In 2018, the price for pharmaceuticals for use in both hospital andnon-acute settings is expected to rise 7.61 percent.

This is due in part to the increasing reliance on high-pricedspecialty medication and less use of generic drugs, according toVizient Inc.’s July 2017 Drug Price Forecast.

“The latest Drug Price Forecast highlights numerous marketdynamics that continue to contribute to rising pharmaceutical costsand exacerbate the challenge of managing health system pharmacyexpenses,” says Dan Kistner, senior vice president, pharmacysolutions for Vizient. “Pharmacy leaders – now more than ever –must be proactive and strategically plan to address these issuesand implement cost-saving and quality optimization measures.”

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The ever-increasing number and use of high-cost specialtymedications such as “biosimilars” and “orphan drugs” have resultedin a significant increase in noncontract product purchases,according to the report.

At the same time, use of less expensive generic brands willcontinue to decrease, even though prices on some popular genericdrugs continue to drop, according to the report.

“The topic of the high cost of medications continues to drawbipartisan scrutiny within the U.S. Congress,” the authors write.“Several pending pieces of legislation introduced in 2017 attemptto remove barriers to generic and biosimilar development as well asexpedite approval of competition when limited numbers ofmanufacturers exist for critical medications. This focus on drugcosts has prompted several suppliers to pledge that they will limitprice increases to certain thresholds or even externally definedindices.”

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Vizient analyzes the cost of pharmaceuticals that its pharmacyprogram participant organizations will purchase between Jan. 1,2018, and Dec. 31, 2018 – either within its contracts orelsewhere.

The Irvine, Texas firm bases inflation estimates for theforecast period on past price change history during the last 36months where available, as well as current knowledge of contractallowances and marketplace factors such as expiring patents andanticipated new competition — along with experience — to develop aprojected inflation estimate.