Benefits Canada’s big reveal: Experts weigh in on new drug trend data

Are plan sponsors aware of the benefits plan challenges they face? Yes and no, according to Benefits Canada’s 2015 online survey of 204 senior benefit decision-makers. The survey revealed that an alarming number of sponsors are unaware of the state of their plans.

Sixty-six per cent of those surveyed didn’t know what underwriting arrangement they had in place, 77% did not know what their pooling stop loss threshold was, and 30% were unaware if someone in their benefits plan was taking specialty drugs. Even so, the majority (53%) of those surveyed reported that they don’t intend to make changes to their plans any time within the next two to three years.

Those decision-makers are still worried about the rising cost of drugs, however, and attribute those costs to drug plan cost increases, followed by utilization and claims. Biologic and specialty drugs were cited as the third-greatest cost driver.

Sixty-four per cent said they were concerned about how prices could rise over the next few years, and with reason: they’ve already seen their drug costs go up steadily as health benefit premiums have risen by 13.6%, drug plan costs by 11.3% and drug pooling costs by 14.3%. Panellists responding to the survey during Benefits Canada’s Face-to-Face Drug Plan Management Conference in Toronto on Dec. 2 certainly felt that utilization and high-costs drugs should be top of mind for employers. “When I think of the 64% that are that concerned, I switch gears and think of the 36% that are somewhat concerned or not concerned at all,” said John Herbert, director of strategy, product development and clinical services at Express Scripts Canada. “And I think they may not appreciate what lies ahead.”

Herbert said that Express Scripts’ analysis shows that 54% of “items in the pipeline” are high-cost specialty drugs used to treat long-term conditions like rheumatoid arthritis. Other high-cost drugs cited by panellists included new cholesterol drugs and hepatitis C medications.

“In 2015, we have seen a tenfold increase in hep-C spending with new high-cost treatments coming to market that are very effective but are very costly. And it is a cause of concern,” said Herbert.

Anson Tang, a drug product manager at Desjardins Insurance, added: “Also concerning is the trend for orphan-like pricing being applied to new medications for non-orphan diseases: for example, expensive new medications for diabetes or high cholesterol.”

So what did panellists feel were the best approaches to managing these costs?

Barbara Martinez, practice leader, drug benefits solutions at Great West Life, felt that ensuring the right people get the right drugs is imperative in ensuring plan viability. “The key is to continue to have access. We want to make sure those people who need access have that access and the people who don’t do not. And that’s the key to sustainability.”

She said it’s critical that sponsors have the right processes in place around prior authorization, step therapy and health case management so they can manage costs for people who are taking high-cost treatments and ensure those who need those treatments can access them.

Herbert, meanwhile, cautioned against plan maximums. “Some plans have opted to put in annual plan maximums. That can be really short-sighted” as they force patients to absorb the costs of medications.

Many panellists felt that programs such as mandatory generic substitution, which is used by 71% of the survey’s respondents, need to be ramped up instead. “These programs are largely underutilized, particularly if you’re talking about mandatory generics,” said William Chung, senior vice-president of payer partnerships and pricing at Shoppers Drug Mart.

Use of biosimilars was another area seen as an avenue for cost savings. “There’s an opportunity to save three to four billion dollars in the next five to six years,” said Bruno Mader, vice-president of the biologics and diversified products division for Merck Canada. “And I’m not seeing that on the radar of sponsors or providers. The biologics market is growing three times faster.”

Speaking about plan design, Herbert mentioned the value of managed formularies in driving “waste out of the system.” He also emphasized better utilization management and step therapy programs along with the improved clinical management of drug use. “Proper controls need to be in place to ensure the right drug for the right patient at the right time,” he said.

At the end of the session, plan sponsors were left with a whole host of options to consider for implementation. The question is: Will they take action?