Vizient’s Outlook Report Is a Mixed Bag: Projected 2022 Drug Spend, White Bagging, Insulin Competition and COVID-19 Treatment. It’s All in There.

Source: Vizient Summer 2021 Pharmacy Market Outlook

Hospitals, health systems and other nonacute providers will spend 3.1% more on drugs next year, with oncology drugs accounting for roughly quarter of the expense, according to a report issued by Vizient today.

Vizient, historically a group purchasing organization for hospitals that now bills itself as healthcare performance improvement company, based the result on analysis of its members’ purchasing pharmaceutical data. The company, which is headquartered in Irving, Texas, also surveyed members about white bagging.

The report, titled the Summer 2021 Pharmacy Market Outlook, discusses the effect of the COVID-19 pandemic on drug expenditures and usage. Between April 2020 and March 2021, the hospitals and healthcare providers in Vizient’s drug purchasing database spent more money purchasing remdesivir, the antiviral sold under the brand name drug Veklury, than any other drug besides Humira (adalimumab), the immunosuppressive drug used to treat a variety of autoimmune diseases, and Keytruda (pembrolizumab), the leading drug among the new generation of cancer drugs that work by harnessing the immune system.

Source: Vizient Summer 2021 Pharmacy Market Outlook

Vizient analyst also had access to a clinical database that included 436 hospitals to track the usage of COVID-19 medications. As the report notes, use of dexamethasone, a low-cost corticosteroid with anti-inflammatory effects, shot up in July 2020 after the report in June that it was effective in reducing mortality from COVID-19. Vizient’s data shows that by November, about 70% of hospitalized COVID-19 patients were treated with dexamethasone. The Vizient data also show steep climb in the use of remdesivir starting in May, the month that the FDA issued an emergency use authorization for the drug.

The Vizient identifies specialty drug as a major factor hospital and other provider organization spending, with spending expected to increase by 4.68%. FDA approval of increasing number of drugs for rare diseases and Humira price hikes prior to 2023 when biosimilars to Humira are scheduled to come on the market are the main reasons for the upward trend, said the press release about the report.

The report sounded an optimistic note about insulin and biosimilar competition. Early last year, insulins were reclassified in such a way as to open them up to biosimilar competition, Vizient noted. The report also mentions the possibility that Viatris, a spin-off company from Pfizer, is seeking FDA approval for versions of insulin glargine and insulin aspart that would be interchangeable with their reference products.

Related:How ‘White Bagging’ Affects Patients, Physicians and 340B Funding

The Vizient report covers a wide range of topics from overall spending patterns to white bagging to FDA’s accelerated approval pathway and the use of surrogate markers.

Here are several takeaways:

• Cancer drugs are the big-ticket class (24.3% of the spend) followed by drugs to followed by infectious disease products (12.77%) and the disease-modifying antirheumatic drugs, or DMARDs (11.4%). Vizient says the therapeutic class with the highest estimated price change next year is DMARDs because of anticipated Humira and Enbrel (etanercept) price hikes.
• Inpatient volumes at hospitals will rebound but not quite return to prepandemic levels, Vizient predicts. The company says inpatient volume is expected to decrease by 1% over the next decade, partly because of the push to changing the side of care to lower-cost outpatient facilities.
• Vizient said “premixed drug formulations” of drugs that used to be combined (“compounded’) in-house is a “notable trend.” The report gave Myxredin, an insulin product, as an example of premixed drug that is far more expensive ($420.20 vs. $14) than the version that could be created in hospitals and other facilities. “While patient safety is paramount and ready-to-use/ready-to-administer formulations may offer a safety advantage (e.g. reduction in compounding errors), it is also paramount for the industry to strike a balance between charging a premium for safety and innovation and taxing providers with a price increase.”
• The report applauds biosimilars and generics coming on the market. Vizient mentioned that four generic versions of intravenous acetaminophen have come on the market starting late last year, giving the brand-name version, Ofirmev, some competition. But the report also noted the Humira biosimilars won’t be on the market for another two years and that biosimilars to Humira will perhaps be most impactful given the price of the drug and how commonly it is prescribed.
• The report includes criticism of white bagging — the provision of a medication directly from a pharmacy to a patient. Specialty pharmacies and payers say white bagging is safe and saves money because it eliminates the “buy and bill” markup providers charge when they take possession of the medication and administer it. But Vizient says white-bagging as disrupts patient care and winds up adding cost, not saving money. Today’s report includes results from a survey Vizient conducted from March 24, 2021, to April 16, 2021, that had 268 respondents. According to the report, 83% of the respondents said they had an experienced a white-bagged drug not arriving in time for administration and 68%, a white-bagged medication that was the wrong drug or the wrong dose.