Private plan spending rose slightly in 2019

by Leo Almazora17 Apr 2020

The slow and steady rise in spending among Canada’s private drug plans continued in 2019 as increased use of both traditional and specialty medications outweighed positive steps by Canada’s public health system.

In its latest Prescription Drug Trend report, Express Scripts Canada revealed that private drug plan spending in the country underwent a 1% year-on-year uptick in 2019.

Traditional drug spending inched up 0.1% year over year, while specialty drug spending rose by 2.8%. Even though specialty drugs figured into just 2% of claims in 2019, they accounted for two thirds of the overall increase in spending among private drug plans.

While Ontario’s OHIP+ program and pan-Canadian Pharmaceutical Alliance (pCPA) price negotiations lifted some of the burden of traditional drug spending off private plans’ shoulders, it was negated by a broad uptake of higher-cost drugs and supplies for common diseases such as diabetes.

“Utilization will continue to increase for certain diabetes medications like the SGLT-2 inhibitors as other benefits for patients with diabetes are established,” Express Scripts said, adding that expanded use of monitoring technology also played a role.

And even as some provinces rolled out programs to allow the use of biosimilars, specialty drug spending among private plans was more heavily accelerated by higher use of existing drugs with new indication approvals, the continuing launch of oral cancer medications that aren’t covered by the public health system, and increased use of specialty medications for asthma.

The report predicted that over 2020, a shift in recommendations from inhalers to higher-cost asthma medications as first-line therapies will drive an increase in traditional spending. The adoption of flash glucose monitoring systems over glucose monitoring test strips among diabetes patients is also expected to put added cost pressure on prescription drug plans.

Specialty drug spending is anticipated to soften eventually, however, as new regulations by the Patented Medicine Prices Review Board are expected to result in the removal of U.S. and Switzerland — countries known for having higher patented drug prices — from the board’s list of reference countries effective July 1.

“Proactive approaches to swiftly increasing levels of specialty medication spending and other new challenges in the pharmacy landscape are critical,” the report said, highlighting extremely high-cost gene-based therapies as the most significant challenge to come in the near future.