Canadian HR Reporter

CANADIAN HR REPORTER OCTOBER 2019 24 FEATURES BENEFITS Working toward drug plan sustainability Biosimilars, generics among tools that can help ensure employee health By Jason Kennedy H ealth care remains a fundamental and defin- ing issue for Canadians. As such, ensuring that private drug plans evolve with Canada's changing health-care landscape is of great importance. It is critical that plan sponsors have the right information to en- sure employee health benefits con- tinue to support the best possible health outcomes for the workforce, while ensuring sustainability as the rising costs of medications remains a constant challenge. We are not just living longer in Canada, we're now working longer, too. Chronic diseases and increased utilization are contribut- ing factors to growing prescription claims costs amid the already high costs of drug plans in Canada. As we continue to see the unique impacts of our country's aging population, it is important for plan sponsors to prepare for the need to provide adequate drug coverage for aging employees and to ensure plans are designed to support drug plan sustainability. e TELUS Health Drug Data Trends and National Benchmarks Report highlights trends in Cana- dian private drug plan costs im- pacted by regulatory issues, par- ticularly those affecting employee benefits, as well as providing in- sights on utilization and plan de- sign tool adoption. It uncovers the story behind prescription drug claims, the mul- tiple industries and communities it affects and how we can better use and analyze the data to help build sustainable benefits plans. Challenges with mandatory policies Further efforts to improve plan sustainability should look at plan design tools related to the use of generic drugs and biosimilars. Biosimilars are alternatives to first- on-market specialty biologic drugs made from or containing living or- ganisms, which often exhibit com- plex molecular structures. Despite there being no expect- ed clinically meaningful differenc- es in efficacy and safety between a biosimilar and the biologic drug that was already authorized for sale, as well as them being sub- stantially less expensive, uptake has not been consistent across drug types and therapeutic areas. Hesitancy around the use of biosimilars is proving to be a ma- jor barrier to the adoption of man- datory switch policies that would provide the same benefits to pa- tients while reducing eligible costs. Mandatory switch policies have the potential to significantly increase the acceleration of bio- similars uptake, creating savings that could potentially be invested into other drugs and treatment areas, contributing to overall plan sustainability. Public policymakers have rec- ognized the benefits of biosimilars adoption, with British Columbia leading the charge as the first pub- lic payer to implement a manda- tory switch policy in early 2019. While mandatory switch poli- cies may be viewed as too aggres- sive or disruptive for some plan sponsors, additional options exist through the use of prior authori- zation or step therapy approaches where newly diagnosed members must start with the biosimilar. Another option for plan spon- sors is a reference-based pricing type approach, where reimburse- ment for the originator is limited to that of the biosimilar. is is an option for preserving plan mem- ber choice while, at the same time, providing cost containment for the plan. Generics and plan sustainability Policies for generic drugs can also play a role in improving plan sus- tainability. Generics are bioequiv- alent to their originators in terms of chemical composition and clin- ical benefits, but they are available at more affordable prices. As private plan sponsors aim to design long-lasting plans, they may consider options for favour- ing the increased use of generic molecules over their multisource brands or me-too, single-source molecules. This can be done through a number of ways, including plan design changes, formulary man- agement and generic substitution options. Approaches could in- clude current mandatory generic options as well as broader generic substitutions that go beyond the traditional approaches of inter- changeability. is can allow plan sponsors to capitalize on some of the interchangeability nuances in provinces such as British Colum- bia and Alberta. In light of Canada's advancing health-care landscape, plan spon- sors should take a closer look at their own drug plan data, collab- orate with trusted advisers and develop insights-driven health benefits plans that continue to support the workforce of today and tomorrow. e use of biosimilars and ge- nerics are two of the tools in an ever-evolving landscape that can help ensure employee health while building sustainable drug plans of the future. Together, with a commitment to thoughtful assessment of both patient outcomes and cost, we can imagine and achieve this careful but critical balance. Jason Kennedy is a pharmacist and di- rector of operations at TELUS Health. For more information, visit www.telus. com/en/health. HR News at Your Fingertips Sign up for the Canadian HR Newswire today for free and enjoy great content from the publishers of Canadian HR Reporter. THE LATEST NEWS Stay on top of essential late-breaking HR news and developments. THE BEST COMMENTARY Access trusted analysis and opinion on the cases and changes that are shaping the HR landscape. DELIVERED WEEKLY Your profession can change quickly, which is why you need the freshest, most recent information. FOR READING ON ANY DEVICE Get the news and opinions you need on any device. Whether you read at work, or on the go, the newswire adapts to your screen. Visit www.hrreporter.com/canadian-hr-newswire Under 10 . . . . . . . . $6.42 10 to 19 . . . . . . . . $14.30 20 to 29 . . . . . . . . $15.88 30 to 39 . . . . . . . . $32.45 40 to 49 . . . . . . . . $48.98 50 to 59 . . . . . . . . $70.90 60 to 69 . . . . . . . . $94.72 Monthly eligible cost per insured in 2018, by age group Hesitancy around the use of biosimilars is proving to be a major barrier to the adoption of mandatory switch policies that would provide the same benefits. Top 10 drug classes in 2018 % adjudicated amount % claimants Rheumatoid arthritis 12.3% 0.6% Diabetes 10.5% 6.9% Skin disorders 6.4% 20.9% Asthma 5.8% 17.5% Depression 5.2% 16.1% Cancer 4.4% 1.5% Blood pressure 3.9% 15.4% Multiple sclerosis 3.7% 0.2% ADHD/narcolepsy 3.4% 3.4% Antibiotics/ anti-infectives 3.2% 40.6% Source: 2019 TELUS Health Drug Data Trends & National Benchmarks 2018 2017 2016 2015 2014 0% Mandatory generic sbustitution Regular generic sbustitution No generic sbustitution 20% 40% 60% 80% 100% Insureds with plans that include generic drug policies, 2014-2018

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