Drug Spending Continued To Be A Rollercoaster In 2022

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Using a national database, data on medication purchases was collected, along with factors that may have influenced expenditures, such as new therapy availability, patent expirations, policy changes, and legislation.

According to the National Trends in Prescription Drug Expenditures and Projections for 2023 report by the American Society of Health System Pharmacists (ASHP), the primary reason for a 5.2% decline in hospital drug spending last year was the sudden drop in the use of COVID drug remdesivir compared to the previous year. In contrast, overall drug expenditures grew by 9.4% in 2022 in the U.S., reaching a total of $633.5 billion, with utilization increasing by 5.9% compared to 2021. Average drug prices increased by 1.7%, which was below the consumer inflation rate of 8%.

Using a national database, data on medication purchases was collected, along with factors that may have influenced expenditures, such as new therapy availability, patent expirations, policy changes, and legislation.

Why the abrupt drop in hospital drug spending? “In one word: remdesivir,” Dr. Eric Tichy, PharmD, lead author of the study and division chair at Mayo Clinic, told Formulary Watch in an interview. Referring to the last three years, Tichy said hospital spending would have been fairly flat if not for remdesivir.

He went on to recap how remdesivir was one of few options hospitals had for treating COVID early in the pandemic.

“In the first year remdesivir became available, in just one quarter of spending, it was the top expense drug for hospitals. In the second year it was available, we had a full year of COVID, and hospitals were full of people with COVID. Then, in 2022, the utilization of remdesivir went way down,” Tichy said. “It's still expensive,” he noted, but explained that with the utilization of COVID vaccines, Paxlovid, and other therapies, and with the pandemic generally winding down, hospitals had much less of a need for remdesivir last year.

In contrast to the drop in the COVID drug spending, overall pharmaceutical expenditures grew by 9.4%, primarily due to an increase in drug utilization. Top-selling drugs for 2022 were identified as adalimumab, semaglutide, and apixaban, contributing to increased spending in hospitals and clinics.

Tichy outlined the three main components of spending as inflation, utilization, and new drugs coming to the market. When asked what influenced spending most, Tichy explained: “The biggest driver of spending is utilization. New drugs came to the market. In some cases, diseases that didn't have a treatment before now have a new treatment option.”

Looking ahead to 2023, the ASHP report predicts a 2% increase in prescription drug spending for U.S. hospital and clinics. In 2023, a new biosimilar version of adalimumab became available, and more biosimilars are coming. New drugs are anticipated this year, including new anti-cancer medications and specialty drugs, and thus are expected to result in an uptick in utilization and spending.

“COVID vaccines will be moving into the commercial market in the second half of 2023, and is anticipated to likely become a seasonal vaccine, given in the fall as with other respiratory vaccines. So, that's going to contribute to some new spending that will come into the analysis,” Tichy said.

“In our analysis, we break down pharmacy spending into different sectors. Hospitals nowadays are much more than just an acute care hospital and straddle multiple different sectors of pharmacy spending,” Tichy explained. “Hospital systems now have clinics, acute care, and may have specialty pharmacies—so that’s important to be aware of.”

The Inflation Reduction Act will also influence out of pocket costs for vaccines and Medicare Part D drugs in the coming years. Regarding this, Tichy states, “Utilization is the biggest driver of our expenditures. When you lower costs for people, that decreases the barrier to taking a drug, which increases access. But, some of these price negotiations are not going to happen for several years.”


This article originally appeared on Formulary Watch.

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