Provider drug spending: Prices will increase 3% in 2022
The Vizient Pharmacy Market Outlook predicts that oncology will continue to drive spending.
A new pharmacy market forecast predicts a 3.1% increase in total pharmaceutical spend for medical purchasers such as hospitals, health systems, and other providers in 2022. The analysis linked the increase to uncertainty over the ongoing COVID-19 pandemic and the growing use of specialty pharmaceuticals.
The Vizient Pharmacy Market Outlook predicts that oncology will remain the top therapeutic class in spend by providers, while continued high spending on drugs related to the COVID-19 pandemic will also be a factor for next year.
Related: Strategies to keep prescription drug spending in check
“Throughout the course of last year, we have learned much about the SARS-CoV-2 virus, which has evolved the available treatment options for COVID-19,” said Dan Kistner, group senior vice president of pharmacy solutions for Vizient. “The continuing emergence of variants, combined with significant vaccine hesitancy, is creating doubt that we will have a quick return to normal and has led Vizient to increase its projections on overall spending on related treatments.”
Specialty pharmaceuticals continue to drive spending
The annual report calls spending on specialty pharmaceuticals a “dominant force” when it comes to recent increases in drug spending. The report predicts specialty pharmaceutical pricing to grow at a rate 4.68% in 2022. The growth rate is driven by the expected approval of new drug therapies and ongoing price increases for adalimumab, a popular specialty drug that is used to treat autoimmune diseases.
The new analysis also includes diabetes medications for the first time. Those drug costs are projected to increase 2.63% next year, the report said. “Novel diabetes drugs are gaining more indications, not only in the management of blood glucose, but also for the prevention of cardiovascular events and other disease complications,” The report said. “When combined with the increasing prevalence of the disease, health systems are expected to see expanded use of these products in their patient populations.” The study also mentions a possible increase in competition from biosimilar drugs for diabetes treatment, which could affect prices.
White-bagging, brown-bagging practices are raising concerns
The report also has a discussion of white-bagging and brown-bagging, industry practices that have led to concerns about the quality of treatments. The two practices are used by payers to hold down costs on specialty drugs, the report said, by requiring such drugs to be sent to patients or pharmacies, instead of to providers such as hospitals and clinics.
These complex drug therapies often require on-site injection and infusion for patients. White-bagging sends the drug to an offsite pharmacy, which then distributes it to a providers; brown-bagging sends the drug directly to patients, who then take it to providers. “This is another distribution mechanism that enables payers to manage cost by shifting cost to the pharmacy benefit and away from the medical benefit,” the report said. “Further, as with white-bagging, the provider is only able to bill for administration and not capture any costs related to subsequent storage or monitoring services that help ensure quality care.”
Providers are raising questions about quality control in such distribution systems. “The fragmented distribution mechanisms in play for medication management, administration and monitoring has created concerns, including: the quality of drugs provided through this mechanism, the potential for a negative impact on safe and effective patient care, and additional expense incurred by providers to prevent treatment delays and/or missed doses,” the report said. “In addition, these white-bagging payer policies needlessly place administrative burdens on both providers and patients and ultimately serve as another barrier to care.”
To explore the question, Vizient polled health care providers in a range of settings, including clinics, hospitals, and academic medical centers, on what issues they have had with white/brown-bagging practices.
The top issues respondents reported experiencing were:
- Product did not arrive in time for administration to patient – 83%.
- Product delivered was no longer correct due to patient’s updated treatment course or dose change – 66%.
- Product delivered as inappropriate/wrong dose – 42%.
- Product delivered was damaged – 37%.
The report also noted that these concerns are being brought up by medical associations and may be addressed by state policymakers.
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