Research indicates noticeable impact on prescription medications post-pandemic with clear link to declining mental health
The annual drug spend per plan member increased by 6.3 percent in 2022, driven primarily by a 5.4 percent increase in plan members who made a claim. At the same time, the spend per claimant grew by 0.8 percent, according to Express Scripts Canada’s 2023 Drug Trend Report. For the first time in more than 10 years, the growth rate for specialty drugs fell behind that of traditional drugs.
The spend per plan member for traditional drugs increased by 6.9 percent in 2022 and the spend per claim increased by three percent. A key driver was the 10 percent increase in the spend per claim for diabetes medications.
In 2022, specialty drugs represented 27 percent of overall spend and 0.7 percent of claims. Spend per plan member for specialty drugs increased by 4.8 percent. Utilization, the proportion of plan members making a specialty claim, increased by 5.4 percent. Telus Health’s 2023 Drug Data Trends and National Benchmarks Report agrees that diabetes has replaced inflammatory diseases, such as rheumatoid arthritis, as the top drug category for claims in Canada in 2022. The report says plan members already diagnosed with diabetes saw rising eligible amounts. This was in part due to increased utilization of higher-cost, second-, or third-line therapies. The positive impact these drugs have on weight loss also drove prescribing activity – including the potential for off-label use by people who do not have diabetes.
As well, a significant increase in the use of antidepressants by plan members below 19 years of age was noted, with a clear link between the impacts of the pandemic on declining mental health. Of all claims for antidepressants, the proportion of claimants from this age group climbed from 15.9 per cent in 2018 to 19.3 per cent in 2022.
The TELUS Health report also highlights the noticeable impact on the use of, and need for, prescription medications and insurance claims for children under nine years old in 2022, specifically for antibiotics usage to treat respiratory infections. Young children avoided
exposure to a number of infections like flu, Respiratory Syncytial Virus (RSV), and strep throat during the early years of COVID-19, and respiratory infections came back with a vengeance when public health measures were lifted.
Drug plan utilization has gradually rebounded since the start of the pandemic, and two of the top-10 categories – diabetes and attention deficit hyperactivity disorder (ADHD), are seeing very strong growth for drugs that are relatively high-cost compared to other traditional drugs.
Drugs to treat ADHD appear poised to overtake antidepressants, while their share of claims is one-third that of antidepressants. The category of drugs for ADHD in adults is the fastest growing in both eligible amount and claims, overtaking depression and asthma. In fact, there were more adult claimants for drugs to treat ADHD, as the number of adult claimants overtook pediatric claimants in 2022. Growth is highest in the 30- to 39-year-old age demographic.
Biosimilar switching policies also influenced cost trends in 2022, with their dampening effect expected to continue in 2023 and 2024 as additional provinces and territories roll out their biosimilar switching policies for public plans, prompting some private payors to adopt similar approaches. The Telus Health report says biosimilar switching policies were likely a driver behind three years of moderate spend by private drug plans. As well, provincial biosimilar-adoption policies have had a ripple effect on private drug plans, particularly in British Columbia and Quebec.
Nationally, biosimilars’ share of claims for biologics has grown from just 4.2 per cent in January 2019 to 32 per cent in December 2022. That will likely accelerate in 2024, as remaining provinces and territories complete their transition periods.
The report says increasing the utilization of generic drugs continues to be an important element of cost management in private drug plans, and mandatory generic policies are an essential vehicle to achieving those savings. As utilization rates rise, cost concentration appears to be intensifying, says the 2023 Greenshield Administration Drug Trends Report. The report shows more than 50 per cent of costs attributed to five per cent of claimants, and over 30 percent of costs attributed to one percent of claimants. This trend indicates an opportunity for enhanced patient support through strategies such as comprehensive case management provided by specialty pharmacies, and new practices for prior authorization, step therapy, and Product Listing Agreements (PLAs).
Alarming trend for top two percent of claimants
Éric Trudel, executive vice-president and leader, group insurance, with Beneva, says the top two percent of claimants account for 40 percent of the cost of drug insurance. “This means the other 98 percent of claimants make up just 60 percent of the cost. This compares to the top two percent accounting for 25 percent of costs in 2016 and 10 percent in 2009,” he says. “This is a sign that group carriers and plan sponsors should be working together on the high drug costs because that is an alarming trend.
