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2012 Drug Plan rePort b e n e f i t s
plan costs. In particular, Brilinta and Eliquis join new agents such as Pradax and Xarelto to provide a wide range of new innovations in the oral blood clot treatment market—at a cost premium to existing therapies. Byetta and Trajenta are examples of the significant research and development focused on treating diabetes. Innovation in areas such as diabetes will add to cost challenges for plans that have yet to seriously consider their design. In late February, Health Canada put Gilenya—a highly touted initial oral therapy for treating multiple sclerosis— under review after 11 deaths were reported globally. At this point, it isn't clear whether the deaths were caused by the drug or if there were other factors at play. One downside to new therapies is that there isn't the same post-marketing surveillance data available, compared with Time Warp
medications that have been out for longer periods of time. There are some wonderful innovations in the market, but newer doesn't always mean better or safer. Generics Versus brands
The pharmaceutical industry has changed, In February, I spent a Sunday working in but has your drug plan kept pace? the pharmacy. Within four hours, I had six separate patients inform me that they By Mike Sullivan
were not willing to take the generic medication dispensed by their doctor. All six shared the same concern: generics were inferior to brand name drugs. ack in the 1980s, when I the market today, encompassing all of This anecdotal story is supported worked in my father's pharmacy, the expensive biologic and targeted oral by some research that Cubic Health everything was fair game from a therapies. Table 1 on page 14 shows that completed on a set of 600,000 claims drug reimbursement standpoint. It's of all new drug products approved for sale for the proton pump inhibitor (PPI) class incredible to think that, decades later, by Health Canada in 2011, only 50% are of stomach acid-lowering medications. private drug plans have not become considered traditional therapies. While From 2010 to 2011, there was a 15% materially more sophisticated in how some represent new drug classes for increase in the number of claims paid for they manage what is and isn't paid for. common disease states such as type 2 multi-source brand PPIs (i.e., PPIs with For those who have been slow to diabetes and categories such as blood an exact generic equivalent).
embrace responsible, active drug plan thinners, fully half are specialty drugs.
Plan sponsors need to appreciate that management, developing trends may While the impact of expensive there is a role for both innovative brand reshape their approach.
specialty drugs on plan costs is clear, name drugs (the results of meaningful sponsors should note that some of the drug research and development) and traditional therapies in Table 1 also have generic drugs that allow plans to benefit There are many more specialty drugs on the potential to materially impact drug from a lower-cost alternative once a BenefitsCanada • April 2012 / 13
b e n e f i t s
2012 Drug Plan rePort NEw molEcular ENtitiES approvEd
impact on Plan sponsors
brand drug's patent protection expires. major gENEric drug lauNcHES iN 2011 table 2
by HEaltH caNada iN 2011 table 1
Without brand companies, Canadians Brand companies have started combating wouldn't have important products that the lost market share arising from expired Brand name drug moving to generic
Drug class
have produced immeasurable benefits to drug patents with a renewed focus on Brand Name
Category
Primary Use
their health and wellness. programs such as supplemental drug angiotensin receptor blockers It's important to educate plan members benefits cards, which cover the cost traditional therapy seizures associated with Lennox-Gastaut syndrome and explain that Canadian generic difference between the brand product and angiotensin receptor blockers systemic lupus erythematosus equivalents are not of lower quality or less a generic alternative so that the member angiotensin receptor blockers worthy of consideration. If generic drugs is not out-of-pocket with the brand traditional therapy are not bioequivalent to reference brand option. But there is a major issue cholinesterase inhibitors Alzheimer's disease drugs, they aren't approved for sale. emerging regarding co-ordination of traditional therapy Access to lower-cost alternatives after benefits (COB) rules with multiple plans betahistine vertigo patent expiration affords benefits plans and the use of multi-source brand drugs. hospital use product injectable blood pressure-lowering medication savings to fund specialty therapies and For example, take a multi-source brand leukotriene receptor antagonists asthma other innovative brand products. Clearly, drug with a manufacturer's list price non-stimulant ADHD therapies there is a role for both brand and generic (MLP) of $150 for a 100-day supply. A traditional therapy drugs in the Canadian market.
