Hospitals can expect 7.35% increase in drug prices

Between July 1, 2018, and June 30, 2019, health systems should expect pharmaceutical prices to jump up by 7.35 percent, a slightly lower increase than in recent years as fewer products see “exorbitant” price hikes and costs moderate for high-priced hepatitis C drugs.

The forecast published by Vizient estimated the price increases would range from nearly a 12 percent hike in anti-rheumatic agents (such as Remicade, Humira, Enbrel) to a 1.6 percent decrease in anti-fungal medications like Cubicin and Invanz.

“While slightly lower, this increase still represents a substantial impact, especially given the use of many high-cost drugs across our members,” said Dan Kistner, senior vice president of pharmacy solutions for Vizient.

Looking back at 2017, the report painted the year as a mixed bag for the pharmacy environment. There were positive developments, such as the approval of nine biosimilar agents by the Food and Drug Administration and increased scrutiny on rising drug prices from federal lawmakers, along with continued challenges. The report specifically mentions a “fragile” drug supply chain exposed by Hurricane Maria interrupting operations of Puerto Rico-based manufacturers, as well as the continued efforts by brand-name drug companies to protect their patients, like Allergan trying to sell its rights to Restasis to a Native American tribe to extend exclusivity by six years.

For the July 2018 to June 2019 period covered by the forecast, Vizient said it expects specialty drugs’ share of pharmaceutical spending to continue to increase. Health systems appear to be “expanding their proficiency” in this area, the report said, with models like the one adopted at Vanderbilt University Medical Center showing how processes for medication selection, delivery and approval by payers can be improved.

Looking ahead, payers may continue to present a hurdle in expanding use of biosimilars by either refusing to cover them or assigning those lower-cost drugs to a second tier in their formulary.

“As additional competitors enter the market and prices for those products fall relative to the originators, it is hoped that the potential savings will prompt more payers to designate biosimilars as either preferred or equivalent to the originator product. Improved placement of biosimilars on payer formularies is very much needed,” the report said.

Several biosimilars may be approved by the FDA before July 2018, such as Pfizer breast cancer treatment Trastuzumab and Sandoz’s lymphoma drug Rituximab, with the possibility other oncology biosimilars could be on the market in 2019.

One specialty drug area which has continued to produce “sticker shock” for patients and providers alike, Vizient said, is diabetes treatment. The price of short-acting insulins has increased by 290 percent over the past decade (including price hikes approved by new HHS Secretary Alex Azar) and companies like Eli Lilly have been sued for allegedly colluding to keep costs high. The introduction of new insulin biosimilars, however, may begin to lower costs.