Irene Klatt, vice-president, health insurance, with the Canadian Life and Health Insurance Association, talks about biologic drug therapies and where they fit into the group benefits world.
Are biologic drug therapies usually covered by group benefits plans?
They are a pretty recognized therapy. For example, people may not think of insulin as a biologic. Some of the newer biologic therapies—some of the products for rheumatoid arthritis (RA), multiple sclerosis (MS) and cancer—have made some remarkable advances for the treatment of those conditions. When people hear the word ‘biologics,’ they are thinking ‘very expensive.’ That may be the case sometimes, but not always.
Do provincial health plans pay for some of the new biological therapies?
I know that the Ontario Drug Program officials are looking at what they can do to expand access to these biologics. If they are looking at it, that says they know they aren’t covering as many as are on the market—or that there is a concern that there are more coming and they need to prepare to cover them.
How important is it for employers to cover biologic therapies?
Plan sponsors need to weigh the value as they would with any other indication. Would that person be functioning normally at work without that therapy? Plan sponsors should really look at the therapeutic value and never evaluate based on cost alone. Employees may be able to budget for some of the lower-dollar items, but when it comes to very expensive [treatments], they will be looking for some assistance—through public plans or private plans or a combination of the two.
In which area of biologics do you think we will see the greatest growth?
I would expect it would be in the area of gene therapy and vaccines: more vaccines for adults and vaccines for cancers. The other thing that is coming is subsequent-entry biologics. Market forces being what they are, we may see a reduction in some of the prices. The challenges may be that because the molecules are not identical (unlike generic drugs), it may not be as easy to switch a person from one biologic to another.
Should plan sponsors be concerned about the cost impact of these treatments?
I’m sure they are very concerned about anything that may increase the cost of their plans. Some of the vaccines may affect a large percentage of the population. We’ve seen, on both the private and the public side of drug programs, significant [cost increases] year over year. In an extended health plan, about 75% to 80% goes toward drug costs. If plan sponsors look at their numbers, the utilization of blockbuster drugs (those that are highly popular and generate more than $1 billion of revenue each year) is likely contributing to the cost and experience of their plans more than the biologics would.
How can plan sponsors balance the costs with the benefits of these therapies?
We may be looking more and more to the Common Drug Review (CDR) to do analyses. The CDR is part of the Canadian Agency for Drugs and Technologies in Health and is set up to provide expert advice to public drug plans to ensure their sustainability. It reviews drugs for therapeutic value and cost-effectiveness. I think that’s the information plan sponsors are going to be interested in. Several pharmacy benefits managers have their own therapeutics evaluation committees as well.
Is there a need for plan redesigns to cover these new therapies?
The more traditional plans basically cover medicine once Health Canada says the therapies are safe to use. If you have a plan that has a set formulary, it would be wise to ask at what point items are added and how restrictive it is. If plan sponsors have questions about this, they should be asking their providers or pharmacy benefits managers. Finding out if these vaccines are covered or not—those are emerging questions that plan sponsors are going to want to address.
April Scott-Clarke is assistant editor of Benefits Canada.
april.scottclarke@rci.rogers.com
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© Copyright 2009 Rogers Publishing Ltd. This article first appeared in the October 2009 edition of BENEFITS CANADA magazine.