However, he insists there is still plenty of time to recover in the title race.
Barca are now five points behind in-form Real Madrid at the top of the La Liga standings following the result, which saw Pep Guardiola's side pegged back by an 86th-minute equaliser from Alvaro having taken an early lead through Cesc Fabregas.
Busquets said: "There's a long way to go in the season. It's obvious that it's better to be ahead than behind, but let's see if we can cut the difference. We have to continue working hard.
"More than taking a point, we've let two slip. At the end of the first half we were made to suffer because they had some very clear chances. In the second half we were better than Espanyol, but in the end they've got a draw. We had chances to win it but it wasn't to be.
"Although we deserved more, we were up against a difficult opponent and there's nothing we can do about it now."
Barca defender Gerard Pique added on his club's website: "We have to move forward, the season is very long and we cannot think about if we'd won or lost.
"They (Madrid) will drop points and so will we, we have to try and lose as few as possible and end up on top."
Winger Pedro said: "It was a tough blow because we had the game under control. We need to carry on, there are a lot of games and a lot of points left to play for."