As the coronavirus pandemic enters its fourth year, it’s perhaps unsurprising that the health crisis has taken its toll on employee mental health.
Scotiabank saw a notable rise in claims for mental-health drugs in 2022, says Ayman Alvi, the bank’s vice-president of global pension and benefits, noting the increased use of these medications aligns with a higher use of mental-health practitioners by employees.
In 2022, the bank increased its annual mental-health coverage limit — from $3,000 to $10,000 — for all eligible employees and their dependants and also expanded the types of mental-health practitioners covered under the plan. “Not that those [practitioners] are necessarily prescribing, but the two trends line up in the same direction,” says Alvi.
It’s hardly a new trend in recent years, says Marie-Hélène Dugal, manager of pharmacy benefit strategy at Medavie Blue Cross. In 2021, the industry saw a rise in the cost per claim for anti-depressants, as well as a larger overall amount of claims for these drugs. “The increase of more costly claims might mean that people in the past had access to older therapies that weren’t as efficient and there are newer treatments that can help plan members treat their depression.”
The pandemic also forced employees to make fewer medical appointments, so the increase in claims for mental-health drugs, as well as for medications used to treat chronic diseases such as cancer and diabetes, is also partly attributable to delayed diagnoses, says Dugal.
“That might also mean plan members will be treated at a later stage than if their regular checkups had been in place. . . . These diseases aren’t always symptomatic and are often detected during annual checkups.”
This phenomenon may also partly explain the increase in claims for attention-deficit hyperactivity disorder medications, she adds, noting the majority of new claims came from millennials and generation X, as well as female plan members. “That’s a trend that started to appear in 2021 and we’re continuing to see it. . . . When everyone was stuck at home looking at their phones, there may have been some people who didn’t previously recognize they had this condition.”
According to Telus Health’s 2021 drug trends report, the stimulant ADHD drug class saw the highest year-over-year growth within a category at 19 per cent, equivalent to $241 million of total eligible costs in 2021. While the exact reason for the increase is difficult to pin-point, these claims could continue to rise in the coming years, says Jason Kennedy, general manager for the organization’s virtual pharmacy.
“It’s difficult to make an assessment. Reduced use of antibiotics and increased use of mental-health drugs made sense, but [with ADHD drugs], I think you could posit that, in the years to come, we’re going to see impacts with respect to developmental and behavioural issues arising from kids having to be taught from home and away from socialized environments during key years. But that’s more of a hypothesis as opposed to a founded statement.”
Redefining lifestyle drugs
While the discussion around lifestyle drugs has been ongoing for several years, the pandemic highlighted the importance of vaccines, leading to an increasingly intensified conversation, says Tim Clarke, president and founder of TC Health Consulting.
“This has been a category that’s grown fairly organically from the Viagra days. It’s been a catch-all for a lot of years and plan sponsors are starting to look at it and say, ‘I’m not sure this categorization works,’ either in general or the way they built it. Whether you’re talking about things like vaccines or anti-obesity medication, it’s due for a fresh look. The time has passed for lumping it together and dealing with it as a catch-all.”
Sandra Ventin, an associate vice-president at Arthur J. Gallagher & Co., says she’s seeing an increased discussion among her plan sponsors clients about the lifestyle drug class, particularly the handling of obesity drugs. “[Obesity] is one of those conditions that, until now, the insurers have categorized under lifestyle drugs — they’re either covered under the plan design or not. For drugs like Ozempic and Wegovy, the spend is around $8,000 to $10,000 per person per year. The insurers are starting to get rid of the lifestyle category and they see the value in covering obesity drugs in their design going forward.”
Plan sponsors that cover obesity drugs in their benefits plans are putting into place measures such as prior authorization, step therapy and exception processes, she adds. “Most insurers will cover these drugs if a plan member qualifies as type 2 diabetic, but we’re starting to see it’s a challenge when someone suffering from type 2 diabetes is not considered obese. Sometimes obesity is measured with a body mass index of 30 per cent and what we’re finding is most people qualify for both disease states and therefore they’re getting that drug approved.”
Linking drugs and DEI
The redefining of lifestyle drugs may also help benefits plan sponsors tackle issues related to workplace discrimination and support diversity, equity and inclusion efforts.
