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Nine years ago, Catherine Hofstetter was diagnosed with a
severe case of rheumatoid arthritis (RA), a crippling auto-immune disease that
almost paralyzed her career. "It felt like someone set a bomb off in my body," says
the 45-year-old president of McGowan Fence, of the devastating effects of RA. They
can include permanent loss of mobility and severe pain.
Hofstetter was accustomed to working 12 hours a day, six days
a week at the Toronto family business and leading a busy social life. But in the
first year of contracting RA--a leading cause of workplace absence--she was
struggling to put in five hours, Mondays through Thursdays, at the office. "By
Friday, it was difficult to get out of bed," she recalls.
Hofstetter tried a gamut of medications over a nine-year
period. But nothing really worked. Then along came Enbrel--a second-line treatment
for RA. The breakthrough medication (a term used to classify drugs by the Patented
Medicines Review Board in Ottawa) was approved by Health Canada last December and
began appearing on employer formularies in the spring. Hofstetter started taking
the drug in August and can't say enough good things about it.
Within the first two weeks of administering her own
injections, she noticed her energy increase dramatically. "I came in to work on a
Saturday [after putting in a full week] and then on Sunday I tore up the garden."
Today, Hofstetter is back to her six-day work weeks.
Remicade is another breakthrough drug that, like Enbrel, is
having a significant impact on RA. Approved in June for Crohn's disease and in
September for RA, it addresses the root cause of both auto-immune diseases--a
protein that the body has ceased to produce.
Enbrel and Remicade are both biologics--an emerging class of
drugs derived from human or animal proteins. Biologics are known for their ability
to specifically target the root cause of a disease and remedy an illness. There are
only a handful or so of biologics available in Canada today, says Theodora
Samiotis, a spokesperson with Wyeth-Ayerst Canada Inc. in Markham, Ont. That
company manufactures Enbrel. But more of these promising medicines are expected to
come to market over the next five years.
The improvement in patient health and productivity from
biologics, like Remicade and Enbrel, is impressive. But these benefits do not come
cheaply. Hofstetter's annual bill for Enbrel is about $20,000--an expense that is
currently being picked up by her former husband's benefits plan. Remicade is in a
similar price range. Wyeth-Ayerst says biologics are expensive because the research
and development process behind them is extremely extensive and time
consuming.
FOCUS ON FORMULARIES
The cost of drug plans is climbing higher each year as organizations try to keep
pace with newer and better treatments. Denise Balch, president of Connex Health
Consulting in Burlington, Ont., says that some employers fear that high-cost drugs
will put their plans in jeopardy.
The solution for an increasing number of organizations is
closer scrutiny of what drugs their formulary covers and for whom. Employers are
looking into formularies that put all new drugs through a rigorous therapeutic
review process before they are added to the formulary, says Jane Petruniak, a
consultant with Watson Wyatt in Toronto.
The objective is to build a managed or controlled
formulary--as opposed to restricting the use of certain drugs altogether--that
curbs misuse, catches improper prescribing and uses therapeutic substitution where
a comparable and cheaper product does exist.
Petruniak points to Celebrex, an arthritis treatment, as an
example of how formularies can be tightened. "This [drug] is being used as a
first-line treatment for no good therapeutic reason. People are just deciding, 'I
want to take Celebrex,' and getting it."
With more than 5,000 employees in Canada, Toronto-based Inco
Ltd. is concerned about inappropriate prescribing, says Anastassia Melvaer, the
company's benefits manager. "Doctors are skipping to second- and third-line
treatments before trying the first," she says. Inco is looking at various ways to
manage its drug costs.
Another large Canadian employer, that did not want to be
identified, is implementing what it calls an 80/80/80 program. The objective is to
ensure 80% of all drugs are first prescribed on a trial basis, 80% are filled with
generics and that 80% of all so-called maintenance drugs, such as thyroid
medication, are filled for a 100-day period to reduce dispensing fees.
The Canadian Auto Workers (CAW) union has experimented with a
restricted formulary since 1993. In 1999, the Big Three automakers and the CAW
limited their formularies to generics, unless a prescribing physician specified
that no substitution be used. Some drugs, such as Celebrex, that are not on the
formulary, are covered if an employees' physician fills out a special authorization
form, says Sym Gill, director of pension and benefits with the CAW in
Toronto.
These organization are in the minority, though, says Darryl
Leach, an actuary with Towers Perrin in Toronto. He adds that most employers are
still using traditional formularies without restrictions. "This gives them no
control over costs. Just because a drug is added to a formulary, doesn't mean it is
doing more [in terms of improved treatment] than another drug. It may just cost
more."
