Blockbuster Drugs: What Lessons Have You Learned? (CBN Recap)

The Connex Benefits Network, formerly the Benefits Breakfast Club, discussed the Lessons We Can Learn from Blockbuster Drugs with presenters at our November 28, 2024 session.

History:

• In the 1970s – With a younger population, healthcare was largely focussed on treating acute illness and injuries, and drugs played a limited role in preventative health. Private drug plan formularies were open and costs were increasing at a manageable level.
• In the 1990s – New industry terminology evolved as treatments evolved, i.e. ‘medically necessary’ and ‘lifestyle’ began to be used to evaluate drug eligibility.
• In the Early 2000s – Biologics introduced new science that delivered preventative, management and sometimes curative treatments, for serious, debilitating or life-threatening diseases like rheumatoid arthritis and Crohn’s disease. New, higher price tags came with these new medications, and the patient groups could be very large. The term ‘specialty drugs’ was created to describe new medications with a price tag of over $10,000 per patient per year.

Today:

• Well Into the 2000s – The number and price of specialty and high volume blockbuster drugs has increased, and there has been a shift from traditional, small molecule, to specialty medications being introduced in Canada. Specialty medications, often for drugs for rare diseases, have been introduced at even higher prices i.e. tens of thousands annually vs hundreds of dollars a year per patient for non-specialty medications. As a result, the benefits industry has developed a patchwork of management and managed care tools over time including generic substitution, new pooling mechanisms, therapeutic substitution, plan maximums, new drug reviews and prior authorization, to name a few. The latest being biosimilar strategies.
• Rare Diseases – The group benefits industry continues to struggle with affordable pricing of group drug plans and management of high-cost claims. Drugs for rare disease can now reach $700,000 or more. These are levels that group plans and group pooling were never designed to absorb. New questions are being asked about who should be eligible for these medications, when they are eligible, and whether these claims levels are affordable for the group benefits industry or should be the sole responsibility of a national strategy.
• The National Strategy for Drugs for Rare Diseases – While initially welcome, there are growing concerns:
  1. Stalled – Nothing seems to be happening and there is no clear timeline for a national solution
  2. Underfunded – The initial funding announcement was short of what is required to address drugs for rare diseases nationally
  3. High Threshold – Drugs for Rare Diseases does not address specialty drugs for non-rare diseases that are also unaffordable for the average Canadian without an insured drug plan or with a plan maximum, as is the case for many biologics and even biosimilars. Public plans may not always be able to address patient needs for reimbursement.
• Sustainability – New solutions are needed to create sustainable benefit plan coverage, but innovation and change can be scary for a conservative industry like group benefits insurance. New technology solutions like electronic prior authorization that can create workflow efficiencies, improve the business case for coverage and provide health outcomes data have not been adopted. Even with new solutions, providers will continue to look for a balance of risk vs budget impact.
• Other Challenges
  1. Clinical – Managing adherence for high-cost therapies plus ensuring clinical efficacy and monitoring outcomes.
  2. Operational challenges – Including the numbers of drugs and the volume of prescriptions subject to prior authorization, e.g. GLP-1s, as well as the current specialty pharmacy distribution models.
  3. Payer affordability – Balancing access and affordability, including the impact of specialty drugs and drugs for rare diseases on plan design, premiums, and pooling levels/costs.
  4. Delayed medication launches and listing in Canada – This now impacts private as well as public payers, with approval timelines delaying access to medication by several months or years. Review times for private payers are getting longer.
• Looking Ahead – There will continue to be operational complexities and challenges in managing access. There are also opportunities for innovation through collaboration across stakeholder groups to ensure that group drug insurance is sustainable. Considerations include:
  1. Insurers – Better forecasting and innovation in risk management
  2. Pharma – Disclosing pipelines to allow insurers to prepare, early/pre-NOC (Notice of Compliance) development and sharing of budget impact analysis
  3. Insurers and Pharma – Progressive product listing agreements (PLAs), and demonstrate the value of innovation vs cost containment.

One thing is certain: drug access, the claim process and drug plan management will keep the industry busy into the foreseeable future.

With thanks to our presenters (listed below) for giving attendees food for thought.

Don’t forget to join us for our February 6, 2025 CBN live webinar for more insights from industry experts.