What You Should Know:
– The increase is the highest since July 2019 and is attributed in part to the expanding realm of specialty pharmacy, notably the increased utilization of weight loss drugs. The report also highlights the anticipated rise in provider spending due to the expansion of gene therapies.
Price of Specialty Medications
The majority of the top 15 medications in spend among Vizient pharmacy program participants fall under specialty pharmaceuticals, addressing high-cost, complex, or chronic conditions such as cancer, infectious diseases, autoimmune disorders, and pulmonary conditions. The report indicates a projected 4.18% increase in the price of specialty medications, driven by the approval of 42 novel specialty drugs in 2023, with an anticipated record number of approvals in 2024.
Increased Provider Spending
The two major contributors to the surge in provider spending identified in the report are weight loss drugs and gene therapy:
– Weight Loss Drugs: The spending and utilization of glucagon-like peptide receptor 1 agonists (GLP-1s), primarily used for treating type 2 diabetes and obesity, have witnessed a significant uptick. Semaglutide, a prominent GLP-1 agonist, has climbed to the No. 5 spot in total Vizient customer spend, a noteworthy rise from its No.18 position a year ago. Competition in this space, exemplified by the introduction of tirzepatide (Zepbound™) for weight loss in December 2023, is expected to impact bariatric surgery volumes, with a forecasted 4% reduction by 2033.
– Gene Therapy: The report underscores the rapid growth of gene therapy, a field involving the modification of gene expression for therapeutic purposes. A single dose of gene therapy can exceed $2 million. With 11 approved gene therapy products currently available, Vizient is tracking over 170 gene and cellular therapies in the pipeline. Despite their potential for revolutionizing disease prevention and treatment, challenges such as high costs, reimbursement coding, and ultra-low-temperature storage requirements need to be addressed.
The report also anticipates the growing market share of biosimilars, accounting for 24.93% of purchasing volume for originator products. While biosimilars are expected to increase in price by only 0.55%, Humira® remains dominant, representing 99% of Vizient customer adalimumab purchases through September 2023.
Notably, Remdesivir, an anti-viral agent used in COVID-19 treatment, has dropped out of the Vizient overall top 15 medications but remains the top spend agent in the acute care segment.
Pharmacy Market Outlook Report/Background
The projections presented in the Pharmacy Market Outlook are based on total Vizient Pharmacy program participant spending from October 2022 through September 2023, with price change estimates projected for July 1, 2024, through June 30, 2025. The report underscores the importance of proactive management of pharmacy expenditures and adaptation to emerging trends for healthcare institutions to navigate the evolving landscape successfully.
“Many hospitals around the country experienced a challenging 2023, including drug shortages and rising drug costs,” acknowledged Carina Dolan, Associate Vice President of Clinical Oncology, Pharmacoeconomics, and Market Insights at Vizient. “Managing pharmacy expenditures and strengthening the supply chain is more important than ever.”