According to the 2022 Benefits Canada Healthcare Survey, chronic diseases that are apparent or may result in a physical disability appeared to be a factor in workplace discrimination. Indeed, 42 per cent of plan members with asthma/lung disease, 41 per cent with obesity and 38 per cent with chronic pain said they’ve experienced discrimination in the workplace.
Scotiabank is incorporating DEI into its drug plan with changes such as the addition of a fertility, surrogacy and adoption benefit, which includes additional drug coverage for fertility treatments. “We’ve received feedback from employees on this specific benefit and fertility drug [claims] have steadily picked up since we made the announcement [in 2022]. It supports our DEI initiatives, since there’s many ways employees are building families.”
The 2022 Benefits Canada Healthcare Survey also found 78 per cent of plan sponsors said they’re concerned about the pandemic’s long-term impact on the cost of health benefits plans, up from 71 per cent in 2021.
Similarly, 81 per cent of plan sponsors agreed the pandemic will impact the costs of benefits over the next five years, up from 77 per cent in 2021. Within this group, 46 per cent said they believe the biggest cost impact will come from employees’ claims for mental-health issues, excluding claims from those who were sick with coronavirus. Two-fifths (39 per cent) cited physical and mental-health claims from plan members who contracted the virus, while 36 per cent pointed to claims for serious diseases or chronic conditions that may have worsened due to delayed diagnoses and/or treatments.
Amid rising inflation, Clarke says the bigger pressure comes from a plan sponsor’s willingness to absorb the increasing cost, rather than the inflation rate itself. “A lot of businesses are looking to reassess how they’re spending money. However, coming out of a pandemic, health care will likely remain a high priority.”
Similarly, cost is a factor as plan sponsors look to enhance their drug plan offerings, says Joanne Jung, director of health and group benefits and pharmacy practice leader for Canada at WTW. “Sometimes, in order to fund those enhancements, plan sponsors are looking at their drug plan and moving to managed formularies, which drive utilization to more cost-effective drugs.”
Scotiabank factors inflation into its benefits costs, including its drug plan, particularly when assessing its benefits plan design each year. “We make sure we do it in a way that’s manageable for employees so they don’t see big hikes [and] we try and inform our employees of programs that may exist to reduce their [drug] costs,” says Alvi.
The impact of high-cost drugs
While the Telus Health report found 56 per cent of plan members made a claim in 2021, down from 62 per cent in 2019, the average eligible amount per claim jumped by nine per cent, from $77 in 2020 to $83 in 2021.
The report attributed these cost increases to specialty drugs, noting two per cent of all claimants submitted eligible amounts totalling more than $10,000, accounting for 40 per cent of the total eligible amount for all claimants.
“Employers need to ensure their formulary is well managed, they have the proper drug review in place and they’re coordinating with the government to ensure their portion of the claims are controlled,” says Dugal.
In addition, amendments to the Patented Medicines Prices Review Board regulations came into effect last July, but the guidelines that give effect to the regulations are yet to be implemented. As a result, the impact of the amendments on drug prices is unclear. “There’s a big question mark because there are opposing viewpoints [on the PMPRB amendments],” says Dugal. “Some think it’s a good thing to maintain affordable drug prices in Canada, while some have argued it will delay or prevent some drugs from being launched in Canada.”
Similarly, the impact of a national pharmacare program on drug plans is also yet to be seen. Last March, the federal Liberals and New Democrats reached an agreement to prioritize work on a national pharmacare program. Both parties agreed to work on passing a Canada Pharmacare Act by the end of 2023, followed by tasking the National Drug Agency to develop a national formulary of essential medicines and bulk purchasing plan by 2025.
And in its 2021 budget, the federal government said it will proceed with a previously announced $500-million funding program for high-cost drugs used in treating rare diseases. However, details on a national strategy for drugs for rare diseases — which was to launch in 2022 — are yet to be revealed.
This strategy would give employers time to plan how these new treatments can be part of their coverage, says Clarke. “A lot of the drug pipeline has emphasis on finding treatments for rare diseases that didn’t exist before. From an innovation perspective, this is a great thing. Whether you’re talking about biologics, traditional molecules or gene therapy, you’re going to see a growth in the number of conditions that can be treated for the first time. This is a positive from a plan member perspective, but will also provide some financial challenges [for plan sponsors].”
Blake Wolfe is the managing editor of Benefits Canada.