This month marks the second anniversary of the beginning of the coronavirus pandemic, a 24-month span that has had profound effects on the health of benefits plan members and the status and structure of their plans.
For drug plans in particular, several trends have come to light — or have accelerated — during the course of the pandemic and are continuing in 2022.
Joyce Wong, director of clinical services and drug plan management and drug database at Express Scripts Canada, says a backlog of patients that began in 2020 — attributed to the temporary provincially-mandated limit on prescriptions to 30-day supplies to prevent drug shortages — will likely continue to impact drug plans into 2022, albeit at diminished levels.
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“Last year, we looked at diabetes and cancer as two areas of focus and we’ll continue to follow that story to see whether the backlog has petered out or is continuing because of [the Omicron] wave. There’s questions to be answered there.”
By the numbers
• 60% — The percentage of plan members who’ve been diagnosed with at least one chronic condition. Among this group, 28% said they take three or more medications.
• 69% — The percentage of plan members with diabetes who take three or more medications. Those with arthritis (53%), cardiovascular disease (46%) and cancer (43%) were also more likely to be taking three or more medications.
• 39% — The percentage of plan sponsors — among the 68% who expressed concerns about their overall health benefits plan in 2021 — that said drug plan sustainability is their top concern.
Source: 2021 Benefits Canada Healthcare Survey
The Canadian Automobile Dealers Association — which has about 72,000 benefits plan members across 1,800 dealerships — has experienced similar impacts in recent months, according to Karen O’Connell, its director of governance and benefits plan management. “We’ve seen a higher volume of drugs coming through the plan — [members] are claiming more and we’re seeing more prescriptions per person. We don’t know if it’s because of job uncertainty or they’re just making sure they always have a supply.”
The pandemic is also raising questions about the coverage of new antiviral treatments for coronavirus infections, such as one developed by Pfizer Inc., says Jennifer Schmidt, a principal at Mercer Canada. While the federal government’s December 2021 fiscal update indicated there’s money for these treatments, she notes it remains to be seen precisely how they’ll be covered. “It could be done within the public system, similar to some cancer treatments. But a lot of cancer treatments have moved outside of the public system and are done on an outpatient basis, so that hits the private plans.”
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And while the pandemic has led to an increased use of mental-health drugs, Frédéric Leblanc, pharmacist and strategic leader of drug programs for iA Financial, says he’s seen a subsequent decrease in the use of other medications. “There’s been a sharp decrease in utilization of drugs related to infection and acute injuries or surgery. There’s fewer cases because people have less contact [with each other].
“The feedback we’re getting is that because of the pandemic, in terms of overall benefits, drugs aren’t very high on our plan sponsor clients’ radars. They have greater concerns, like mental health. The impact of the pandemic isn’t so much on the drugs, but on what plan sponsors should do to manage mental health and provide advice to employees and put in place programs and services to support them.”
When it comes to biosimilars, private drug plans are following the lead of their public counterparts and increasing the use of these drugs as a cost-saving measure, says Joanne Jung, director of health and group benefits and pharmacy practice leader for Canada at WTW, formerly Willis Tower Watson.
Read: New Brunswick expanding biosimilars policy in public drug plans
“It depends on the insurers. Some are applying that approach across a block of business and having everyone switch to biosimilars, while some are sticking with product listing agreements. But this is definitely something big that’s been under consideration for all plans. . . . Every province is different. In B.C., for example, there’s a universal pharmacare program and if you don’t align with its biosimilars strategy, the province no longer pays for the drug and the cost will shift back to the plan sponsor.”
Schmidt says she’s hopeful that 2022 will bring more consistency to those provincial biosimilars policies. “It’s really important from a patient perspective to have consistency applied to how it works. Our provincial medicare systems are different so there’s already that layer, but it would be nice to get some consistency. In terms of planning for the future, we’re also monitoring how the government and carriers are handling it, because it also affects plan members.”
The potential impact of PMPRB reforms and national pharmacare
Regulatory changes at the Patented Medicine Prices Review Board — designed to lower the cost of patented medicines in Canada — were delayed again in January.
However, even when the changes eventually come into force, they won’t have an immediate effect on drug pricing, says WTW’s Joanne Jung. “Maybe it would make a difference down the road, but many carriers are actively negotiating product listing agreements to bring down the prices for expensive drugs before they’re listed with a carrier.”
Similarly, a much-discussed national pharmacare program was absent from the 2021 federal budget. Instead, the government reiterated its support by stating it will proceed with a previously announced $500-million funding program for high-cost drugs used in treating rare diseases.
And while the future of a national program is unclear, iA Financial’s Frédéric Leblanc says private payers could play a pivotal role. “Currently, private payers are funding roughly 45 per cent of the entire drug expenses. That’s a lot of money, so we think there’s a role for private payers to continue the funding of private drug plans.”
This trend has also helped absorb the impact of rising inflation on drug prices, adds Jung. “Biosimilars have helped curb [the impact of inflation], either through switching to biosimilars or product listing agreements with the originator brand. In 2020, the drug trend was sitting at around three to five per cent.”
According to a 2021 report by Telus Health, specialty drugs remained the single biggest factor influencing private drug plan management in 2020, accounting for a third of overall costs despite being used by just 1.3 per cent of total claimants.
