Rise in drug costs to hospitals, clinics slowing in 2013

February 18, 2013, St. Jude Children's Research Hospital

Even though costs for medications will continue to rise in 2013 by as much as 4 percent, the increase is projected to be less than in previous years, according to a report in the advance online publication of the American Journal of Health-System Pharmacy, the journal of the American Society of Health-System Pharmacists (ASHP).

The report, "Projecting Future Drug Expenditures in U.S. Non-Federal Hospitals and Clinics—2013," looked at drug expenditure trends in 2011 and 2012, projects drug expenditures for 2013 and examines factors likely to influence drug expenditures. Based on a variety of data, including new drug approvals and patent expirations, the authors project a 1–3 percent increase in drug expenditures across all settings, a 2–4 percent increase in expenditures for clinic-administered drugs, and a 1.5 percent increase in hospital drug expenditures for 2013.

"In the aggregate, drug expenditure growth is moderating, especially in the hospital setting," according to the report's principal author, James M. Hoffman, Pharm.D., who is the medication outcomes and safety officer and an associate member in the Department at St. Jude Children's Research Hospital. "But when we focus on specific drugs, such as drugs frequently used in clinics, we also see dramatic increases in expenditures. Cancer therapies in particular stand out as costly drugs for hospitals and clinics, and the paper summarizes the high costs for new oncology agents that came on the market in 2012 and the top 20 antineoplastic drug expenditures in clinics in 2011 and 2012."

The overall rise in is less than in previous years, according to the authors. The increasing availability of less-expensive generic product is a primary factor reducing drug expenditures.

From September 2011 to September 2012, prescription sales in the U.S. totaled $326 billion, a 0.8 percent increase from the previous 12 months. The growth rate was the lowest in recent history. The authors attribute this slowing to modest increases in expenditures for new products (3.3 percent) and pricing of existing products (5.9 percent), coupled with a marked decline in overall volume and mix (less than 8.4 percent).

Retail pharmacies, mail-order pharmacies and clinics accounted for the majority of prescription expenditures. Oncology medications and biologics continue to be large and important expenditures for hospitals and clinics. Antineoplastic agents were the top medication expenditures in nonfederal hospitals in 2012, accounting for 15.1 percent of all hospital drug expenditures in 2012, while oncology products accounted for 32.2 percent of drug expenditures in clinics during the first nine months of 2012.

Hoffman noted the significant number of expensive cancer therapies that have been approved in recent years. "We have reached a new threshold where a course of treatment for some new cancer therapies can cost more than $100,000, which illustrates the growing challenge oncology drug costs present to hospitals and clinics," he said.

Hoffman added that several other developments will influence prescription drug expenditures in coming years, including the Food and Drug Administration's implementation of an approval process for biosimilars and other actions that facilitate the introduction of generic drugs into the medication pipeline. Although unresolved issues remain, the introduction of biosimilars will present a new cost savings opportunity for the health system, but biosimilars are not expected to influence drug costs in 2013.

ASHP has published this report since 1992, with Hoffman leading the team producing it since 2004. Data for the analysis were obtained from the IMS Health National Sales Perspectives (NSP) database. The NSP sample is derived from more than 1.5 billion annual transactions from more than 100 pharmaceutical manufacturers and more than 700 distribution centers.

Explore further: Expenditures for glaucoma medications appear to have increased

Related Stories

Expenditures for glaucoma medications appear to have increased

June 13, 2011
In recent years, spending for glaucoma medications has increased, especially for women, persons who have only public health insurance and those with less than a high school education, according to a report published Online ...

Britain snubs costly Novartis blood cancer drug

February 13, 2013
British health authorities said on Wednesday they would not recommend Jakavi, a drug produced by Swiss pharmaceutical company Novartis to treat a rare form of blood cancer, deeming it too expensive.

Provinces could save millions in prescription drug costs, new research finds

June 27, 2012
Taxpayers could save millions of dollars if hospitals and provincial governments harmonized their prescription drug plans, new research suggests.

Toward competitive generic drug prices in Canada

November 19, 2012
The commitment of Canadian premiers to lower generic drug prices is a major change in how the country prices generic drugs, and government should learn from past attempts, states an article published in CMAJ (Canadian Medical ...

Recommended for you

In most surgery patients, length of opioid prescription, number of refills spell highest risk for misuse

January 17, 2018
The possible link between physicians' opioid prescription patterns and subsequent abuse has occupied the attention of a nation in the throes of an opioid crisis looking for ways to stem what experts have dubbed an epidemic. ...

Patients receive most opioids at the doctor's office, not the ER

January 16, 2018
Around the country, state legislatures and hospitals have tightened emergency room prescribing guidelines for opioids to curb the addiction epidemic, but a new USC study shows that approach diverts attention from the main ...

FDA bans use of opioid-containing cough meds by kids

January 12, 2018
(HealthDay)—Trying to put a dent in the ongoing opioid addiction crisis, the U.S. Food and Drug Administration on Thursday slapped strict new restrictions on the use of opioid-containing cold and cough products by kids.

Taking ibuprofen for long periods found to alter human testicular physiology

January 9, 2018
A team of researchers from Denmark and France has found that taking regular doses of the pain reliever ibuprofen over a long period of time can lead to a disorder in men called compensated hypogonadism. In their paper published ...

Nearly one-third of Canadians have used opioids: study

January 9, 2018
Nearly one in three Canadians (29 percent) have used "some form of opioids" in the past five years, according to data released Tuesday as widespread fentanyl overdoses continue to kill.

Growing opioid epidemic forcing more children into foster care

January 8, 2018
The opioid epidemic has become so severe it's considered a national public health emergency. Addiction to prescription painkillers, such as oxycodone and morphine, has contributed to a dramatic rise in overdose deaths and ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.