A recent study on antibiotics illustrates Leach's point. The
U.S. research, published in the Journal of the American Medical Association,
reports that the success rate for patients with acute sinusitis who were treated
with older antibiotics was 90.1%, compared to 90.8% for patients receiving newer,
more costly drugs.
POTENTIAL SIDE EFFECTS
The downside of not covering all new drug releases is that it has the potential to
jeopardize the health of the organization, raise liability issues and anger
employees. "A few years back when the benefits industry started to slash and burn
drug plans, we learned that this could have an impact on the workplace in terms of
health and productivity," says Barry Noble, national director of managed care with
Manulife Financial in Toronto.
Gill of the CAW concedes that while a restricted formulary
has had a positive impact on costs, there have been complaints from plan members
about the restrictions. Bruce Stevens, chair of the Insurance Trustees for the
Employees of the Simcoe County District School Board in Barrie, Ont., says employee
groups that his board represents "will not buy into restricted formularies." The
board is moving ahead with caps on coverage as another solution to curbing drug
costs.
"Companies that don't have co-pays are looking hard at
putting them in," says Petruniak, adding "otherwise it is like giving [employees] a
charge card for drugs." This is a preferable method of reducing costs among
employees. The Aventis Healthcare Survey, released in May, shows that 91% of plan
members want their benefits plan to cover all drugs, and 56% will pay higher
premiums to maintain their current coverage.
Dr. Arif Bhimji, president of At Work Health Solutions Inc.
in Toronto, supports the pharmaeconomic approach to determining which drugs should
go on an employer's formulary. But he adds that, in some cases, organizations can
benefit from covering expensive therapies that they regard as lifestyle drugs. For
example, Dr. Bhimji says the manufacturer of the anti-obesity drug, Xenical, has
demonstrated how obesity contributes to higher overall healthcare costs and reduced
productivity in the workplace.
WHAT'S OLD IS NEW AGAIN
If employers do limit their formularies or call for generic substitution, it is
important that they keep up with the research developments behind existing drugs
that are resulting in promising new treatment options. Xenical is a case in point.
Louise Couture, pharmacist and national manager for private healthcare with
Hoffmann-La Roche Ltd. in Mississauga, Ont., says Xenical will be approved by
Health Canada as an adjunct treatment for Type 2 diabetes this month or in January
2002.
Couture explains that 90% of individuals with Type 2 diabetes
are overweight and many are obese. In fact, excessive weight is one of the leading
causes of the illness. Ironically, many existing treatments for this form of
diabetes cause weight gain, she says.
Xenical addresses the metabolic issues of individuals with
Type 2 diabetes, helping them to lose weight and better manage their condition,
explains Couture. She adds that while some private payers have dismissed the drug
as a lifestyle medication, this development demonstrates its medical
necessity.
Paxil, which has been on the market for about 10 years, is
another example of how an existing drug has been found to be effective in treating
more than one condition. The anti-depressant manufacturered by GlaxoSmithKline of
Mississauga, Ont. was given the green light by Health Canada to be used as a
treatment for generalized anxiety disorder in late August. It is the only selective
reuptake inhibitor (SSRI) approved for this debilitating condition, which is
characterized by excessive worrying and anxiety. In the U.S., the drug is also
being reviewed for the treatment of post-traumatic stress disorder.
THE COST CONTAINERS
While drugs such as Enbrel and Remicade have garnered much attention--in part
because of how expensive they are--the news on the new drug front isn't all about
cost increases. Nexium, Astra Zeneca's new gastrointestinal drug, costs less than
the manufacturers' current popular treatment, Losec. A 40-milligram dose of the new
drug, which was recently approved by Health Canada, is $2.10 compared with $2.20
for a standard 20-milligram dose of Losec.
Remeron is another drug with a low price tag. The brand name
anti-depressant was approved by Health Canada in May and is priced significantly
below the SSRI class of anti-depressants that include Prozac and Zoloft. This is
good news for employers as anti-depressants are now among the most common drugs
prescribed.
Sill, with more biologics in the pipeline and work on the
genome project only five years away from fruitition, plan sponsors can't count on
the Remerons and Nexiums of the world to save their drug plan's bottom line. "Down
the road, five, 10 and 15 years, there will be good and bad news" in terms of new
drugs, says Noble. "We will be doing a better job of treating illness and disease
but there will be a pharmaceutical cost associated with that."
Marg French, a consultant with William M. Mercer Ltd. in
Toronto, says employers, pharmacy benefits managers and insurers need to work
together on assessing drugs and finding ways to save money. She also urges
organizations "to push for innovative insurance, meaningful reporting, stronger
administration and prescribing guidelines." These measures can help employer drug
plans keep up with the pace and cost of pharmaceutical science. BC
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