Biosimilars, generics to slow drug cost increases in 2022

Biosimilars and generic drugs are poised to slow drug cost growth this year, a new report indicates.

Total drug spending increased 7.7% from 2020 to 2021 to $576.9 billion, driven by an uptick in the utilization of COVID-19 therapies, according to an American Society of Health-System Pharmacists analysis. Drug prices only increased 1.9% in 2021, in part thanks to new biosimilars and generics that came to market.

Drug spending rose 4.9% to $535.3 billion from 2019 to 2020 while prices ticked up 0.3%.

“Biosimilars really took off this year,” Eric Tichy, lead author of the report and division chair of supply chain management at Mayo Clinic, said in a news release. “In oncology, we’re using more biosimilars than we are the originator drugs. A couple of years ago there was a lot of consternation about the uptake of biosimilars being slow, but that has turned around. Their use is likely to continue growing and it’s saving the healthcare system a lot of money.”

Here are five takeaways from the report:

1. The Food and Drug Administration approved four biosimilars in 2021 and three came to market. Nine of the 34 approved biosimilars are being delayed due to patent litigation brought by the associated biologic manufacturer. Twenty-one were available in the U.S. market as of February. The FDA approved of the first biosimilar for macular degeneration, ranibizumab-nuna. Clinics spent $1.7 billion on its biologic reference, ranibizumab, in 2021. Two biosimilars used for insulin were also deemed interchangeable, related to the biologics Humira and Lantis.
2. Clinics’ biosimilar spending increased to $5.3 billion in 2021, up from $4.3 billion in 2020. Hospitals’ biosimilar expenditures increased to $1.1 billion, up from $700 million. Market shares for cancer and autoimmune biosimilars grew at a significant pace.
3. Hospitals accounted for $39.6 billion of 2021 spending, an 8.4% increase, and clinics accounted for $105 billion in spending, a 7.7% increase. Higher utilization and new drugs drove spending growth, even though drug prices decreased by up to 1.4%. That situation is likely to change in 2022 if manufacturers attempt to pass along their increased costs, the report said. “In the inpatient setting, there was a huge amount of expensive drug use with remdesivir and tocilizumab being used when normally tocilizumab is for outpatients,” said Erin Fox, senior pharmacy director at University of Utah Health. “Even though prices didn’t necessarily escalate, the inpatient settings spent more.”
4. Remdesivir, used to treat COVID-19 patients, dominated hospital drug spending at $3.1 billion, outpacing the next three drugs combined.
5. Several expensive branded drugs may lose their patent protection this year. Hospitals and clinics spent $1.2 billion on the branded version of the chemotherapy drug pemetrexed in 2021, $1.1 billion on the chemotherapy drug bortezomib, $712 million on the diabetes drug vasopressin, $652 million on the imaging drug regadenoson and $495 million on the chemo drug lenalidomide. Each of those branded drug’s patents are set to expire.