What are some ways employers can reduce costs?
The biggest new drivers affecting benefit plan spending are rising mental health spending and the high costs of covering specialty drugs, according to the latest TELUS Health 2022 Drug Data Trends and National Benchmarks Report.
Drugs treating ADHD as well as for depression and anxiety rose sharply in 2021, which can be attributed in part, to some of the effects of the pandemic.
“We’ve seen a significant increase in ADHD drug utilization amongst children, so it’s anticipated that homeschooling may have contributed to the increase of ADHD diagnosis in children: they may find it difficult focusing in front of a screen all day,” says Shawn O’Brien, principal data enablement and HBM product at TELUS Health in Toronto.
But when it comes to mental health costs, it’s not only due to the costs of the actual drugs themselves, says another drug-cost expert.
“We’re seeing utilization outpacing the cost per on a per-claim basis. There is definitely more utilization because mental health drugs are, as a category, pretty inexpensive: most of the drugs are generic and so it’s definitely increased utilization,” says Joanne Jung, pharmacy practice leader at Willis Tower Watson in Vancouver.
And with the pandemic easing, this also brought upon new consumption, she says.
“There might be pent-up demand, people who weren’t able to access [health care], they didn’t want to get out and go see a physician in 2020, when the pandemic first hit. In 2021, there could have been a backlog of people who are now getting the medical attention because they have the vaccine, they’re willing to go out or there’s more online virtual providers as well, which is increasing access to providers. So with increased access it also leads to usually increased prescribing.”
When it came to specialty drugs — which TELUS defines as costing more than $10,000 in annual treatment costs — the numbers are even more eye-opening, says O’Brien.
“The cost for specialty drugs came through at 9.5 per cent year-over-year so those drugs alone accounted for 34 per cent of total drug spending, yet there’s only 1.4 per cent of the total claimants that are driving that 34 per cent, so it’s significant.”
And while COVID lockdowns didn’t really play a part in these costs, he says, they are “considered more pandemic-proof than traditional drugs, where we did see acute therapy utilization drop off; but you wouldn’t see that with specialty drugs that are really treating very, very rare diseases.”
Other conditions such as eczema or other skin disorders, as well as treating asthma and migraine prevention, are also a part of the specialty-drug costs numbers going up, says Jung.
“Those are the three more common conditions that we’re seeing more specialty drugs being produced for so that’s increasing utilization, as well as cost for those types of conditions are getting more expensive.”
‘Levers to pull’
While employers do have to account for these rising costs, they can be looked on as a potential benefit, says O’Brien.
“On the flip side, that could keep someone productive and at work, so there is a productivity gain… before there were no treatment options so that does come with a cost.”
“It’s a cost of doing business but there are levers to pull to make sure that you have a benefit program that’s a value to employees. It’s attraction and retention. It goes a long way when you have a valuable benefit program,” he says.
For benefit plan sponsors, there are a number of steps that should be employed to help reduce costs, says Jung.
“[It’s about] trying to address it [from a] wellbeing perspective; putting in programs to help address mental health, as well as trying to encourage more of the non-drug treatments like expanding benefits for mental health providers. Traditionally, most plans would just cover psychologists but now that we’re seeing a lot of the plans extend to counsellors and therapists, trying to promote more virtual care, so accessibility has increased.”
To help manage the costs of specialty drugs, look to certain public health practices, such as the BC PharmaCare plan, in which drugs are being paid for by governments, says O’Brien.
“They have a switching policy that if you are on the biologic drug, you would have to switch to the biosimilar drug if it’s available. [It’s] a lot less expensive. We saw the adoption of the cost of specialty drugs in B.C. really dropped quite a bit compared to the rest of Canada because they’re leveraging some of these lower cost biosimilars.”
Also, review the numbers around spending and study trends, says O’Brien.
“They need to look at their own programs, look at the cost drivers, that should be step one; then, see where there may be opportunities to maybe change the design or you can even survey employees on what matters most to them. Drug benefit programs in general are really an attraction and retention tool but it needs to be sustainable.”
