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January 27, 2022 04:41 PM

Hospitals spent more than $1B on remdesivir last year

Alex Kacik
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    money and pills
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    Hospitals spent more on remdesivir, the antiviral medication used to treat COVID-19, last year than any other drug, a new report shows.

    It was the first time since 2012 that AbbVie's rheumatoid arthritis biologic Humira didn't top the list, according to Vizient's drug price outlook. Still, Humira was the largest contributor to drug price inflation last year and will likely remain that way until 2023, when multiple biosimilars are expected to hit the market.

    "More and more spend is with the high-cost biologics like Humira, which take fairly routine price increases each year. A smaller group of products account for a greater amount of the spending," said Steven Lucio, senior principal of pharmacy solutions at the group purchasing organization, noting that Vizient's member hospitals spent more than $1 billion on Humira last year. "Once Humira has competition, we would expect a significant decrease in spending."

    AbbVie has benefited from nearly 20 years of exclusivity for Humira, which has been protected by a thicket of patents. Humira's net price in the U.S. increased an estimated 29.6% from the beginning of 2017 to the end of 2020, related research has shown, noting that prices usually spike near the end of a drug's exclusivity.

    Overall drug price inflation is expected to continue to slow in 2023 at a rate of 3.09% from July 1 through June 30, 2022, the group purchasing organization estimates. That was largely due to the growing number of generic drugs and biosimilars coming to market, according to the report.

    But biosimilars have had a relatively slow adoption rate, which is why biologics like Keytruda—a cancer drug developed by Merck—will drive drug price inflation over the next several years, Lucio said.

    "So much of the investigational drug pipeline is directed toward oncology, neurology and autoimmune conditions. So even when spending on Humira recedes, other drugs for rheumatoid arthritis, multiple sclerosis and other diseases will be prominent," he said.

    Like other brand-name drugs, Gilead Sciences has freedom in setting the price for Veklury (the branded version of remdesivir), which costs about $2,000 for the three-day outpatient regimen and $3,000 for the five-day inpatient regimen, said Erin Fox, senior pharmacy director at University of Utah Health.

    Hospitals have little choice but to accept the price, and there are no discounts, contracts nor readily available direct alternatives, she said.

    "This is a very high-cost drug for the inpatient setting," Fox said.

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    MH Illustration/Getty Images

    Allocations of remdesivir were sparse at the outset of the pandemic, which led to a collaboration between University of Utah Health and HCA Healthcare, Steward Health Care and Intermountain Healthcare to develop rationing criteria. But the supply has shored up since the Food and Drug Administration approved the treatment, Fox said.

    Health systems have gotten better at limiting the use of high-cost drugs, experts said. But pharmacists could still be more closely involved in the contract negotiation process, Lucio said.

    "Pharmacists are not historically as well connected in managed care organizations and payer agreement negotiations," he said. "There's a lot of information that pharmacists can provide to their colleagues in those circumstances."

    About 94% of 387 pharmacists recently surveyed said most health systems will look to pharmacists to design strategies for managing the financial impact of high-cost medications, according to a report from the American Society of Health-System Pharmacists.

    Drug companies raised the prices of 784 drugs this month by an average of 5%, outpacing last January's 4.6% average rate, according to a report by GoodRx. Patients often have to pay more out of pocket as list prices increase, which can have fatal consequences, research shows.

    A $10.40 increase in out-of-pocket costs per prescription was associated with a 22.6% drop in consumption and a 32.7% increase in monthly mortality rates, a 2021 analysis of more than 358,000 relatively healthy 65-year-old Medicare beneficiaries found.

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    Remdesivir didn't shorten hospital stays, improve mortality: WHO study
    Hospitals can purchase remdesivir directly from distributor
    Hospitals will have to start paying for COVID-19 drug remdesivir this summer
    Will using remdesivir save hospitals money?
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