Read: Drug plan costs increasing for plan sponsors, but experts differ on why
The report found the most prescribed specialty drugs were those that treat rheumatoid arthritis — which accounted for almost 100 per cent of eligible costs — followed by skin disorders, at 62 per cent, and cancer treatments, 79 per cent.
To manage these costs, the CADA is using prior authorization while communicating to plan members about how drugs are priced. “From a philosophical view, [prior authorization] makes sense, not as an extra hurdle but as a step therapy approach so that the lower cost drugs are tried first before escalating to higher-cost drugs,” says O’Connell. “If we’re spending $100,000 on a drug, it’s important that it’s used properly.
“We also want plan members to get the most out of their coverage, so we’ve been helping them understand the components of a drug claim, such as the dispensing fee, markup and drug cost. Just because their doctor recommends it, we’re encouraging them to have a conversation about whether that’s the best drug for them. . . . We understand specialty drugs are a burden on plan members, so we looked at how to manage the low-cost items, going back to plan members asking about the lowest cost drug. That way, we leave more dollars on the table for those high-cost drugs.”
Similarly, Leblanc says the use of prior authorization by his plan sponsor clients remains stable. “I haven’t seen big changes. As a carrier, we’re reviewing . . . our processes and the drugs under which we have prior authorization and trying to balance the health outcomes by getting the right drugs to the right patients, with the economic sustainability of the plan and the patient experience. We know that with [prior authorization], the plan member experience can be a bit more difficult because it takes more time, so we’re trying to improve that.”
Read: Liberals once again delay PMPRB changes to lower price of medicines in Canada
While the increasing spend on high-cost drugs is mildly concerning, he adds, the overall cost is still manageable — due to the introduction of biosimilars and older drugs that are becoming generics — and remains minimal compared with some past expenditures. “[Drug plan spend] has increased slightly in recent years, but it’s not what it’s been in the past. There were years of double-digit growth year over year, because of important drug classes being introduced, such as hepatitis treatments. When the biologics first came to market, the increase in expenditures was very high, but the current increases aren’t what they used to be.”
According to the 2021 Benefits Canada Healthcare Survey, 60 per cent of plan members reported being diagnosed with at least one chronic condition.
Among these respondents, 28 per cent said they take three or more medications. Within disease states, 69 per cent of members with diabetes take three or more medications, while the same was true for members with arthritis (53 per cent), cardiovascular disease (46 per cent) and cancer (43 per cent).
Among Leblanc’s plan sponsor clients, the very concept of what defines a lifestyle drug — and whether or not it will be covered by a drug plan — is currently being re-evaluated. “I don’t think ‘lifestyle’ is the right definition,” he says. “It often includes drugs to treat fertility, obesity, smoking and hair loss — it’s not a lifestyle not to have hair. There was a belief that these conditions were a choice or self-imposed, like obesity and smoking, but the more you look at these conditions, the science has evolved.
Read: High-cost drugs remain primary cost driver for Canadian public, private drug plans: PMPRB
“Obesity is the best example — it’s not just a question of personal willpower but a multi-faceted issue with genetic, environmental and mental and social factors and it has many health consequences. To exclude these drugs doesn’t make much sense. We’re promoting a change in the coverage of some of the lifestyle drugs that are currently excluded.”
• High-cost drugs continue to account for the largest portion of overall drug plan spend.
• Biosimilars are becoming an increasingly popular option for plan sponsors seeking to reduce these expenditures.
• Plan sponsors are considering and incorporating drug plan usage into their DEI strategies.
The CADA’s drug plan is having similar conversations about obesity treatment, says O’Connell. “There’s been optional coverage [for obesity treatment] at the dealership level, but that doesn’t recognize that it’s a disease like any other. . . . It’s a need that’s out there, especially when you look at rising diabetes rates and other comorbidities associated with obesity.”
The concept of lifestyle drugs is also increasingly tied into plan sponsors’ diversity, equity and inclusion strategies, particularly in light of growing awareness around transgender employees and the rise of social justice movements such as Black Lives Matter.
“We’re trying to look at these things holistically,” says Schmidt. “Your drug costs might go up, but it means more productive days at work [for employees]. You need to hire diverse and inclusive populations and that could mean you’re hiring people with pre-existing disabilities, so you might be picking up medical expenses, but you could also be achieving your DEI objectives. We can’t operate in silos anymore and we need to use a broader lens.”
Read: To achieve DEI goals, plan sponsors can start by reviewing benefits plans
Even the delivery of benefits offerings, such as access to digital pharmacies and virtual health care, is being factored into DEI goals, she adds. “Years ago, we talked about the personalization of benefits and that’s here. It’s a focus on well-being and prevention and meeting as many employees’ needs as possible and personalizing their offerings. It’s also about using all the digital tools that are out there, so supporting remote workers and ensuring access to a suite of offerings is available.
“That goes back to DEI — if you have a suite of offerings and it’s easy to access digitally, then you’re treating someone who lives in an urban centre the same way as someone who lives in a rural area. There’s equity and inclusivity and if you have a digital suite of services, you’re addressing the diversity of your population.”
Blake Wolfe is an associate editor at Benefits Canada.