New gene therapies will also put pressure on hospital spend

Vizient, Inc. projects drug price inflation to grow at 3.8% in the latest Pharmacy Market Outlook. Driven in part by specialty pharmacy, including the increasing utilization of weight loss drugs, it is the highest projected increase since July 2019. In addition, the anticipated expansion of gene therapies will increase provider spend even more. View the Pharmacy Market Outlook.

“Many hospitals around the country experienced a challenging 2023, including drug shortages and rising drug costs,” said Carina Dolan, associate vice president, clinical oncology, pharmacoeconomics and market insights, Vizient. “Managing pharmacy expenditures and strengthening the supply chain is more important than ever.”

Specialty pharmaceuticals, which treat high-cost, complex or chronic conditions such as cancer, infectious-, autoimmune- and pulmonary conditions, make up the majority of the top 15 medications in spend among Vizient Pharmacy program participants. With 42 novel specialty drugs approved in 2023 — and 2024 likely to see a record number of approvals — the projected price increase for specialty medications is 4.18%.

What’s driving the increase in provider spending?

• Weight loss drugs: Spending and utilization of glucagon-like peptide receptor 1 agonists (GLP-1s), which treat type 2 diabetes and obesity, have increased dramatically over the past few years. Semaglutide, a GLP-1 agonist, has risen to the No. 5 spot in total Vizient customer spend, making its way up from No.18 a year ago.
  
  
  
  Competitors in this space are making strides to gain market share, including the new indication for tirzepatide (Zepbound™) for weight loss, launched in the U.S. in December 2023. In its most recent annual Impact of Change Forecast, Sg2, a Vizient company, forecasts a 4% reduction in bariatric surgery volumes by 2033 due to anti-obesity medication use.
  
  

• Gene therapy: One dose of gene therapy, a rapidly growing field that involves modifying the expression of genes for therapeutic purposes, can exceed $2 million. There are currently 11 approved gene therapy products (excluding chimeric antigen receptor (CAR)-T therapies).
  
  
  
  Vizient is tracking more than 170 gene and cellular therapies in the pipeline and expects they will have a significant impact on disease prevention and treatment in the coming years. However, their novelty presents challenges, including cost, proper coding for reimbursement and ultra-low-temperature storage requirements.

Biosimilars expected to grow in market share

Biosimilars made up 24.93% of purchasing volume for originator products and their corresponding biosimilars and are expected to increase in price by only 0.55%. While Humira^® still represented 99% of Vizient customer adalimumab purchases through September 2023, biosimilar adalimumab products are expected to gain market share throughout 2024 as pharmacy benefit managers finalize their formulary strategy. However, Humira may continue to be a top spend until biosimilars are mandated at the payer level.

Remdesivir continues to drop

Remdesivir, an anti-viral agent used in the treatment of COVID-19, which first appeared on the top of the Vizient customer spend list in the summer 2021 Outlook, has finally dropped out of the Vizient overall top 15 medications. It remains the top spend agent in the acute care segment of the market.

Projections for this edition of Pharmacy Market Outlook are based on total Vizient Pharmacy program participant spend from October 2022 through September 2023. Price change estimates are projected for July 1, 2024 through June 30, 2025. Read more about the Pharmacy Market Outlook.

About Vizient, Inc.

Vizient, Inc., the nation’s largest provider-driven healthcare performance improvement company, serves more than 60% of the nation’s acute care providers, which includes 97% of the nation’s academic medical centers, and more than 25% of the non-acute care market. Vizient provides expertise, analytics and advisory services, as well as a contract portfolio that represents more than $130 billion in annual purchasing volume. Vizient’s solutions and services improve the delivery of high-value care by aligning cost, quality and market performance. Headquartered in Irving, Texas, Vizient has offices throughout the United States. Learn more at www.vizientinc.com.

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"Managing pharmacy expenditures and strengthening the supply chain is more important than ever." -- Carina Dolan, associate vice president, clinical oncology, pharmacoeconomics and market insights, Vizient.