The key drivers of change in spending by private drug plans in 2022 can be boiled down to two words: biosimilars and diabetes.
“Nationally, biosimilars’ [share of claims] grew from four per cent in January 2019 to 32 per cent in December 2022. That’s an important increase,” said Daniel Drolet, Industry Expert and Senior Partner at the benefits advisory firm of Norman Beaudry, and presenter of the Data Trends and National Benchmarks Retrospective 2022 at TELUS Health’s annual conference on April 26.
Impact of biosimilars
Provincial biosimilar switching policies are the single biggest driver of uptake in private plans. In B.C. and Québec, where switching took effect in 2019 and 2022, respectively, biosimilars’ share of claims for all biologics reached 65 per cent by the end of December 2022. In contrast, biosimilars’ share of claims was just 15 percent in provinces without a switching policy.
The adoption of switching policies by private plans was especially rapid in Québec, occurring mostly in 2022. As a result, the average eligible amount per certificate for specialty drugs dropped by -4.3 per cent.
In contrast, Ontario’s private plans saw an increase of 3.9 per cent in the average eligible amount per certificate for specialty drugs. The Ontario government’s policy for biosimilar switching began rolling out on March 31 this year and takes full effect on December 30. “It will certainly be interesting to see its impact in 2023,” said Drolet.
When all regions are combined, specialty drugs’ average amount per certificate climbed by 0.9 per cent, well below the growth rate of 3.4 per cent for traditional drugs, due in large part to the increased utilization of biosimilars in Québec. In fact, for the first time in more than 10 years, specialty drugs’ share of the total eligible amount declined: by just one point to 33 per cent, but a decline, nonetheless.
The diabetes story
When specialty and traditional drugs are combined, the total eligible amount per certificate grew by 2.6 per cent in Canada in 2022. Again, savings associated with biosimilars contributed to this moderate rate of growth; on the other hand, those savings were offset by increased spending on diabetes drugs.
The diabetes category became the largest category by eligible amount in 2022 with a 12.9 per cent share, up from 12.0 per cent in 2021. This ends the 10-year reign of rheumatoid arthritis (RA) drugs, whose share declined to 11.2 per cent from 12.6 per cent.
Looked at another way, Drolet explained that the diabetes category accounted for fully half of the inflation in eligible amount per certificate recorded for 2022, or 1.3 per cent of the 2.6 per cent.
Utilization of one diabetes drug in particular, Ozempic, drove the category’s ascent in 2022. In fact, when the overall inflation rate of 2.6 per cent is broken down at the product level, Ozempic was the biggest contributor at 1.6 per cent.
As widely reported in the media, Drolet noted that some of the growth came from the drug’s off-label use for weight loss. That may begin to change this year due to the anticipated launch of Wegovy, a version of Ozempic that has been approved by Health Canada for weight loss. “It will be interesting to see how those two products evolve in 2023,” he said.
Another product worth noting: Trikafta for cystic fibrosis, whose share of the eligible amount skyrocketed after its indication expanded to include children under the age of 12. So much so that it contributed 1.3 per cent to the overall increase of 2.6 per cent in the eligible amount per certificate. In just one year, its ranking on the products list leapfrogged from 95th position to eighth.
Stepping back, the average eligible amount across all claims increased by 2.3 per cent in 2022. Additional analysis found that this declined to 1.7 per cent for claims adjudicated by plans with managed formularies. In dollar terms, the average eligible amount was $89 per claim within a non-managed formulary compared to $75 within a managed formulary. “That’s a 17 per cent difference in the favour of managed plans,” said Drolet.
Additional findings of interest include:
- Seven per cent of prescriptions dispensed are brand-name drugs for which lower-cost generics are available, which may be an opportunity for increased generic penetration in some provinces.
- Almost one in five claimants (19.3 per cent) took an antidepressant in 2022, up from 15.9 per cent in 2018. Atlantic Canada has the highest share, at 27.8 per cent of claimants.
- Within the top-10 categories, drugs for attention deficit hyperactivity disorder are the fastest growing in both eligible amount and claims. Most of that growth is coming from adults, who now represent more than half of claimants in all regions except Québec.
- The top five emerging drug classes based on growth in eligible amount are cystic fibrosis, weight management, rare diseases, migraine and gastrointestinal.
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