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Spending on Drugs is Increasing (No Surprise), Fueled by Specialty, Ultraspecialty Drugs (Also No Surprise), says Vizient

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The report on drug spending touches on the rise of the GLP-1s. hows that As of January, semaglutide was the 5th ranked drug when it came to drug expenditures among Vizient pharmacy partners.

Hospitals and health systems will spend 3.8% more on drugs in the year ahead, which is similarlast year’s forecast also but the largest projected jump since its 2019 project, Vizient said in its 52-page winter “2024 Pharmacy Market Outlook."

Fueling the rise are the increasing number of prescriptions specialty and ultraspecialty drugs, additional indications for some expensive drugs and price hikes.The medications expected to have the largest influence on drug spending include Stelera (ustekinumab), Keytruda (pembrolizumab) and Skyrizi (risankizumab-rzaa).

The report, which was published on Jan.30, includes a list of price hikes, based on wholesale acquisition cost (WAC),that occurred between July 2022 and June 2023. The largest by far was a 653.7% increase in the WAC price for Fludara (fludarabine), a drug used to treat chronic lymphocytic leukemia. The next largest was a 22.9% price hike for Maxipime (cefepime in DSW), an antibiotic.

The Vizient report makes projections for spending from July 1, 2024, through June 30, 2025. It is based spending by participants in Vizient’s pharmacy program from October 2022 through September 2022. Vizient, which is headquartered in Irving, Texas, bills itself as a “healthcare performance improvement company” that represents more than half of U.S. acute care providers and more than 20% of its ambulatory care providers.

The report, which covers drugs used in acute and nonacute settings, also touches on hottest topic in drug spending and management these days:the large spike in prescriptions for the glucagon-like peptide receptor 1 (GLP-1) drugs, especially semaglutide, which is marketed as Ozempic as a diabetes drug and as Wegovy as a weight loss drug. According to the report, semaglutide was the fifth-ranked drug in total spend in January 2024, up from a 18th ranking a year ago.

The report predicts, though, that tirzepatide, sold as Zepbound as a weight loss drug, will jump ahead of semaglutide among the weight loss drugs because of lower price, which the report says is 21.5% less than Wegovy, and in savings cards.

Vizient's drug experts say the launching of nine Humira (adalimumab) biosimilars in 2023 hardly made a dent in the buying patterns of the Vizient pharmacy program participants last year. Through September 2023, 99% of the adalimumab purchases were still of Humira, not its biosimilar competitors. But the report sounded an optimistic note about Humira gaining market share this year as pharmacy benefit managers finalize their formulary strategy.

Here are a few more takeaways from the Vizient report:

  • Dupixent (dupilumab), the interleukin 4 and 13 blocker used to treat atopic dermatitis and other inflammatory conditions, has also raced up the drug expenditure chart and ranked 7th in the October 2022-September 2023 time period.
  • Oncology drugs, such as Keytruda (pembrolizumab), Opdivo (nivolumab) and Darzalex (daratumumab), account for the largest proportion of drug spending (22.54%), followed by the drugs for autoimmune and inflammatory conditions, a group that includes Humira, Stelara and Dupixent.
  • Remdesivir, sold under the brand name Veklury, an antiviral used to treat COVID-19, has dropped out of the top 15 drugs by drug expenditure, a reflection of the waning of the COVID-19 pandemic as a source of serious illness that require hospitalization.
  • The FDA has approved 11 gene therapies (not counting CAR-T therapies) and Vizient says it is tracking 170 gene and cellular immunotherapies in development. Most of the gene therapies lack product-specific codes (ICD-10, CPT, HCPCS), and payers are still figuring out coverage policies, according to the report. The Vizient authors mention a lack of clear guidance on how prepare and handle these treatments that are priced in the millions of dollars.
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