With the high cost of drugs for rare diseases being the primary reason behind these statistics, Trudel says rare diseases should probably be something that the federal government’s pharmacare plan covers. “That would provide public access across the board. There are people who don’t have private drug plan coverage, and public coverage would give more Canadians access to those specialty drugs. In my opinion, that’s a real problem on which the federal government should work instead of an across the board public drug coverage.”
Restricting off-label use of medications is another way plan sponsors can contain costs, says Trudel. As an example, he mentions a new trend Beneva saw last year with the diabetes medication, Ozempic. “This drug is not so expensive (around $3,000 per patient per year), but it was very popular. Many people were using it for one of its side effects, weight loss, which is not what Health Canada has approved it for. In mid-2023, to help mitigate costs for our plan sponsors, we put in place mandatory prior authorization by our pharmaceutical team to check that it is really prescribed for diabetes. If not, we don’t reimburse.”
For drugs that are approved by Health Canada as anti-obesity drugs (which Ozempic is not currently), he adds that plan sponsors can choose to allow reimbursement; Beneva would just make that an option for that specific sponsor. “We offer the anti-obesity drug clause as an option to our plan sponsors. They can then decide if they want their plan to cover it or not, depending on their philosophy."
What will the next few years look like?
“We haven't seen the double-digit trend rates or cost increases in the last few years,” says Massimo Nini, vice-president, consulting, underwriting and actuarial with AGA Benefit Solutions. “We negotiate with carriers all the time around prescription drugs and large amount pooling costs. However, at this point, there are so many new drugs hitting the market, it will put a lot of pressure on plans.
“The question becomes, what are the next couple of years going to look like? New drugs will hit the market, but what will the prevalence be or the number of individuals that will need to use those drugs? How will they impact private plans?
“This turns the discussion to national pharmacare and the uncertainty surrounding it,” he says. “The one thing that the government's been pretty consistent about is the rollout of a
rare disease program. A lot of stakeholders in the market agree that implementing a rare disease program or program that is targeted for those high-cost drugs would be beneficial and remove some pressure off private plans.”
Nini says in order to manage any benefit plan, sponsors need to think about why they are offering the plan and how they will measure return on investment. “They want to cater to the majority while at the same time recognize there are individual needs and find ways to level the playing field in the context of benefits for all plan members.”
He adds that employers want to attract and retain a diverse workforce so the benefits should reflect what they want to achieve. “What do you add and what do you exclude to satisfy a diverse group while maintaining cost containment?”
Plan sponsors could change the way they view and offer benefits, for example. Instead of offering fertility benefits, offer family building, he says. “A part of that would be prescription drugs, but there is a part that is not. Same sex couples might need support or education around how to build their families that doesn’t include drugs. There are different considerations that help to include more people while still containing drug costs.
“When it comes to obesity, are drugs offered considered lifestyle drugs or should it be considered in the same way as drugs for diabetes or another medical condition? Arguably someone could be healthier and more engaged if they could generate weight loss. Some plans exclude weight loss drugs from their plan offering and some exclude fertility drugs. Do those decisions make sense in terms of the company’s values around wellness, diversity, equity, and inclusion? It’s about balancing the cost containment, accessibility, and the wellness aspect.
“In some cases, the ROI will be clear because members will be more productive at work. But it can also reduce disability costs and absenteeism and things like that. There is also a measure that’s hard to quantify, which is just members’ general well-being.
“From a cost containment standpoint, plan sponsors may make decisions to keep drug costs or group benefit costs in check, but what ramifications could that have down the road? What type of pressure is that putting on plan members? Especially the last couple of years, as the inflation levels have increased, an extra $800 or $900 being paid tax free from a group benefits program could have a huge impact on Canadians. If they forego a treatment in order to afford food or housing, that could have a negative impact on their work and ultimately create a cost for the employer.”
It is important for plan sponsors to remember, that while the number of plan members making claims appears to be returning to pre-pandemic levels, the backlog in Canada’s health care system may take several more years to address to catch up on delayed medical
appointments, diagnostic tests, and surgeries. During that time, there is a significant risk of chronic diseases and serious illnesses going undetected or worsening as a result, and this may impact drug plan costs.
