Drug Price Forecast Highlights July-August 2018 Executive summary
The Drug Price Forecast is our best estimate of the change in the cost of pharmaceuticals that participants in the Vizient Pharmacy Projected inflation rate Positive developments Program will be purchasing from Jan. 1–Dec. 31, 2019. The forecast focuses on pharmaceutical products used across multiple health- • Increasing competition in the generic and biosimilar markets system settings, including inpatient and non-acute environments, 4.92% and provides a year-over-year estimate of the expected Weighted by Vizient member purchases. • Improvements in specialty pharmacy management price change. All classes of trade; excludes 340B purchases. • Government attention to cost issues
Highest-spend therapeutic classes for Vizient members Ongoing challenges Therapeutic category Key products in class • Supply chain interruptions, exacerbated by regulations and natural disasters Disease-modifying antirheumatic agents Remicade, Humira, Enbrel • Opioid addiction crisis Antineoplastic agents Rituxan, Keytruda, Avastin • Unsustainable introductory costs Immunomodulatory agents Tysabri, Copaxone, Ocrevus for new drugs • Reimbursement issues Anti-infectives Harvoni, Epclusa, Zepatier, Cubicin, Invanz, Noxafil
Plasma critical care Gamunex, Privigen, Gammaguard, Alburx, Albutein, Flexbumin
Hematopoietic agents Neulasta, Aranesp, Procrit
Vaccines Prevnar, Gardasil, Pneumovax Our advice Diabetes agents Lantus, Humalog, Novolog Maintain focus on: • Strategic role for pharmacy • Specialty pharmacy • Biosimilars • Advocacy
July 2018 Vizient Drug Price Forecast Generic/biosimilar Timelines and approvals New drug approvals Regulatory events availability 2018–2019
Doravirine Moxetumomab pasudotox Lisocabtagene maraleucel HIV Hairy cell leukemia ALL Q4 2018 Oct 31, 2018 Dec. 31, 2018 Omadacycline Larotrectinib Siponimod Ivosidenib Amikacin liposome inhalation suspension MDR bacterial infections Solid tumors MS AML Nontuberculosis mycobacterial lung disease Q4 2018 Nov 26, 2018 Dec 31, 2018 Aug 21, 2018 Sep 28, 2018 Cemiplimab Baloxavir marboxil Upadacitinib Eravacycline Metastatic CSCC Influenza RA MDR bacterial infections Oct 26, 2018 Dec 24, 2018 Dec 31, 2018 Aug 28, 2018
EPA Management Standards for DQSA Title 2: DSCSA (“track and trace”) Comprehensive Addiction and Recovery FY 2019 CMS IPPS rule finalized Hazardous Waste Pharmaceuticals Drug package serialization and T3 Act of 2015 Aug 1, 2018 Final rule in 2018 information electronically Pain Management Interagency Task Force Q4 2018 Nov 27, 2017 (enforcement delayed until Jul 22, 2018 Nov 26, 2018)
2018 Q3 Q4
Vardenafil Ritixumab Mometasone furoate Arsenic trioxide Mesalamine Levitra (2.5, 5, 10, 20 mg) Rituxan Asmanex Twisthaler Trisenox Canasa Q3 2018 Jul 2018 Sep 17, 2018 Nov 30, 2018 Dec 2018 Dalfampridine Cinacalcet HCl Silodosin Pimecrolimus Ampyra Sensipar Rapaflo Elidel Jul 2018 Sep 8, 2018 Dec 2018 Dec 26, 2018
Abbreviations: ALL = acute lymphoblastic leukemia; AML= acute myeloid leukemia; CMS = Centers for Medicare & Medicaid Services; CSCC = cutaneous squamous cell carcinoma; DSCSA = Drug Supply Chain Security Act; DQSA = Drug Quality and Security Act; EPA = Environmental Protection Agency; FY = fiscal year; IPPS = Inpatient Prospective Payment System; MACRA = Medicare Access and CHIP Reauthorization Act; MDR = multi-drug resistant; MIPS = Merit-based Incentive Payments System; MRSA = methicillin-resistant Staphylococcus aureus; MS = multiple sclerosis; PDUFA = Prescription Drug User Fee Act; RA = rheumatoid arthritis. July 2018 Vizient Drug Price Forecast Generic/biosimilar Timelines and approvals New drug approvals Regulatory events availability 2018–2019
