More Hospital Drug Spending Is Going Toward Cancer Immunotherapies

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  • Dec 06, 2019

from STAT – December 6, 2019
by Ed Silverman

Amid intense scrutiny over prescription drug costs, a new analysis finds some hospitals are spending a larger share of their budgets for new cancer and migraine treatments, as well as for a biosimilar version of a brand-name drug that is used to prevent white-cell depletion in patients given chemotherapy.

Not surprisingly, the spending reflects a growing trend among hospitals to shell out more of their dollars for outpatient infusion treatments and, in particular, costly specialty drugs, according to Bonnie Lai, vice president of product management at Lumere, a research and analytics firm that focuses on hospitals and generated the data from 26 facilities across four hospitals systems.

Specifically, there was a 199% rise in spending for pricey immunotherapies that treat small cell lung cancer during the first three quarters of this year compared with the same period in 2018. This was the category that saw the biggest proportionate rise in spending, with Merck’s Keytruda accounting for the lion’s share of the outlay. Overall, these medicines accounted for 1.2% of drug spending.

Meanwhile, there was 90% growth in spending for migraine prevention medications, a therapeutic category that has generated substantial interest thanks to a pair of new drugs that were launched last year. However, most of the spending was directed to just one of those treatments, an Amgen (AMGN) medicine called Aimovig. This category accounted for 0.4% for drug spending.

“What we hear from hospital pharmacies all the time is that there are a lot of new expensive drugs entering the market and so it’s a real challenge for them whether or not to adopt the drug for the appropriate patient population,” said Lai. “It’s something hospitals are struggling with constantly.”

Nonetheless, the data did reveal an interesting development. There was a 79% increase in spending for medicines to treat neutropenia, an abnormally low white blood cell count. But most spending in recent months was for Udencya, a biosimilar version of Neulasta, a brand-name Amgen drug. Coherus, the manufacturer, earlier this year claimed to have launched at a 33% lower list price, although the average sales price was 6% below the Neulasta level earlier this year, according to a report by Bernstein analyst Ronny Gal.

Similarly, the Lumere data indicated Pfizer’s Inflectra, a biosimilar version of the Remicade rheumatoid arthritis drug, is making inroads. From the first quarter of 2018 through the third quarter of 2019, the Pfizer (PFE) medicine doubled its share of hospital spending, while spending for the Johnson & Johnson (JNJ) brand-name medication shrunk by half.

These developments illustrate that some biosimilars are finding acceptance, an issue that is widely debated because only about half of the two dozen or so biosimilars approved by the Food and Drug Administration have yet launched due to ongoing patent litigation. Moreover, there is concern that discounts for biosimilars are not as great as had been anticipated.

In any event, we should note there are some limitations to interpreting the data. For one thing, this is merely a snapshot, since the ordering and wholesaler data was plucked from only four hospital systems in different parts of the country. Moreover, Lumere did not provide actual dollars spent or include the effect of any rebates or discounts that might have influenced spending.

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