Hospitals’ pharmacy spending is projected to rise by 3.42% next year, according to a new report published by Vizient. Specialty drugs and neurology medications are the primary drivers of this increase in pharmacy expenses.
Vizient is a healthcare performance improvement company that provides hospitals with advisory services and data analytics. For its report, the firm analyzed data from its customers’ aggregated pharmacy purchasing volume.
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The report predicted that semaglutide, an antidiabetic medication that Novo Nordisk sells under the brand names Ozempic, Wegovy and Rybelsus, will be among the top ten drugs driving hospitals’ pharmacy expenses in 2024. The medication was number 30 on the list when Vizient issued this report 12 months ago — but hospitals’ spending on semaglutide has more than doubled over the past year. Spending on this drug is expected to go up next year due to both the 5% wholesale acquisition cost increase as well as the growing awareness of its various uses, the report said.
The report also pointed out that the neurology service line is witnessing advancements in new drug development and rising prices, which is leading to increased utilization by healthcare providers and higher expenses. For example, hospitals’ utilization of calcitonin gene-related peptide (CGRP) therapies for migraine treatment has increased over the past few years. The annual treatment cost for this therapy is about $6,900, and Vizient customers saw a 73% increase in their spending for these drugs in 2023, the report showed.
Additionally, ocrelizumab, a drug that Genentech sells under the brand name Ocrevus, has been a significant part of Vizient customers’ overall expenditure for multiple sclerosis treatment in 2023, and it is projected to have one of the highest price increases among all drugs next year.
However, in December, the FDA approved monoclonal antibody ublituximab as an alternative treatment. This new drug offers shorter infusion duration and comes with a lower wholesale acquisition cost, making it the most cost-effective monoclonal antibody approved to treat relapsing forms of multiple sclerosis. Its introduction may enable providers to reduce their expenses, according to the report.
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The report also pointed out that hospitals’ spending on remdesivir, a Covid-19 drug that Gilead sells under the brand name Veklury, has decreased significantly so far in 2023. This trend is expected to continue next year, according to the report. Remdesivir is now number 13 on Vizient’s list of drugs that contribute the most to its customers’ pharmacy expenses — after being number one in 2022.
Number one is now adalimumab, which AbbVie sells under the brand name Humira. The medication is used to treat various autoimmune diseases and inflammatory conditions, such as rheumatoid arthritis, Crohn’s disease and plaque psoriasis. The report predicted that adalimumab will maintain its place as the highest contributor to hospitals’ pharmacy spending in 2024 despite ten biosimilar competitors entering the market this year.
It could take several years for adalimumab’s biosimilar competitors to actually affect hospital pharmacy spending, given the time it will take for these drugs to make it onto payer formularies and gain widespread acceptance from providers and patients, the report said.
Biosimilars are making an impact in other areas, though. For example, hospitals’ utilization of biosimilar products for insulin glargine makes up 7% of the market, according to the report. Additionally, biosimilars for the monoclonal antibodies Avastin, Herceptin and Rituxan, as well as hematopoietic drugs like Neupogen, Neulasta and Epogen now own a sizable share of the market.
Among drugs for which a biosimilar is available, the report projected that biosimilars will make up nearly a quarter of spending in 2024. It also predicted that prices for biosimilars will stay the same, while prices for originator drugs are expected to rise by 2.74%.
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