|Vishal Ravikanti, TELUS Health|
|Nida Mian, Sun Life Financial|
JANUARY 2020 - Just one percent of patients use high-cost specialty drugs, yet the impact of these drugs on private and public drug plans has been profound—and will intensify in the coming years, noted speakers at the
For private drug plans, high-cost specialty drugs (defined by adjudicator TELUS Health as drugs with a potential annual cost of $10,000 per patient) accounted for 29% of claims’ total eligible costs in 2018 and 1.1% of claimants. That compares to 12% and 0.6% in 2009. “We expect the percentage of costs will be at least a third in the next few years, and will eventually account for half,” said Vishal Ravikanti, Manager, Pharmacy Consulting, at TELUS Health.
The spectrum for these drugs is also broadening. On the one hand we will see more drugs that are relatively lower cost, to treat relatively common chronic conditions such as diabetes, high cholesterol and migraine. For example, the new CGRP inhibitors for migraine fall under the TELUS threshold of $10,000, “but annual costs of up to $7,000 per patient is quite a large increase versus other treatments,” observed Ravikanti.
On the other hand, the upper limit for costs keeps going up. In 2018, Canadian private drug plans saw their first $1.3-million claim, for Strensiq, an enzyme replacement therapy for a rare metabolic bone disease. Overall, the average cost of a specialty drug has increased by 10.8% annually over the past 10 years, versus an average annual decline of -2.1% for non-specialty drugs. And the next 10 years will see a steady rate of launches, particularly in oncology, “where we can expect costs of $20,000 to $25,000 per month,” said Ravikanti.
He added that more specialty drugs will be available in oral or self-injectable dosage formats.
Private payers have implemented prior authorization to ensure patient eligibility and appropriate utilization. Once patients have the medication, adherence is essential—and more can be done in this area, beyond tracking fill rates, particularly as more self-administered drugs become available.
“Adherence is a key tenet for the future, especially around building partnerships with pharmacy. We need to work together to make sure that both pharmacy and the private market can remain sustainable,” said Ravikanti.
Prior to specialty drugs, private drug plans generally automatically covered new drugs as soon as they received Health Canada approval. Today, most insurers have implemented a drug review process. Like the review process on the public side, private insurers’ reviews decide whether a new drug (or indication) is covered, is covered with conditions (i.e., a prior authorization), or not covered at all.
“Our review is very much a dynamic process, as listing decisions can change if there is new medical evidence or a pricing change,” said Nida Mian, Senior Pharmacy Benefits Strategist for Sun Life Financial.
The drug review also sets the stage to implement cost-containment strategies, such as preferred provider networks (PPNs) for specialty drugs. Sun Life’s PPN, comprised of about 2,700 pharmacies through McKesson Canada, is an open network, which means that patients can go to other pharmacies if they prefer.
For more complex, high-cost specialty drugs, Sun Life is piloting a Health Coach program. “The service is focused on improving health outcomes. The PPN advisor calls patients and lets them know they have access to a dedicated nurse, who would call about eight times over six months,” explained Mian. Preliminary results for health outcomes are “very positive,” with final results expected in September 2020.
For more on specialty drugs, see "High-cost drugs amplify need for new reimbursement model."