Looking ahead to 2020, the big story for health benefits is often avoided because it isn’t easy to address. It’s the elephant in the room.

Over the past year, there’s been no shortage of momentum in new and emerging product offerings in the health benefits space — everything from digital cognitive behavioural therapy to virtual health to the continued growth of health and wellness portals. But many plan sponsors still aren’t ready for what’s coming in the world of specialty and orphan drugs.

For a column on what’s ahead in the world of health benefits, there’s no question it’s far sexier to focus on digital CBT and virtual care than it is to beat the specialty drugs drum again and again. However, the difference here is the issue isn’t specialty drugs; it’s how they’re being managed or, more appropriately, not being managed.

Read: Rising cost of drugs, benefits plans top priorities for employers: survey

The passive tools used by many plan sponsors to manage high-cost claims aren’t working. Some believe prior authorization is the secret behind managing specialty drug claims. That isn’t enough. If plan sponsors continue to think passive, off-the-shelf solutions are going to manage the dynamic world of drug therapy, they won’t have to worry about digital health innovations because the drug plan budget will suck all the oxygen and funding out of those important conversations.

In 2019, specialty drugs drove 80 per cent or more of the annual increase in spending for most plans. In the year ahead, the drug plan management checklist should focus on the optimal way to manage these complex, high-cost claims. For example, with today’s basic plan design elements, there’s no need to worry about implementing a complex formulary when almost all growth (unrelated to diabetes) moving forward will centre on high-cost drugs.

That said, thanks to new diabetes clinical practice guidelines released in 2018, managed formularies no longer have any meaningful role containing diabetes costs. After Metformin, any of the following are now considered second-line therapies: DPP-4 inhibitors, GLP-1 agonists, SGLT2 inhibitors, etc.

Read: Growing use of specialty drugs putting pressure on plan sponsors: report

In an ideal world, responsible plan design and management around complex drug claims will be the gateway to ensuring the resources are in place to explore and fund some of the fascinating innovations in health benefits today. For most plans, responsible management in this area involves clinically managing fewer than 0.1 per cent of all drug claims in a given year. If this management is responsible, transparent and member-centric, it works in any environment: public or private sector, unionized or non-unionized.

Here’s a sample of what’s coming along for any known U.S. or published Canadian drug pricing:

Specialty drugs (non-oncology):

  • Brexanolone — For postpartum depression, FDA-approved, US$34,000/year
  • Estekamine — For treatment resistant depression, FDA-approved, under fast-track review by Health Canada, US$33,000-$49,000/year
  • Ibalizumab — For multi-drug resistant HIV, FDA-approved, US$118,000/year
  • Siponimod — For secondary progressive multiple sclerosis, under review by Health Canada, $35,000/year
  • Tafamidis — For cardiomyopathy, under review by Health Canada, €156,000/year
  • Tanzezumab — A non-opioid specialty drug for various forms of chronic pain, currently in phase three trials, price unknown
  • Tenapanor — For irritable bowel syndrome with constipation, under review by Health Canada, price unknown
  • Upadactinib — An oral therapy for rheumatoid arthritis, under review by Health Canada, US$71,000/year

Notable exclusions here are the more than two dozen medications under investigation for the treatment of non-alcoholic fatty liver disease/non-alcoholic steatohepatitis, where no therapies currently exist. With the growth of the obesity and type 2 diabetes rates in the Canadian population, the rise in non-Hepatitis C and non-alcohol driven liver fibrosis and cirrhosis is headed on an upwards trajectory.

Read: Register for the 2020 Employers Cancer Care Summit

To date, some provinces like Alberta and British Columbia are seeing very few cancer claims pushed to private plans. However, employers in regions like Ontario and Atlantic Canada can’t say the same. The most significant pipeline of medications exists within oncology.

Here’s a small sample of what’s on the way:

  • Acalabrutinib — For lymphoma, FDA-approved, US$170,000/year
  • Alpelisib — For breast cancer, under review by Health Canada, US$201,000/year
  • Entrectinib — For lung cancer, FDA-approved, $204,000/year
  • Erdafitinib — For carcinoma, under review by Health Canada, US$300,000/year
  • Gilteritinib fumarate — For acute myeloid leukemia, under review by Health Canada, US$270,000/year
  • Glasdegib — For leukemia, under review by Health Canada, US$244,000/year
  • Laroterctinib — For solid tumours with NTRK gene fusion, approved by Health Canada, US$393,000/year
  • Talazoparib — For breast cancer, approved by Health Canada, US$184,000/year

Drugs for rare diseases:

  • Amifampiridine — For L-E Myasthenic syndrome, FDA-approved, US$200,000/year
  • Ataluren — For nonsense mutation Duchenne muscular dystrophy, under review by Health Canada, $450,000/year
  • Burosumab — For hypophosphatemia, approved by Health Canada, $240,000-$300,000/year
  • Caplacizumab — For acquired thrombocytic thrombocytopenic purpura, under review by Health Canada, US$270,000/year
  • Cerliponase Alfa — For neuronal ceroid lipofuscinosis type 2, approved by Health Canada, $702,000/year
  • Eteplirsen — For Duchenne muscular dystrophy, FDA-approved, US$300,000/year (weight-based dosing)
  • Onasemnogene abeparvovec — For spinal muscular atrophy, FDA-approved, US$2,100,000
  • Pegvaliase — For phenylketonuria, FDA-approved, US$240,000/year
  • Ravulizumab — For paroxysmal nocturnal hemoglobinuria, approved by Health Canada, US$458,000/year
  • Voretigene — For retinal dystrophy, FDA-approved, US$425,000/year per eye

Read: Just a quarter of plan sponsors review claims data regularly: Sanofi

For many people, other innovations in health benefits are far more interesting than complex, specialty drugs. However, if 2020 isn’t the year plan sponsors focus on how to effectively and responsibly manage high-cost drug claims and emerging risks, the resources to pursue some of these intriguing health initiatives may soon disappear.

The issue is no longer specialty drugs. The issue is how these claims are being managed in a manner that’s transparent and consistent without adversely affecting plan member health.

Mike Sullivan Mike Sullivan is president of Cubic Health, an analytics and drug plan management company based in Toronto. These are the views of the author and not necessarily those of Benefits Canada.
Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required