COVID-19 pushes up prescription drug spending of healthcare systems


The pandemic is expected to have a significant effect on drug costs this year and into 2022, a new report says.

The COVID-19 pandemic heavily influenced spending on prescription drugs in the U.S. in 2020 and the pandemic is expected to have a significant impact on drug costs this year and into 2022, according to a new report.

Shifts in care related to the pandemic will continue to be a significant driver of healthcare systems’ drug expenditures in 2021, along with uptake in the use of biosimilars, a large pipeline of new cancer drugs, and increased approvals of specialty medications, according to the American Society of Health-System Pharmacists’ (ASHP) National Trends in Prescription Drug Expenditures and Projections for 2021 report.

Prescription drug spending in 2020 grew at a moderate rate of 4.9% to $535.3 billion, driven by increased utilization. Spending on new drugs accounted for 1.8% of the increase, and price changes accounted for 0.3%.

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Drug spending in nonfederal hospitals declined 4.6%, while drug spending in home care settings increased 13%, the report said.

The top drugs by overall spending were the immunosuppressive adalimumab (Xeljanz) for immune disorders such as arthritis and Crohn's disease; apixaban (Eliquis), a treatment to prevent blood clotting in patients with atrial fibrillation; and the insulin glargine.

Eric Tichy

Eric Tichy

Many effects of the pandemic are likely to persist in 2021 and could have a dramatic impact on drug expenditures into 2022, according to Eric Tichy, Pharm.D., lead author of the report and division chair, supply chain management at Mayo Clinic in Rochester, Minn.

"Hospital and health-system pharmacy leaders should expect to continue suffering from drug expenditure whiplash in 2021 and beyond as they manage the implications from COVID-19, including the commercial availability of new high-cost drug therapies and shifts in site of care throughout the evolution of the pandemic,” Tichy said in a press release.

As drugs approved under emergency use authorizations transition to full FDA approval, expenditures for agents like remdesivir and monoclonal antibody cocktails will move from the federal government to the sectors where care is delivered, according to ASHP.“Remdesivir exceeded expenditures for all drugs in nonfederal hospitals, despite it only being commercially available for the final three months of 2020,” ASHP said.

Approvals for several new drugs for the management of COVID-19 will impact spending in coming years, the report predicts.

Related: FDA issues new warning on Pfizer’s Xeljanz

Hospitals and health systems are also likely to see a rebound of prescription drug expenditures resulting from higher utilization of acute care services due to patients' reluctance to get preventative care during the pandemic.

The report also predicts the expanded use of biosimilars over innovator products will serve as a powerful deflationary force on drug expenditures for the foreseeable future. Expected approvals of new biosimilars for adalimumab (Humira, other brand names), ranibizumab (Lucentis), and pegfilgrastim (Neulasta) in 2021 and 2022 will increase competition and may cause further reductions in expenditures, ASHP said.

Other factors expected to influence prescription drug spending in 2021 include a large pipeline of new cancer drugs, the development of treatments for rare diseases, and expected FDA approval of several specialty drugs.

“The growth in spending on specialty drugs continues to outpace the rest of the market and could exceed 50% of overall drug expenditures in 2021,” ASHP said. Efforts by payers to implement site-of-care restrictions will push more use of high-cost specialty drugs out of hospitals and into lower-cost sites, including ambulatory infusion centers and homecare, the report predicts.

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