Report looks at trends among age groups, dominant classes such as diabetes, ADHD
After more than 15 years of steady gains, specialty drugs’ share of the total eligible amount plateaued in 2023 — after declining for the first time in 2022.
That’s one of the findings of a report from TELUS Health looking at Canada’s management of prescription drug plans.
Specialty drugs’ share of the eligible amount was 31.2% in 2023, down by more than a percentage point compared to 2021. At the same time, the number of claimants using a specialty drug has slowly edged forward for the past 16 years — though it has yet to reach 2% of all claimants. In 2023, 1.8% of claimants used a specialty medication.
Sixteen years ago, specialty drugs accounted for 10.4% of the eligible amount and 0.5% of claimants, said the report Drug Data Trends & National Benchmarks.
It’s still significant, says Vicky Lee, manager of pharmacy consulting at TELUS Health, as the 1.8% of claimants in the specialty space represent almost one-third of the overall spend.
“But that seems to have plateaued, in a sense, over the recent years, so we're not seeing that more exponential growth that we were seeing years ago in that space. It seems to be attributed to the biosimilars coming to the market, as well as other sorts of policies.”
One of the big reasons why 2% of claimants end up costing one-third of the spend is because the specialty drugs or drugs for rare disease can be “super expensive,” says Marc-André Gagnon, associate professor at the School of Public Policy & Administration at Carleton University.
“One of the big issues for a lot of private plans is all these very expensive new drugs coming on the market.”
But more exact numbers around biosimilars would be helpful, he says.
“What we've been seeing is, for example, with patient support programs with different types of copay cards, often the brand name that is costing twice as much as the biosimilar is massively prescribed to patients and reimbursed by the drug plans.
“I would like to have more details about this because… many of these [specialty] drugs end up being paid by public plans through catastrophic coverage. So, basically, the private plans are only paying a part of this. So, to better understand this slowing down, I would like to know more, and I don't have enough data.”
Generics take up two-thirds of prescriptions
As for generic medications, they represented two-thirds (67.5%) of all prescriptions covered by private drug plans in 2023, compared to single-source brands (25.9%) and multi-source brands (6.6%).
Generics do not yet exist for most of the remaining prescriptions, says the TELUS Health report, however, there’s room for growth in certain regions, and for plans that have not adopted mandatory generic substitution policies.
“Policies are definitely helping with that because, of course, generic drugs are associated with lower costs,” says Lee. “What we're seeing, though, is there’s still a portion that might be contributed to those plans that don't have generic pricing policies in place, where 6.6% of the claims are still represented by the multisource brand drug claims, so those are... the brand drugs that do have generic options available.”
In addition, there might still be a generic pricing policy in place, she says, “because the pricing policies don't force choice, what they do is they just pay at the lowest cost alternative pricing. So it doesn't mandate choice, it still gives that option available for plan members, but it just helps to go further and manage costs on the plan to make them more sustainable.”
For Canada, one of the low-hanging fruits to reduce costs for private drug plans is mandatory generic substitution, and it's good to see that happening, says Gagnon.
“I mean, it's not perfect, we do still have some plans not doing this. But, overall, we have a high level or high proportion of generic prescriptions, even for private plans.”
And there are different ways of implementing mandatory generic substitutions, he says.
“One is to force people to switch, which is a bit more difficult and problematic, versus when you have a new prescription, basically, to directly start with the generic or the biosimilar; and the second part is much easier to implement, and absolutely not problematic when it comes to the best available data.”
Breakdown by age groups
When it comes to the different age groups, the TELUS Health report doesn’t have too many surprises. Claimants aged 19 and under grew their share from 8.0% in 2008 to 9.9% in 2023, while those aged 20 to 44 grew their share from 29.5% to 34.4% and the share for 45- to 64-year-olds declined from 62.4% to 55.7%.
The average annual eligible amount per claimant by age in 2008 was $205 for 19 and under; $422 for 20 to 44; and $987 for 45 to 64. Fifteen years later, those amounts rose to $468, $845 and $1,424, respectively.
Overall, there’s growth in all age groups, and most of the spend is coming from the older populations, which makes sense, says Lee, because they have multiple comorbidities and more progressive diseases, so they require more expensive therapies.
“But, generally speaking, we are seeing a lot more treatment options being available for younger populations, particularly adolescent pediatric, because what usually happens in when drugs get approved by Health Canada, they get the adult population, and they eventually get expanded indications into the adolescent and pediatric population.”
This can be seen, for example, with cystic fibrosis drugs, where the newest drug is driving a lot of the growth in that class, she says, “and that's because it's been expanded to pediatric populations and adolescent populations as well.”
Cystic fibrosis therapy is also new to the top-10 list, coming in at ninth position with a 2.6% share of the eligible amount — even though these drugs are needed by less than 0.02% of claimants, says TELUS Health. A new class of medications, called modulators, has transformed the treatment of the genetic condition over the past five years; for example, the average annual eligible amount for Trikafta is $163,000.
Diabetes drugs dominate drug plans
Perhaps not surprisingly, diabetes drugs and devices easily took the lead in the top-10 list of categories based on eligible amount, says the report, ending 2023 with a share of 15.4% — more than four percentage points ahead of drugs to treat inflammatory diseases such as rheumatoid arthritis (11.2%).
What’s behind the surge? It's really a variety of factors, says Lee.
“Prevalence is increasing… when I looked at the recent stats, from 2002 to 2022, the prevalence has almost doubled or more than doubled in Canada,” she says.
“There's more therapeutic options that are more efficacious and safer these days, so that contributes to that utilization as well. And guidelines have changed... if you have certain comorbidities, they recommend combination therapies right off the bat. So that's going to contribute to the utilization for the class as a whole.”
In addition, some of the diabetic medications are being approved for other indications, such as heart failure or weight management, says Lee.
“But again, there's programs in place to make sure that plans are able to ensure that those drugs are reaching the right population, for the right indications that are actually Health Canada approved.”
In the diabetes space, the “Ozempic effect” is massive and unlikely to stop in 2024, says Gagnon.
“It is only approved for people with diabetes but it is being massively prescribed off label for people who simply want to lose 15 pounds or so. But you do the stats for this, you end up classifying this drug as a drug for diabetes,” he says. “If all private plans were demanding some type of proof of diabetes to reimburse Ozempic, we would have a different portrait.”
At the same time, the federal government announced in February that they want to implement a national pharmacare when it comes to drugs for diabetes, which would not include Ozempic or similar drugs, says Gagnon.
“For private insurers, this announcement should be very welcome. Basically, that will be a way for them to be able to compensate, at least a little, the rising costs for diabetes drugs like Ozempic.”
And in the next years, there might be a switch, he says.
“We might have this new category of weight loss drugs that might become one of the main categories in terms of cost for private drugs.”
Rise of drugs for ADHD ‘continues unabated’
The rise of the category of drugs to treat attention deficit hyperactivity disorder (ADHD) continues unabated in 2023, said the TELUS Health report. The category surpassed both asthma and depression therapies on the top-10 list, moving to fourth position from sixth. Its share of the eligible amount was 5.8% in 2023.
Greater awareness of the condition among adults has driven diagnoses, according to Lee, with adult claimants overtaking pediatric claimants in 2022.
“In the pandemic, there was that large influx in the 20 to 40 population, and primarily driven in females, so I think a combination of more awareness — with social media and other platforms [making people] more aware of the symptoms and how to identify ADHD, but also when everyone was home with their kids, maybe they were more aware of their kids getting it and they got their kids diagnosed,” she says.
“And there is a bit of a genetic component, so they probably started realizing it in themselves too and getting diagnosed.”
