While high-cost specialty medications represent about 30 per cent of drug costs, the total budget impact of rare disease drugs is less than two per cent, said Brad McCaw, associate director of market access at Alexion Pharmaceuticals Canada.
Within the high-cost specialty market’s top 20 drugs, only one is designated for rare disease, he said during a panel discussion at Benefits Canada’s 2019 Face to Face Drug Plan Management Forum on Dec. 3 in Toronto.
In 2018, the amount paid for rare disease medications in Canada was around $280 million, added McCaw. “The amount of money paid for — and by your plans — for drugs related to smoking-related illness was four times that.”
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So why do rare disease drugs cost so much? The answer, according to McCaw, is simple economics. The high costs to plan sponsors are sustainable because there are few patients. Clinical trials for rare disease drugs are a fraction of the size of those for typical drugs, he added, and sourcing patients requires global reach. “Looking at these drugs through the filter of small patient populations drives costs over the years.”
Between 2002 and 2016, 84 per cent of submissions to Health Canada for rare disease drugs were filed after the Food and Drug Administration and the European Medicines Agency, with a median delay of 253 days, said Jane Farnham, co-chair of the Canadian Organization for Rare Disorders’ board of directors, also speaking on the panel. And some drugs don’t make it to Canada at all. “Twenty-three rare disease drugs approved by the FDA and EMA hadn’t been approved in Canada at the end of 2016.”
This can be attributed to Canada’s regulatory system, noted another panelist, the Canadian Drug Insurance Pooling Corp.’s executive director Dan Berty. When Health Canada receives registration for rare disease drugs, they’re fast-tracked because there’s an unmet clinical need. It’s then forced to look at these medications through common drug reviews, he added.
But the impact of rare disease drugs on overall plan experience is substantial, said Berty. Data collected by the CDIPC in 2018 found the total cost package for a plan member as it pertains to new rare disease drugs coming to market was around $60,000. “We encourage small- to mid-sized employee groups to have a pooling mechanism in place to help share the cost among sponsors and insurers.”
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Due to successful advancements in medicine, 125,000 to 150,000 people have received treatment for rare diseases, said Berty, and these numbers are increasing each year. “It’s not a ‘when’ but an ‘if’ type of issue. You’re going to see this somewhere on your plan — whether it’ll be big or really big is part of the problem.”
Sixty to 75 per cent of Canadians are covered by small- to mid-sized plans, where decisions are made at the insurer level, noted Farnham. Indeed, when it comes to providing access, plan sponsors don’t choose between drugs for rare or non-rare diseases because they rely on the controls implemented by insurers for cost-effectiveness, added Kevin Wong, pharmacist consultant for health and benefits at Willis Towers Watson, also speaking on the panel.
Plan sponsors are receptive to some of the drug plan management features recommended by advisers in order to deal with some of the controllable costs, he said. For rare disease drugs, plan sponsors would like more accountability from insurers to provide renewal criteria, or an evaluation of these drugs on a continual basis, to understand how well they’re working. “At the end of the day, [plan sponsors are] a business and believe in value for money as long as that value is clearly demonstrated.”
Traditional drug plan management features, such as generic substitution and managed formularies, are providing plan sponsors with tangible savings, added Wong, highlighting between one and five per cent of employers’ overall drug spend can be better managed with these types of programs.
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Sometimes, small- and mid-sized employers react to large claims by capping coverage, which removes risk. “As an advisory community, we don’t want to cap the cost and move on,” said Wong. “We want to make sure there’s access because that’s the purpose of insurance. However, sometimes it’s the stark reality of the costs involved.”
By putting caps in place that don’t cover people with rare diseases on account of cost, advisers and employers are faced with an ethical dilemma, noted McCaw. The real challenge, he added, is finding a way to provide insurers with the certainty they require to cover these costs. “Pharmacare has been called out in terms of [rare disease] coverage, but that’s not going to cover everything.”
What’s missing in this discussion is the implication for patients, said McCaw, adding that the treatment a patient receives either saves their life or keeps them at work. “Manufacturers need to work with insurance carriers to ensure cost certainty so that it’s predictable.”
Read more stories from the 2019 Face to Face Drug Plan Management Forum.