Specialty medications and high-cost drugs for common conditions are driving up private plan drug spending, according to Express Scripts Canada’s annual drug trends report.
The report found the rapid increases in drug spending for private plans over the last 20 years have started to slow. The average annual drug spending per plan member was up just 0.9 per cent in 2018, down from 2.5 per cent in 2017 and 2.9 per cent in 2016.
However, those numbers mask growing specialty drugs usage rates. Last year’s modest overall increase was made up of a 1.8 per cent decrease in spending on traditional medications and a whopping 6.9 per cent increase in spending on specialty medications.
“We saw that growth trend temporarily slowed in 2018,” said John Herbert, the director of clinical, research and new solutions at Express Scripts Canada, in a webinar. “However, managing costs remains critical moving forward due to challenges in the pharmacy landscape.”
Specialty drugs made up only two per cent of drug claims in 2018, but 33 per cent of drug spending, the report found. In comparison, traditional drugs accounted for 98 per cent of claims, but just 67 per cent of spending. Express Scripts Canada expects specialty drugs to grow to represent 45 per cent of total drug spending in the next few years, said Herbert.
A large reason for the increase in specialty drug spending was the use of more expensive medications for conditions previously treated with traditional medications, such as asthma and diabetes, as well as the advent of specialty oral cancer-treatment drugs that patients can take outside of a hospital setting, noted the report.
However, the report highlighted the pan-Canadian Pharmaceutical Alliance’s price reductions for nearly 70 of the most commonly prescribed drugs by 25 to 40 per cent in April 2018, noting it has contributed to the slowed increase in private plans’ drug spending. It also said the implementation of OHIP+ in Ontario played a positive role by significantly reducing claims for people under the age of 25 in the province. Its recent rollback by the new Progressive Conservative government will likely drive an increase in drug spending in 2019, the report noted.
Other contributors to the growth in specialty drug spending include the introduction of high-cost medication to fill treatment gaps and new indication approvals for existing drugs.
“The expansion of indications can also have a profound effect on drug plans,” said Aaron Aoki, a clinical pharmacist at Express Scripts Canada, during the webinar. “As new indications get approved, utilization will increase and so will costs [for private plans].”
The current drug development pipeline is focused on medications that could be life-changing for patients, such as emerging gene therapies. But these drugs come with million-dollar-per-treatment price tags, which could create additional cost pressures for plan sponsors in the future, noted the report.
“Pharmaceutical companies have been focused on innovation and therapies that introduce genetic material into people’s DNA,” said Aoki. “They’re administered once, but can come at extremely high costs.”
He cited the example of Kymriah, a recently approved gene therapy for cancer that modifies a patient’s cells to attack and kill their cancer cells, which is a one-time treatment with a cost of around US$400,000. Kymriah is currently in hospitals, he said, but “as more gene therapies come to market . . . we will see a push outside of hospitals and into private infusion clinics.”
He also noted Aimovig, a specialty medication for managing chronic migraines that would be administered through self-injections, was approved for use in Canada in 2018. It comes with an annual cost of between $6,000 and $12,000. “Given the amount of adults that suffer from migraines on a regular, chronic basis, this could drive [drug] spending,” said Aoki.
However, patent expirations are expected to drive future savings for plan sponsors as generic versions are developed, he added, noting the increasing use of biosimilars as biologic patents expire will also help to drive savings.
Express Scripts Canada saw that start to play out in 2018, with several biosimilars starting to grow in use. Grastofil, the biosimilar of Neupogen, grew to represent 43.6 per cent of claims in the blood disorder therapy class, up from 15.8 per cent in 2017. Inflectra and Renflexis, the biosimilars of Remicade, grew to represent 4.6 per cent of those claims, up from two per cent in 2017.
Another growing issue is plan members not taking their medications as prescribed, according to the report. Seventy per cent of plan members with asthma, 47 per cent of those with cancer and 45 per cent of members with diabetes didn’t adhere to their prescription specifications.
“Non-adherence is another major concern facing plan sponsors,” said Aoki, noting it can result in wasted spending when plan members purchase medications they don’t use.
Plan members taking medications for more than one condition were particularly likely to be non-adherent: 77 per cent of plan members who took four or more medications were more likely to be non-adherent to at least one of their treatments, compared to 58 per cent of plan members who took two or three medications and 44 per cent of plan members who took only one.