Vizient: Health systems should expect a nearly 5% spending jump on drugs

Drugs prescription pad
VIzient reports that health system drug purchases will be up more than 4.5% in 2020. (Getty/LIgorko)

Health systems can expect a nearly 5% increase in the cost of their pharmaceutical purchases in 2020, according to a new report.

Based on a drug pricing forecast from Vizient’s pharmacy program, which compiled member participants’ purchases in hospital and non-acute care settings, pharmaceutical costs will far exceed both inflation and wage growth in 2020, making healthcare less affordable.

Other highlights from the forecast include a dramatic change in the approval and introduction of biosimilars into the U.S. market. Nine out of the top 10 drugs (by total spending) among Vizient members in 2020 will be branded biologics, meaning pharmacy and healthcare leaders should start supporting the biosimilars market.


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Dan Kistner, PharmD, group senior VP of pharmacy solutions for Vizient, noted the changing landscape in the hospital market.

RELATED: Report: Biosimilars could save billions in healthcare spending

“Hospitals are no longer strictly focused on inpatient/acute care services,” Kistner said in a statement. “They are also offering numerous services in the non-acute setting such as outpatient infusions, home infusion, and most importantly specialty pharmacy services. Therefore, the spend profile of our members now includes the new, increasingly specialized medications approved by FDA, which tend to be among the most costly products introduced into practice.”

In addition, inflation is predicted to be more than 4% in the specialty drug market, which is significant for health systems since prices of these specialty drugs tend to outweigh those of nonspecialty medications.

The analysis also showed that drug shortages will end up costing health systems more money. During a national survey of Vizient members, 365 hospitals and health systems said that the total cost of increased labor was $359 million due to more than 8 million labor hours to manage drug shortages.

RELATED: Covance—Why biosimilars could be a large piece of the drug price puzzle 

The report also predicts an increase in costs for providers treating leukemia patients, as new therapy combinations become the standard of care. While new advances promise choices and potentially improved outcomes, providers and patients will experience a higher financial impact.

In addition, immune globulin intravenous drugs will continue to see supply challenges to meet demand and therefore a steady rise in prices.

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