Addressing drug plan sustainability in the face of rising costs

The landscape in the pharmaceutical world is forever changing, as drug costs continue to rise and drug plan sustainability is at risk, said Alberta Blue Cross’ Krystal Wynnyk at the 2018 Calgary Drug Trends Summit on Oct. 25.

“We’re stuck trying to find a balance between plan sponsor costs and drug sustainability, and balancing that out with member impact and member health,” said Wynnyk, the insurer’s drug benefits manager, benefit and product development, at the event. High-cost specialty drugs, which have historically been used to manage complex chronic medical conditions, are the most pronounced cost driver overall, she added.

Today, “we’re seeing speciality drugs creep into high utilization categories,” said Wynnyk, noting that the number of high-cost drugs coming to market doubled between 2011-12 and 2015-16. “In the high-cost drug development world, there’s a lot in the pipeline and there are going to be more coming to market.”

Read: High-cost drugs account for 26% of private plan costs in 2017: PMPRB

At the same, time, life expectancy in Canada continues to rise, while an aging demographic is working longer than ever. More than 40 per cent of people employed in Canada are over age 45, said Wynnyk, noting that’s the magic number for the advent of chronic medical conditions. “We’re treating more people longer and paying for those drug costs.”

Earlier this year, the pan-Canadian Pharmaceutical Alliance and the Canadian Generic Pharmaceutical Association reached a five-year agreement on generic drug pricing reform to have nearly 70 high volume drugs priced at 10 per cent or 18 per cent of the brand name product. “We are expecting to see significant savings,” said Wynnyk. “This is what it brings to the generic side: stability, sustainability and predictability.”

Globally, 16 per cent of pharmaceutical expenditures are in the biosimilar space. In Canada, the promise of biosimilars translates into an estimated savings of anywhere from 15 to 45 per cent of the biologic reference product, said Wynnyk, referring to figures from the Patented Medicine Prices Review Board. However, “there has been quite limited uptake of biosimilars at about two per cent, for various reasons,” she added.

Read: Generic drug deal hailed for price cuts of up to 40% for public, private plans

As well, four out of five adults in Canada have at least one modifiable risk factor, according to the Public Health Agency of Canada, which can be improved through lifestyle intervention, according to Wynnyk. “As the demand for, and cost of, drugs increase, we need to broaden our outlook and think about how we manage costs for these medications,” she said, noting that for the most part, chronic disease is preventable.

A recent study by the Edmonton Oliver Primary Care Network of nearly 300 patients diagnosed with metabolic syndrome found a dramatic drop in the use of drugs and an average savings of $2,200 per patient per year after patients worked with a health-care team to change their lifestyle.

What can plan sponsors do? Wynnyk suggested they consult their benefits plan manager to discuss available options. “If you’re working on an open plan design, it’s probably a good time to transition into a managed plan with a formulary with some controls, so you can continue to offer your members the coverage they require for drugs, while balancing that out with drug cost savings,” she said.

“We want to make sure those drugs are being used at the right time, for the right person. It’s about finding a balance.”

Read more coverage from the 2018 Calgary Drug Trends Summit.