Which health conditions are impacting benefits plans?

The Health Association of Nova Scotia, which has a number of different employers in its benefits plan, cites rheumatoid arthritis medications as its top drugs in terms of cost.

“Chronic disease, in terms of inflammatory disease — not just for rheumatoid, but for Crohn’s disease as well — those are what we’re seeing from a cost perspective,” says Susan Belmore-Vermes, the association’s director of group benefits solutions.

Diabetes is another top area of concern, she adds. And, since Nova Scotia has high rates of cancer, oncology drug use continues to climb in the province and is certainly impacting benefits plans.

Read: Data key in helping employees with chronic disease, survey finds

So with drug costs continuing to affect benefits plan sustainability, which health conditions — and their associated medications — should plan sponsors be looking out for?

Chronic diseases as growth drivers

The Health Association of Nova Scotia’s experience is on par with other Canadian plan sponsors, according to many in the industry.

John Herbert, director of business development and clinical services at Express Scripts Canada, points to the growth of speciality medications, which currently make up more than 30 per cent of drug spend. A big component of that spend is for inflammatory conditions, he notes, referring particularly to Remicade, which is used to treat certain types of arthritis and inflammatory bowel disease.

Chris Goguen, manager of pharmacy benefits strategy at Medavie Blue Cross, says diabetes is the No. 1 growth driver in terms of overall impact. “We’re seeing that it’s both a factor of increase and utilization, so growth and prevalence of those being treated for diabetes — largely type 2 — but also inflationary pressures, and more individuals being treated are being treated with more medicines and more expensive medicines.”

Read: A call for more solutions to address the growing diabetes burden

Drug trends at a glance

The average annual drug spend per plan member was up just 0.9% in 2018, down from 2.5% in 2017 and 2.9% in 2016.

Specialty drug spending surged, from 15% of total spend in 2008 to 33% in 2018.

Patients with chronic conditions had high levels of nonadherence, including 70% of plan members with asthma, 47% with cancer, 45% with diabetes and 45% with inflammatory conditions.

Source: Express Scripts Canada, 2019

In 2018, the insurer’s diabetes expenditure increased on a per capita basis by almost nine per cent, making it the leading growth driver as a percentage, according to Goguen.

Suzi Beckett, chief operating officer and health and benefits consultant at Northern Star Benefit Consultants Ltd. in Surrey, B.C., also says diabetes is leading the pack among group claims, followed by rheumatoid arthritis, in terms of drug use cost. “So it’s a significant price tag, but not high volume that leads to the cost.”

Specialty drugs used to treat severe and catastrophic conditions represented between 29 and 33 per cent of plan sponsors’ overall drug claim spend in 2018, she says. “Plan design and provincial coverage notwithstanding, demographics play a key role in health-care utilization. Many of our clients whose policy reflects an older demographic are experiencing sustained drug plan utilization ranging from 70 per cent to 85 per cent.”

Cancer, gene therapies on the rise

In cancer treatment, a combination of oncology drugs account for spending increases, rather than a single drug, says Ned Pojskic, leader of pharmacy and health provider relations at Green Shield Canada. “You’re trying different things and, as you cycle through your cancer progressively, you start the next one, the next one, the next one, and it will hopefully prolong life significantly.”

Read: New genetic therapies in cancer treatment could impact benefits plans

Early detection is further affecting the rise in cancer therapy costs, says Beckett, noting advances in technology mean treatments are being prescribed earlier. “For example, in the past, if you think about breast cancer detection, it was done at older ages. Now it’s prescribed at earlier ages or in earlier situations, and genetic testing might even open that up further down the road.”

And gene therapy, which isn’t affecting private plans yet, will eventually fall exclusively in the public payer space, says Pojskic. “There’s going to be more . . . and some will impact private plans.”

The others

When looking at benefits plans from a condition standpoint, depression and migraines are also very common, notes Beckett. “Migraines is another area that is currently under intensive development and that tend to be a little bit more common. And now they’re seeing high-cost drug development [there] as well.”

Another area of concern, because of the prevalence of the disorder, says Herbert, is a liver inflammatory disease called non-alcoholic steatohepatitis or NASH, a precursor to cirrhosis. “We’re concerned about this because the prevalence of NASH is upwards of three per cent of the population, which is way above rare disease classification, and we’re seeing potentially a repurposing of the first drug to come to market for this, one that’s already been approved for a rare liver disorder . . . .”

Attention deficit hyperactivity disorder is an interesting one that’s shown up this year, according to Goguen. “We don’t know all the reasoning behind it and we don’t want to make false assumptions, but in terms of expenditures per capita in 2018 on our group business side, ADHD drugs grew by just under nine per cent.”

Read: How employers can better address migraines

This was almost entirely driven by increased utilization, he adds. “And we’re seeing much of that utilization growth coming from adults.”

In 2018, the insurer also saw an increase of 20 per cent in claimants for ADHD alone, says Goguen, noting it could be an issue of comorbidity. “There [could be] a movement towards increased use of these types of medicines to deal with other mental-health disorders and stress or anxieties. We’re not in a position to speculate, but we’re starting to investigate as to what is driving this trend, because it is certainly a significant increase in use in adults in a category that was typically seen in use in adolescence.”

Biologics in the pipeline

In terms of drugs, another large growth category is biologics, with many treating some of the most common health conditions. The category continued to be No. 1 in overall contribution to drug spending in 2018 at 18 per cent of the total, says Goguen. In terms of expenditure, he notes, the growth rate was just under four per cent per capita in 2018. “At the same time, the per capita growth rate in biologic drug spending was 3.8 per cent, down from 9.9 per cent in 2017.”

Growth in other drug categories, including those for diabetes and cancer, significantly outpaced the growth in biologic spending in 2018, at 8.7 per cent and 13.7 per cent, respectively, he says. “So it’s cooling off in terms of its absolute dollar growth, and we’re seeing some shift to lower-cost biologics as individuals move away from Remicade, for example.”

Read: Is nudging biologic patients towards biosimilars a good choice?

But overall, given the sheer size of the category, it’s close to one dollar in five on the benefits plan, notes Goguen. “Even at a growth rate below five per cent in expenditure, it’s still very significant.”

The largest condition associated with biologics is Crohn’s. “Inflammatory bowel disease by far is now what’s driving the utilization and expenditure with biologic drugs,” says Goguen. “Of all our biologics claimants, 30 per cent are Crohn’s patients.”

A number of biologic drugs are in the pipeline that will affect benefits plans, says Beckett. “This has been a trend over the last few years, even though usage of drugs has decreased. In terms of the degree to which it’s rising, the degree to which they affect benefits plans, biologic drugs are increasing at a rapid rate — so cancer drugs, primarily rare disease drugs.”

The second largest category for biologics is rheumatoid arthritis at 19 per cent, she adds.

Alethea Spiridon is managing editor of Benefits Canada.