Though many plan sponsors are still using step therapy to manage drug plan costs, pharmacogenetic testing is receiving attention as more providers enter the market, lower the cost and familiarize employers and insurers with the technology.
As it becomes more sophisticated, there’s more information about how pharmacogentic testing works, says Sandra Ventin, associate vice-president at Accompass Inc. “I think the insurer community is now embracing that this technology is useful in making sure people are medically stabilized faster and that their adherence to medication could improve.”
In the last two years, major insurers have partnered with pharmacogenetics companies and launched pilot projects to test out the technology. “As an insurance company, we’re exploring how we can use pharmacogenetics in terms of managing drug plans,” says Barbara Martinez, practice leader of drug solutions at GreatWest Life Assurance Co. The technology is appealing, she notes, because it could reduce the financial waste caused by patients trying drugs that don’t work.
Despite the interest in pharmacogenetics, many employers still know little about the technology and are uncertain about how it can fit into their benefits plans. But Arthur Chung, chief executive officer at the B.C. Construction Association Employee Benefit Trust, believes awareness will grow as data surfaces.
Pharmacogenetic testing has the potential to increase drug adherence, he says, but it will be an additional cost for those already struggling with drug expenses. Pharmacogenetics can make drug plans more effective by providing patients with the proper treatment sooner, says Mark Faiz, president and chief executive officer at Personalized Prescribing Inc. “We say to employers, ‘Instead of allowing employees to bob up and down and have problems and eventually go on disability, make pharmacogenetics available to them right away.’”
While Faiz says disability case managers are relying on pharmacogenetics to help people return to work sooner, he acknowledges that some employers are still hesitant about adding the option to their plan. Indeed, it’s unclear how employers can use the technology as a preventative measure because Canada’s Genetic Non-Discrimination Act prohibits insurers from mandating that plan members undergo genetic testing except in certain circumstances.
But employers can certainly offer genetic testing as a voluntary benefit, says Ventin. “Some examples may be insurers offering this opportunity either on an employer- or employee-paid basis.”
Plan sponsors can also offer the testing through an employee assistance program, in the same way they offer counselling and support services, says Faiz. In this case, employees interested in genetic testing can approach a pharmacogenetics provider and maintain confidentiality, and their employer wouldn’t be privy to who used the service or the reasons for doing so, he says.
But despite continued interest in pharmacogenetics, its achievements are still limited, says Ventin, noting there’s misinformation within the industry. “It’s not going to say, ‘You should try a traditional prescription drug as opposed to a biologic.’ That’s not the premise of pharmacogenetic testing.”
Biosimilar uptake low among plans
Biosimilars is another area that’s expected to affect drug plans in the coming years, says Christine Than, senior drug solutions consultant at Aon Canada, noting this will depend on the extent to which public and private payers adopt them into their programs.
Currently, biosimilars make up less than five per cent of global prescription drug sales, she says. “Specialty drugs, biologic drugs are a large part of our drug costs, and unfortunately patients and prescribers have not switched over to biosimilars as much as we had wanted to see.”
The process for patients obtaining biosimilars is a bit more complex than with generics, says Than. “If it’s a generic, the patient goes to the pharmacy and the pharmacist asks, ‘Do you want to switch to a generic or do you want to stay with brand?’ The decision gets made there as a point of sale. There’s no intervention from a doctor. When it’s a biologic and you need to change the reference drug to the biosimilar, the doctor has to sign off on it. So they have to prescribe it and they have to follow the patient through the transition.”
But many doctors hesitate at switching their patient from one medication to another, says Than. As well, some choose to replace one biologic with another one that treats the same condition instead of opting for a biosimilar, which is exacerbating their lacklustre adoption, she adds.
Great-West Life reviews the biosimilars entering the market and determines whether to enter a product listing agreement, limit the reimbursement level of the biologic to match the cost of the biosimilar, consider preferential listing of the biosimilar or apply a combination of these approaches, says Martinez. “We don’t think a one-size-fits-all [policy] is appropriate given that biosimilars are vastly different from each other.”
Taking a similar approach, Manulife evaluates each medication on its own merit, says Donna Carbell, the insurer’s head of group benefits. “I think each [drug] is just so unique to the population, to the disease it’s addressing, to the pricing. Each has its own unique components and we want to make sure we focus on each one individually.”
While generic drugs are equivalent to their brand-name counterparts, biosimilars aren’t as clear cut. The drugs contain similar, but not identical, ingredients to their reference biologic drug counterparts. As well, biologics are made of living cells rather than chemicals and are more complex in composition than small molecule drugs.
But Jim Keon, president of the Canadian Generic Pharmaceutical Association and Biosimilars Canada, says there isn’t a meaningful difference between biologics and biosimilars in terms of efficacy and safety. He expects more public and private payers to adopt biosimilars in the future but admits it will be a slow process. “I think many of the private payers seem to be sitting back waiting to see what the government plans do, and then they’ll move forward. But we’ve been really encouraging the insurance companies to look at their costs, to look at the evidence out there on the safety and efficacy of biosimilars.”