patient arrives at the pharmacy to find theophyllines asthma Despite the wave of new generics that that the medication now has a generic hospital use product intravenous iron replacement for anemia has emerged in recent years (including equivalent that is 35% of the price (MLP: protease inhibitors in chronic kidney disease those drugs listed in Table 2, page 15) $52.50). The patient decides that he or prostaglandin analogues flu vaccine for 2011/12 flu season and the well-documented patent cliff, she wants to stay on the brand drug and there are some alarming trends in generic produces a supplemental card from the migraine headaches oral multiple sclerosis therapy penetration. For example, looking at brand manufacturer. This supplemental 406,000 claims for the selective serotonin card is the "payer of last resort," meaning Source: Cubic Health Canadian Drug Database metastatic breast cancer reuptake inhibitor antidepressant class—in the claim will be submitted first to the oral treatment of hepatitis C which most drugs have generics available employee's plan first and then the spouse's (e.g., Celexa, Zoloft)—generic penetration plan, before the support plan. advanced prostate cancer actually decreased in 2011 to 69.6% of all Look at the impact on the two private to pay up to generic price, instead of In 2013, the maximum PDD markup claims, compared with 73% in 2010. plans when the claim is processed as paying a total of $67.75—the private on the generic alternative would be $0.06. traditional therapy If plan designs don't encourage more follows, according to existing COB plans combined actually paid double that: If another $0.06 is added in commercial cost-effective drug use, where safe and guidelines (assuming a 10% markup from $135.50. That may not be what was terms, the total reimbursement per tablet stem cell mobilizer used prior to stem cell transplant appropriate, how can sponsors deal with pharmacy on the MLP).
intended, but it happens when patients would be $0.12. That's 23% less in the traditional therapy over-the-counter lice treatment an environment in which an ever- Employee plan: 100% co-insurance,
have more than one plan available and pharmacy's pocket per tablet when increasing number of new medications mandatory generic substitution (MGS): supplemental cards of payer of last resort. compared with the brand option. Onbrez, Breezhaler traditional therapy treatment for chronic obstructive pulmonary disease are relatively expensive specialty drugs? Submitted cost is $150 + 10% markup +
This is an example of how plan But there is one encouraging $10 dispensing fee = $175. The plan cuts
Pharmacy's incentive structure
sponsors will have to seriously consider hospital use product radiodiagnostic and tumour imaging agent for development in the battle between back to the generic price of $52.50 + 10%
As of April 2013, generic equivalents in their plan designs if they are looking to generic and brand name manufacturers: markup + $10 dispensing fee = $67.75 (a
Ontario will be priced at 25% of brand provide incentives for cost-effective traditional therapy benign prostatic hyperplasia the industry has begun to focus more difference of $107.25).
drugs, and there will be no more therapeutic options, where available and attention and resources on the private Scenario 1: Spouse's plan, 100%
professional allowances (rebates) on appropriate, if there is concern about traditional therapy chronic idiopathic constipation in women payer market. Today, brand name drug co-insurance, no MGS: The spouse's plan generic drugs. Instead, pharmacies will plan sustainability and the plan's ability manufacturers appear to be more pays the lesser of what it would pay as the be able to receive 10% "commercial to be able to afford high-cost specialty idiopathic thrombocytopenic purpura interested in helping plan sponsors first payer ($175) and the residual value terms" discounts (e.g., volume drugs as well.
traditional therapy treatment of high levels of sodium in the blood measure returns from investments in their (RV) of $107.25. With no MGS, the purchasing). This is an interesting prescription drug benefits by assessing plan pays $175 as first payer, but since the proposition for plan sponsors: whereas If sponsors continue to take a passive traditional therapy atypical antipsychotic for schizophrenia areas such as total burden of illness and RV equals $107.25, the plan pays pharmacies have historically been approach to plan management, how can and bipolar disorder integrating drug, disability and absence $107.25. The pharmaceutical company incented to dispense generic drugs they be successful in ensuring that data. It's vital for plan sponsors to start card pays $0 because the other two plans because they provided much higher they—and their members—receive the traditional therapy treatment of insomnia measuring these returns before it gets to a have already paid the full amount. margins, these changes could start to greatest value for the money invested? traditional therapy point where they start abandoning Scenario 2: Spouse's Plan, 100%
change the playing field. Drug plan management may not have coverage, limiting access or establishing co-insurance, MGS: The plan pays $67.75 Consider a single-source brand drug in changed significantly over the last oral treatment of hepatitis C dollar limits that can all lead to lower as first payer. Since the RV is $107.25, a given class with a unit cost of $1.44 per 30 years, but if things don't start changing adherence to therapy. At the same time, the plan pays the lesser of the two, or tablet and a generic of another common quickly, we won't have to worry about traditional therapy generic manufacturers are putting $67.75. The pharmaceutical company card drug in the same class with a unit cost of what these plans look like in 2042— resources toward educating consumers pays only $39.50, since $135.50 was paid $0.55 per tablet. Based on current pricing, because they will be long gone. advanced prostate cancer about the quality of their products and by the other plans.
pharmacies can receive markups under Source: Cubic Health Canadian Drug Database assisting plan sponsors in understanding Even in the case of two private plans pay-direct drug (PDD) plans as high as Mike Sullivan is president of Cubic Health Inc. the impact of sustainable designs. with MGS—in which the intent is only $0.144 per tablet for the brand drug.
14 / April 2012 • BenefitsCanada
BenefitsCanada • April 2012 / 15

Source: http://www.cubichealth.ca/wp-content/uploads/2012/05/Time-warp-2012-drug-plan-report-BC-May-2012.pdf