The growing use of specialty medications among plan members continued to drive the increase in plan sponsors’ drug plan costs last year, well eclipsing the increase in traditional drug spending, according to Telus Health.
Canadian plan sponsors’ drug spending on insured plan members between the ages of 25 and 64 increased 3.6 per cent in 2020 — down from a 5.1 per cent jump in 2019, said Shawn O’Brien, director of data enablement and drug, health, dental product roadmap at Telus Health, during a session at Benefits Canada’s 2021 Benefits and Pension Summit last week.
That overall increase was made up of a 2.1 per cent bump in drug usage and a 1.5 per cent increase to the average cost per claim.
Broken down by drug type, traditional drug spending increased 1.3 per cent — driven by a 2.1 per cent increase in utilization that was mitigated by a 0.8 per cent decrease in average cost per claim. Meanwhile, specialty drug spending increased by a significant 8.7 per cent, driven by a 6.1 per cent increase in usage and a 2.5 per cent jump in cost per claim.
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“If you look at specialty drug utilization, it’s increased far greater than traditional drugs,” said O’Brien. “There’s newer, more novel therapies on the market that now treat previously untreated or under-treated diseases. We will continue to see increased utilization of these breakthrough products.”
Overall, the eligible monthly cost per insured rose slightly across Canada, to $55.95, he noted. The western provinces had the lowest eligible monthly cost per insured, at $41.96, due to provincial pharmacare plans, while Quebec had the highest, at $74.25, as provincial pharmacies tend to dispense 30-day supplies only.
Meanwhile, Atlantic Canada led the average eligible cost per claims, at $87.72, in comparison to the Canada-wide average of $76.11. O’Brien pointed out the region also has the highest percentage of specialty drug consumption across the country, at 40 per cent, due to its unusually high prevalence of certain rare diseases.
Across Canada, specialty drug costs reached about a third (32 per cent) of total drug costs in 2020 and the year saw a larger-than-average increase in the number of claimants for specialty medications — 1.3 per cent, up from 1.1 per cent last year. “A disproportionate[ly small] number of claimant are driving high costs and the percentage of specialty drug spending has increased significantly over the last decade,” he said. “Based on the current pipeline, this percentage will persist.”
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Telus Health was starting to see the “first signs of a broadening utilization of specialty drugs” as novel and more expensive treatments for common illnesses have come to market, said O’Brien. He used the organization’s top six illnesses by eligible expense across its book of business to indicate the trend.
The most expensive conditions by eligible expense are rheumatoid arthritis (12.5 per cent of eligible claims), diabetes (11.4 per cent), skin disorders (7.6 per cent), asthma (5.6 per cent), depression (5.2 per cent) and cancer (4.3 per cent). While depression expenses were exclusively traditional drugs, specialty medications made up almost the entirety (12.4 per cent) of rheumatoid arthritis claims. Skin disorder treatments also skewed heavily to specialty (4.7 per cent, in comparison to 2.9 per cent traditional), as did cancer (3.4 per cent specialty, to 0.9 per cent traditional), with more oncology specialty drugs coming down the pike in the coming years. Asthma medications were mostly traditional (4.4 per cent to 1.2 per cent specialty).
While diabetes expenses are still entirely traditional medications, noted O’Brien, the illness is increasingly being treated by more expensive and effective treatments that are driving costs higher in the category. “We’re seeing about two-thirds of total diabetes drug costs coming from newer classes of drugs and this [is] combined with more widespread utilization as more and more people are diagnosed with Type 2 diabetes.”
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Telus’s data also demonstrated the results of British Columbia’s 2019 biosimilar policy. While biosimilars make up just 13 per cent of eligible costs across Canada, in comparison to biologics, B.C. saw a rapid uptake in biosimilars since January 2019. As of December 2020, biosimilars make up 69 per cent of eligible costs in the province.
Canada and B.C. also took diverging paths when it came to biosimilar new starts, noted O’Brien. Looking specifically at Remicade and its biosimilar alternatives, 78 per cent of B.C. patients started on a biosimilar in the first quarter of 2020, which ramped up to 98 per cent by the fourth quarter. Meanwhile, 87 per cent of new start patients in the rest of Canada were given the originator biologic, decreasing marginally to 81 per cent in the fourth quarter.