Private drug plans in Canada saw an increase of 7.6% in eligible costs in 2019—the largest increase in the past five years, according to the 2020 edition of TELUS Health’s DRUG DATA TRENDS & NATIONAL BENCHMARKS report released in July.
The implementation and subsequent removal of OHIP+ in Ontario in the private sector (for plan members under 25 years of age) over a 15-month period was a key factor behind the swing in numbers. However, even after removing its impact the data shows notable increases in all regions compared to 2018.
A closer look at the breakdown between claims for specialty and traditional drugs gives a clearer picture of the increase in eligible costs. The average cost per claim for a specialty drug grew by 2.1% in 2019 and the rate of growth in utilization was 7.8%. Specialty drugs accounted for 30% of all eligible costs in 2019, and are used by just 1.1% of claimants.
At the same time, notes the report, “the trend for traditional (non-specialty) drugs has shifted.” For the better part of a decade eligible costs had declined or were flat, thanks to numerous patent expiries of blockbuster drugs and legislated reductions in pricing for generic drugs. This deflationary trend helped offset the cost impact of specialty drugs; however, it appears to be winding down, as 2019 reported an increase in costs, by 2.9%, for traditional drugs.
The TELUS Health report also considers adoption rates of plan design tools. For example, 56% of plan members in 2019 had drug plans with mandatory generic substitution policies, up from 43% in 2015.
The annual TELUS Health report presents major trends in private drug-plan costs and utilization and is divided into four main sections: costs & utilization; drug plan design tools; specialty drugs; and drugs by therapeutic class. The data for 2019 was extracted from the TELUS Health database of more than 13 million insured individuals, who transacted more than 150 million prescription drug claims.
This article is part of The Benefits Alliance Take 5 for Health Benefits. Take 5 is a quarterly initiative that provides a deeper look a the employee benefits space by providing examples, research and case studies on what’s working for employers in Canada.