Drug expenses continue to put pressure on group insurance plans. Specialty drugs are the main drivers, but traditional medicines are gaining ground.
Recent reports from the two main players in electronic drug reimbursement solutions for private plans confirm the upward trend in costs.
Express Scripts Canada (ESC), the second-largest player in the electronic reimbursement market, recently published its 2023 Drug Trend Report. The report shows that overall plan spending on drugs rose by 6.3 per cent in 2022, compared with 2021. The increase had been 4.3 per cent between 2021 and 2020. The number of claimants also increased in 2022, by 5.4 per cent.
Specialty drugs continue to make up the lion's share of expenses, ESC finds. These drugs costing $10,000 or more accounted for 27 per cent of plan spend, but represent only 0.7 per cent of all claims.
Rising cost of diabetes
TELUS Health, the leader in the e-reimbursement market, has drawn up a ranking that shows that diabetes has overtaken inflammatory diseases as the most costly health condition for private group insurance plans in 2022. The trend was illustrated by a presentation on the evolution of the drug market by TELUS Health pharmacist Blandine Mosna.
At $745.2 million in 2022, total eligible diabetes costs climbed 16.6 per cent since 2021, reports TELUS Health. What’s more, it points out that total OZEMPIC costs have skyrocketed by 87.8 per cent between 2021 and 2022.
OZEMPIC, manufactured by the pharmaceutical company Novo Nordisk, has been approved by Health Canada for the treatment of type 2 diabetes. This condition is characterized by chronic hyperglycemia, or overly high levels of glucose or sugar in the blood.
The ESC table below mirrors TELUS Health’s data on the importance of OZEMPIC in private plan costs.
Fuelled by obesity
In fact, the numbers don't tell the whole story. The lack of a Health Canada-approved treatment for obesity has driven up the cost of OZEMPIC.
“Despite recognition by the World Health Organization and the Canadian Medical Association that obesity is a chronic disease, 65 per cent of Plan Members do not have prescription drug coverage for obesity medications,” ESC President Dorian Lo states in his report. Many plan members with weight problems seem to have turned to OZEMPIC as a cure because of its efficacy as an appetite suppressant.
Although OZEMPIC has not been approved as an anti-obesity treatment, insurers have apparently tolerated its use for this condition for a while. However, several have recently announced that they will stop doing so, according to an opinion piece published in Le Devoir on June 6, signed by Émilie Vigneault-Simard, a specialized nurse practitioner.
For example, Beneva has announced to its intermediaries and policyholders that the change is being implemented “on June 1, 2023, with a transition period until July 16 for existing cases,” Éric Trudel, Vice President and Leader, Group Insurance at Beneva, told The Insurance Portal.
iA Financial Group has taken the same stance. “iA Financial Group's drug assessment committee has decided to add the drug OZEMPIC and the FREESTYLE LIBRE sensor to its list of drugs requiring prior authorization. This measure is in place to support the optimal use of these products,” it announced in a press release dated May 19.
Demand exploding
In a release to its network of brokers and group clients, Beneva says it is implementing new cost-control measures due to an increase in claims related to a class of drugs called GLP-1 receptor agonists. To ensure optimal drug cost management, step therapy and an authorization program for this class of drugs will be implemented.
“The therapeutic class of GLP-1 receptor agonists includes several drugs designed to control glycemia in adults with type 2 diabetes. In recent months, OZEMPIC, a member of this class, has been found to be effective at promoting weight loss. As a result, OZEMPIC has been prescribed for an indication that does not comply with that of Health Canada,” Beneva’s press release reads. GLP-1 receptors act when blood sugar levels are higher than normal.
An unprecedented phenomenon
At Beneva, Éric Trudel says he has stopped reimbursing “people who take this drug but who are not type 2 diabetics.” “Never before has a drug started to be prescribed outside its main indication to such an extent. We've been tracking reimbursements for this molecule every month, and we've seen costs explode exponentially. In the last few weeks, we had reached about 50 per cent of cases where OZEMPIC was being used off-label,” he says.
Beneva has joined forces with its partners to counter this trend. “We have worked with TELUS Health to be able to implement step therapy starting June 1. To be reimbursed for OZEMPIC, people will have to prove they have diabetes," explains Trudel.
All the same, there’s hope for people grappling with a weight problem. In its report, ESC says it expects that Semaglutide (Novo Nordisk's OZEMPIC) will also be marketed in Canada under the name WEGOVY as an anti-obesity medication.
