatoid arthritis (RA), and plasma-derived pharmaceuticals. The forecast also analyzes challenges the healthcare system faces, such as overcoming drug shortages and expanding the use of biosimilars and generics.
Highlights from the forecast report include:
- Increases in competition from new generic and biosimilar approvals aid in long-term 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. In addition, a second biosimilar for pegfilgrastim has entered the market. These four molecules alone account for approximately $14 billion in spend nationally over 12 months. 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 ongoing 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 continues 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 challenge 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 Vizient Drug Price Forecast reflects the collective expertise of over two dozen employees of the Vizient pharmacy sourcing, analytics, clinical and consulting teams along with external resources, including its members. It is based on the analysis of data from Vizient’s 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 forecast is an important resource for pharmacy leaders in developing annual budget projections for their health systems. Vizient conducts the pricing analysis biannually each year to provide insight on factors driving pricing and practice changes in the pharmaceutical industry. The forecast may be accessed here: https://www.vizientinc.com/-/media/Documents/SitecorePublishingDocuments/Public/Jan2019_DrugPriceForecast_public.pdf.
Slides that summarize the key points in the forecast can be accessed here: https://www.vizientinc.com/-/media/Documents/SitecorePublishingDocuments/Public/DPF_201901_Slides_Summary_public.pdf.
About Vizient, Inc.
Vizient, Inc., the largest member-driven health care performance improvement company in the country, provides innovative data-driven solutions, expertise and collaborative opportunities that lead to improved patient outcomes and lower costs. Vizient’s diverse membership base includes academic medical centers, pediatric facilities, community hospitals, integrated health delivery networks and non-acute health care providers and represents approximately $100 billion in annual purchasing volume. The Vizient brand identity represents the integration of VHA Inc., University HealthSystem Consortium and Novation, which combined in 2015, as well as MedAssets’ Spend and Clinical Resource Management (SCM) segment, including Sg2, which was acquired in 2016. In 2018, Vizient again received a World’s Most Ethical Company designation from the Ethisphere Institute. Vizient’s headquarters are in Irving, Texas, with locations in Chicago and other cities across the United States. Please visit www.vizientinc.com as well as our newsroom, blog, Twitter, LinkedIn and YouTube pages for more information about the company.
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