USP chapter <800> Delayed enforcement date: Jul 1, 2018 Intended official date Dec 1, 2019
Iclaprim Ozanimod USP chapter <797> MRSA MS Revised Jul 27, 2018 Feb 14, 2019 Mar 31, 2019 Risankizumab Final Jun 1, 2019 Psoriasis Intended official date Dec 1, 2019 April 2019 USP chapter <795> CMS MACRA Sacituzumab govitecan Revised Mar 30, 2018 Performance measures (MIPS) enforced Jan 1, 2017 Metastatic breast cancer Final Jun 1, 2019 Jan 2019 May 21, 2019 Intended official date Dec 1, 2019
2019 Q1 Q2 Q3 Q4
Trastuzumab Ranolazine Solifenacin succinate Itraconazole solution Bevacizumab Bendamustine Herceptin Ranexa Vesicare Sporanox Avastin Treanda Q1 2019 Feb 27, 2019 Apr 2019 Jun 30, 2019 Jul 2019 Nov 30, 2019 Lurasidone HCl Fosaprepitant dimeglumine Deferasirox tablets Pregabalin Erlotinib Latuda Emend (injection) for oral suspension Lyrica (capsule) Tarceva Jan 2, 2019 Mar 4, 2019 Exjade Jun 30, 2019 2019 Apr 30, 2019 Minocycline HCl Fulvestrant Cyclosporine ophthalmic emulsion Solodyn (80 mg) Faslodex Febuxostat Restasis Feb 2019 Mar 25, 2019 Uloric 2019 Jun 30, 2019 Fingolimod Gilenya Feb 18, 2019
Abbreviations: ALL = acute lymphoblastic leukemia; AML= acute myeloid leukemia; CMS = Centers for Medicare & Medicaid Services; CSCC = cutaneous squamous cell carcinoma; DSCSA = Drug Supply Chain Security Act; DQSA = Drug Quality and Security Act; EPA = Environmental Protection Agency; FY = fiscal year; IPPS = Inpatient Prospective Payment System; MACRA = Medicare Access and CHIP Reauthorization Act; MDR = multi-drug resistant; MIPS = Merit-based Incentive Payments System; MRSA = methicillin-resistant Staphylococcus aureus; MS = multiple sclerosis; PDUFA = Prescription Drug User Fee Act; RA = rheumatoid arthritis. July 2018 Vizient Drug Price Forecast A closer look by segment
Total U.S. drug spend, CY 2017: $456B
Acute and non-acute care Specialty pharmaceuticals Pediatric Distribution of U.S. drug spend across all areas Specialty pharmacy spend as a percentage of Top drug spend among children’s hospitals of care, CY 2017 U.S. net per capita spend Drug (brand name; manufacturer) 0 7 5% 46 5% 1 Dinutuximab (Unituxin; United Therapeutics) 15 6% 0 2 Pegaspargase (Oncaspar; Shire)
22 3% 3 Infliximab (Remicade; Janssen Pharmaceuticals) 0 4 Recombinant human coagulation factor VIIa (rFVIIa) (Novoseven RT; Novo Nordisk) 20 5 Palivizumab (Synagis; Astra Zeneca) 70 3% 3 7% 10 6 Sildenafil (Revatio; Pfizer) 3 0% 7 Asparaginase (Erwinaze; Jazz Pharmaceuticals) Retail and mail-order linics 0 8 Somatropin (Genotropin, Humatrope, Norditropin 2008 2011 201 201 cute care Long-term care FlexPro, Nutropin AQ, NuSpin, Omnitrope) Non-acute care t er 9 Eculizumab (Solaris; Alexion)
IQVIA Institute for Human Data Science. Medicine Use and 10 Immune globulin, gamma (IgG)/glycine/IgA Schumock GT, Stubbings J, Wiest MD, et al. National trends in Spending in the U.S. A Review of 2017 and Outlook to 2022. (Gamunex-C; Genentech) prescription drug expenditures and projections for 2018 [published https://www.iqvia.com/institute/reports/medicine-use-and- online ahead of print May 10, 2018]. Am J Health Syst Pharm. spending-in-the-us-review-of-2017-outlook-to-2022. 2018;75(11):e353-373. Published April 19, 2018. Accessed June 3, 2018.
Overall drug spend increased by 58% from 2012–2017, even Pharmaceutical spending growth will continue to rise as a though the number of prescriptions dispensed decreased, result of new approvals of specialty and orphan drugs as well indicating that increases in spend are due to higher drug as biotherapeutics. prices, not higher utilization.