Indeed, public payers have a lot of influence on prescribing habits, says Than. If certain provinces decide to favour biosimilars, prescribers may be more likely to offer them to patients who are covered under the public plan, she adds. “And once they feel more comfortable with that, they will be more comfortable doing it for all their patients, including their patients who are covered with private plans.”
However, the challenge for public payers is they still lack a clear pricing model for biosimilars, says Keon. “Because they’re new, there’s no model for pricing, so each product is treated separately and there’s a separate negotiation that happens with the supplier of the product and the [pan-Canadian Pharmaceutical Alliance]. Those can be lengthy and labourious, and again, slows the entry [of biosimilars] into the market.”
The pCPA issued a statement in 2018 expressing its interest in creating a clear framework for negotiating biologics and biosimilars in Canada, says Keon. As well, Health Canada and the Canadian Agency for Drugs and Technologies in Health are working together to have the latter review biosimilars before they’re approved by Health Canada.
Getting member buy-in
Most plan sponsors aren’t focused on whether their members are consuming biologic or biosimilar drugs, says Ventin, but on whether their drug plans are helping them stay healthy at the best price. “As an employer, it comes down to, ‘Is this really the lowest cost for the medication that’s required?’ I think that’s a bigger issue than figuring out the insurance policy [on biosimilars] and what they support.”
For its part, the B.C. Construction Association Employee Benefit Trust is primarily concerned with drug plan costs and efficacy, says Chung. “We want to make sure the therapy that our employees are getting is a good outcome for their condition, so they can go back to work and be productive.”
At the same time, many plan sponsors are including their plan members in helping reduce drug costs. The trust, according to Chung, educates plan members about how they can lower costs, such as going to pharmacies with the lowest dispensing fee or markup.
However, he admits it’s a challenge to engage members in their drug plan, noting many of the trust’s employers ask for help with communications. “The only way is education through communications and periodic reminders,” says Chung. “Otherwise, there’s not really much more we can do aside from perhaps changing the plan to add options for step therapy, generic substitutions, reference drug programs, things like that.”
Meanwhile, insurers are using technology to make employees smarter consumers of their drug plans, says Carbell. Manulife has introduced mobile apps that allow patients to look up their specific prescriptions in a drug database or find their closest pharmacies. “Most of our investment in technology has been to create a personalized experience because then you’re able to give real-time information,” she says.
While specialty drugs often receive the most focus because of the speed of advancement in that area, it’s important to also focus on traditional drugs, which make up 70 per cent of costs, says Carbell. “I think specialty came out like a lion in the industry . . . but don’t forget [traditional drugs], because not only are they high volume, the overall cost is also high and it’s for a high proportion of the employee population. It does hit a number of those chronic disease states . . . .”
A leading driver among chronic disease states is diabetes, which affects many people, says Carbell. And due to the comorbidity of diabetes with other health conditions, it’s an important condition to address, she adds.
Indeed, members with high-cost chronic conditions are key to changing the curve on spending, according to Express Scripts Canada’s 2017 drug trends report. These members, which make up about 20 per cent of claimants, drive almost 80 per cent of plan costs with an average annual drug spend 15 times that of other claimants. These members have an average of 7.8 chronic conditions, 3.3 physicians and 8.9 medications, and they struggle with managing their treatment plans, noted the report. As well, an average of 49.5 per cent of these members were non-adherent to one or more of their medications.
If plan sponsors and providers don’t address drug adherence, members are more likely to go on disability or need additional therapies, according to the report.
In the past three years, B.C.’s construction industry has seen a slight increase in total spend for mental health and nervous system drugs, says Chung. He attributes this trend to more employees being open and accepting about their mental-health conditions. “In the construction industry, only four per cent is women,” he says. “It’s mostly men where there’s machismo that if something’s wrong, they don’t really want to talk about it. But because of education and awareness, more men are coming out and looking for help.”
The biggest challenge around prescription drugs, says Chung, is that they’re highly influenced by government and market policy and regulations. And the costs will inevitably affect whether an employer decides to change their benefits plan. “It has a direct impact on us. We know that, as part of remuneration packages, salary is a top priority. But benefits programs can be at risk if costs get too high, and the employer needs to really make decisions on whether they need to keep the workforce by cutting costs. They need to look at where they can cut those costs, and it will probably be the benefits program.”
What’s coming next?
Another trend coming to drug plans is advancements in gene-based therapies for cancer. Recently, Health Canada approved Kymriah, a one-time treatment that uses a patient’s own T cells to fight and kill cancer cells. It’s the first chimeric antigen receptor T cell therapy to receive regulatory approval in Canada.
With other similar therapies in the pipeline, the whole realm of cancer therapy is a rapidly changing area, says Aaron Aoki, clinical pharmacist at Express Scripts Canada. And while these therapies will fill gaps in the health-care system and sometimes save lives, they’re also very expensive so payers will have to consider whether covering them is sustainable, he adds.
But oncology, in general, won’t have a major effect on private payers, since public plans typically cover these therapies, says Joe Farago, executive director of private payers and investment at Innovative Medicines Canada. “There are new oncology products coming out down the road, but not in the next year or two, that are going to have a significant impact, and those are on the public plans.”
Jann Lee is a former associate editor at Benefits Canada.