Nationwide drug spending grew 7.7% in 2021, will increase another 4%-6% in 2022

The U.S.’s total drug spending grew 7.7% to $576.9 billion in 2021 and is projected to increase somewhere between 4% and 6% in the year to come, according to a recent report from the American Society of Health-System Pharmacists (ASHP).

Nonfederal hospitals made up about $39.6 billion of that total, representing an 8.4% increase over the prior year, according to the study. In 2022, the sector is expected to increase its drug spending by another 7% to 9%.

Clinics, meanwhile, were responsible for $105 million of last year’s drug spending, a 7.7% increase over 2020, according to the group. Their spending is projected to grow by another 3% to 5% nationwide.

“The drug spending whiplash that clinics and hospitals experienced in the first year of the pandemic did not end with 2021,” Eric Tichy, division chair of supply chain management at Mayo Clinic and the report’s lead author, said in a statement. “Uncertainty remains around how long the federal government will continue to pay for COVID treatments, and around inflation, which is moving through most economic sectors.”

ASHP’s report leaned on drug purchase data from the IQVIA National Sales Perspectives database, which reports purchases from manufacturers at actual transaction prices, and a review of various factors such as new drug approvals, patent expirations and policy that could affect national drug spending. Researchers developed their predictions on 2022’s spending trends through “a combination of quantitative analyses and expert opinion,” according to the report.  

Last year’s drug spending increases were largely driven by a combination of higher utilization and prices as well as the impact of new drugs, researchers wrote.

The COVID-19 treatment remdesivir was the leading expense for hospitals, outpacing the next three drugs combined with nearly 10% of hospitals’ total drug spend.

On the other side of the scale, researchers said increased use of biosimilars offset some of the spending increases of 2021.

“Biosimilars really took off this year,” Tichy said. “In oncology, we’re using more biosimilars than we are the originator drugs. A couple of years ago there was a lot of consternation about the uptake of biosimilars being slow, but that has turned around. Their use is likely to continue growing, and it’s saving the healthcare system a lot of money.”

Drug expenditures for the coming year could be kept somewhat in check by new generics as branded drugs lose their patent protection. A noteworthy example cited in the report is the antidiuretic vasopressin, which currently is hospitals’ fifth-highest drug expense.

The researchers are also expecting several new drug approvals in oncology, the top spending category in 2021. Specifically, the coming year could see the Food and Drug Administration approve five new immune checkpoint inhibitors, a category accounting for about a third of all oncology drug expenditures.

“After this year we expect there to be 12 immune-checkpoint inhibitors on the market,” Tichy said. “They all work similarly, but we haven’t really seen price competition between them. With more immune-checkpoint inhibitors on the market, we’re hopeful competition may drive down prices.”