July 2018 Vizient Drug Price Forecast Key therapeutic class summaries Immunomodulators, oncology drugs, and plasma products
Multiple sclerosis Rheumatoid arthritis
Top 5 MS drugs Top 5 RA drugs
7.33% Drug (brand name) 8.57% Drug (brand name) Period projected inflation rate Period projected inflation rate Ocrelizumab (Ocrevus) Infliximab (Remicade)
Generic competition for top-selling Natalizumab (Tysabri) Biosimilars of infliximab have had Adalimumab (Humira) disease-modifying therapies is Glatiramer (Copaxone) a slower volume penetration than Etanercept (Enbrel) increasing; adoption of the generic anticipated due to reimbursement alternatives is slower, but their Fingolimod (Gilenya) issues and competitive contracting. Abatacept (Orencia) market share is beginning to grow. Dimethyl fumarate (Tecfidera) Certolizumab (Cimzia)
Plasma (IgIV, albumin) Oncology 3.10% 4.32% Period projected inflation rate Period projected inflation rate
Plasma-derived product utilization continues to grow in both the U.S. PD-1 and PD-L1 inhibitors continued to make headlines with and emerging markets as a result of new indications and improved the approval of new indications and increased utilization. These patient access. Manufacturers are increasing production to meet higher- costly medications account for a high percentage of oncology than-expected demand. pharmacy spend.
July 2018 Vizient Drug Price Forecast Key therapeutic class summaries Infectious disease agents
Antibacterials/antifungals Hepatitis C medications Vaccines 1.45% 0.00% 5.76% Period projected inflation rate Period projected inflation rate Period projected inflation rate
Cost drivers among antibacterials include Overall annual spend on direct-acting Pneumococcal vaccines continue to antibiotics for drug-resistant and gram- antivirals has increased by 12,600% since dominate spend in the vaccine category, negative organisms, and increasing prices the launch of the first product in 2013, but but there is a robust pipeline of for older generics. Trends in antifungal the market for these drugs has peaked. investigational vaccines, including both new spend have not changed substantially products and competitors for existing ones.
Top five antifungals Top seven hepatitis C medications Top 10 noninfluenza vaccines
1 Azoles 1 Harvoni 6 Viekira 1 Prevnar 6 Proquad
2 Echinocandins 2 Epclusa 7 Vosevi 2 Gardasil 9 7 Engerix B (Adult)
3 Flucytosine 3 Sovaldi 3 Pneumovax 8 Varivax
4 Amphotericin 4 Zepatier 4 Boostrix 9 MMR
5 Nystatin 5 Mavyret 5 Adacel 10 Menactra
July 2018 Vizient Drug Price Forecast Hot topics
Drug shortages Upcoming regulation milestones Drug shortages appear to have peaked, but the total is not trending down. DSCSA Vizient continues to advocate on behalf of our members to our suppliers and The Drug Supply Chain Security Act establishes a national system to trace government agencies. certain prescription drugs as they are distributed and outlines a 10-year plan to 0 build an electronic information exchange system to support drug tracking. 00 2019 2020 2023 2 0 200 183 1 0 Nov 27 Nov 27 Nov 27 100 Distributor: Dispenser: Manufacturer: Receive product with unique Accept only serialized Participate in package level 0
No of active shortages active of No identifiers products (2D barcode traceability system identifiers) 0 Accept returns only Distributor: with TI, TS Verification of unique Participate in package level 2012 201 201 201 201 201 product identifiers traceability system Dispenser: Participate in package level traceability system How close were we? To evaluate the accuracy of past Drug Price Forecast purchase projections, we USP chapters <797> and <800> compared the estimates made in three previous forecasts with the actual rate These new drug compounding standards may require new Deadline of drug price inflation (wholesale acquisition cost). construction or remodeling, as well as necessary steps to Dec 1, 2019 On average, our projections were found to be within 1 percentage point of ensure staff safety from hazardous drug exposure actual inflation rates.
7 9% 8 7 4% 7 6% 7 3% 6 8% 6 0% 6 2% 5 4% Price change (%) Price 2 1 Jul 201 Jan 201 Jul 201 Jan 201 Jul 201 Jan 2018
sti ate c ange ali ate ctual c ange sti ate c ange ro ecte July 2018 Vizient Drug Price Forecast 290 E. John Carpenter Freeway Irving, TX 75062 (972) 830-0000 www.vizientinc.com
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