Employers to face $5.6-billion price tag for specialty drugs within next 5 years: Survey

Number of patients requiring treatments also rising
|hrreporter.com|Last Updated: 05/11/2016

High-cost specialty medications threaten the ability of employers to continue to offer a comprehensive prescription drug benefit to employees, according to a report from Express Scripts Canada, provider of health benefits management services.

Spending by Canadian employers on specialty drugs — used to treat chronic, complex conditions such as cancer and hepatitis C — is expected to nearly double to $5.6 billion for private plans by 2020, according to the report, which draws on analysis of prescription drug claims from millions of Canadians.

Adding to concerns about newly approved treatments costing hundreds of thousands of dollars per patient are the 7,000 drugs currently in the development pipeline, most of which are specialty medications.

At the same time, the number of patients requiring these treatments is rapidly increasing.

"From an economic and employee satisfaction perspective, the pharmacy benefit is highly valued by employers," says Michael Biskey, president of Express Scripts Canada.

"It provides access to treatments on which many Canadians rely. However, unless plan sponsors take action now, it will quickly become unaffordable, making it necessary to transfer the burden of cost and financial risk to employees. If that happens, there is likely to be severe consequences for the health and financial well-being of Canadians."

Additional key findings from the study:

  • High-cost specialty medications continue to consume an ever-larger portion of total prescription drug spending, increasing to 29.9 per cent in 2015 from 26.5 per cent the year before. Of greatest concern to plan sponsors is that specialty spending is on track to reach 42 per cent of total spending by 2020, threatening plan sustainability.
  • Intravenous and injectable treatments administered in hospital settings are rapidly being replaced by new medicines that can be self-administered by the patient. This shifts the cost burden from public plans, which pay for drugs administered in a hospital, to private plans and patients. About 47 per cent of all cancer drugs in development (a total of more than 1,800) are oral medications; another 25 per cent are non-oral self-administered medications.
  • Uninformed patient decisions result in up to $1 out of every $3 spent on drug benefits not contributing to better health. Without the right kind of support at the right time, Canadians choose more expensive medications even when lower-cost alternatives provide similar benefits. Too many aren't able to follow their doctors' instructions, resulting in worsening health and enormous financial tolls on benefit providers.


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