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An increasingly large piece of the pie - Forecast of expenditures on specialty drugs 2022-2026

The Dutch national associations of hospitals have asked SiRM to develop a forecast for expenditures on specialty drugs, so that these expenditures can be better taken into account in budgeting. To forecast expenditures, we built a bottom-up model in which the net increase is calculated based on seven components. Based on our model, we expect specialty drug expenditures to increase by an average of ~7% annually from 2021 to 2026. In total, expenditures will increase by ~€1 billion during this period.

Publication 5 July 2022

In the Netherlands, the national budget for specialist medical care is determined without separately taking into account the expected development of expenditures on specialty drugs. The main reason for this is the lack of knowledge on how these expenditures will develop. In preparation for a sector-wide agreement in healthcare, the Dutch national associations of hospitals (both university and non-university) have therefore asked consultancy firm SiRM – Strategies in Regulated Markets – to develop a forecast for expenditures on specialty drugs, so that these expenditures can be better taken into account.

To forecast this development, we built a bottom-up model in which the net increase in expenditures is calculated based on seven components: changes in demographics and incidence, additional uptake of recently introduced specialty drugs, the introduction of new specialties and indication extensions and corresponding substitution of existing specialty drugs, new generics and biosimilars, and measures by the Dutch government, hospitals and medical specialists.

The input and underlying assumptions for each of these components are based on input from the Dutch Horizon Scanning initiative, desk research and an advisory committee, and on data from Dutch Hospital Data, the Dutch Cancer Registry, and Statistics Netherlands. In the methodological annex (in Dutch) we explain the input, assumptions, and modelling in detail.

Based on our model, we expect specialty drug expenditures to increase by an average of ~7% annually from 2021 to 2026. In total, expenditures will increase by ~€1 billion. Uncertainty about future events and missing data requires the expenditures forecast to be presented with a margin of error. We therefore worked with scenarios with lower and higher expenditures, together forming a bandwidth. We selected four specific subjects that are both uncertain and have a significant influence on the outcomes: the expected expenses per user, the probability of success of new specialties and indication extensions, the arrival of biosimilars and the effect of measures by government, hospitals and medical specialists. Further research can reduce some of this uncertainty, but it will always be necessary to use a bandwidth in the forecast.

Written by

Saskia van der Erf
Partner
Mainly active in International Health Systems, Pharmaceutical care, Emergency care and Mental Healthcare
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+31 6 41 36 23 59 jp.heida@sirm.nl

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+31 6 21 32 55 55 pam.vandermeer@sirm.nl

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