Drug trends report shows where costs are rising

After releasing their annual report, experts from TELUS health discuss how plan sponsors can manage costs for their clients

Drug trends report shows where costs are rising

Yesterday TELUS Health announced the results of its 2024 Drug Data Trends and National Benchmarks Report. Among the reports many highlights, it revealed the most reimbursed drug categories in Canada, giving plan sponsors an idea of where costs are rising and what they should be prepared for.

The top category was diabetes drugs, for the second year running, followed by anti-inflammatories, skin care drugs, and ADHD medications. ADHD was a notable inclusion in large part because of the young adult populations who seem to be getting these medications with increasing frequency.

As plan sponsors look at the rising demand for these drugs, experts from TELUS Health weighed in to unpack some of the findings in the report and outline how they can be used to inform cost management strategies going forward.

“It’s all about delivering the best drug for the problem that a plan member might have to cut down on disability and bring them back to a productive work life as soon as possible,” says Martin Belanger, SVP of Payor & Provider Solutions at TELUS Health.

Belanger noted that the report brings in sixteen years of trend data, which allows plan sponsors to gain a wider contextualized view of how costs are rising. He says there are two ways to look at those costs: through the lens of a rising tide, with broad costs increasing year on year, or with a view to individual spikes in categories which can take up greater shares of cost in individual years.

“We're seeing a lot more activity in many therapeutic categories in recent years. And in particular, the key areas to keep an eye on that are highlighted in the report are diabetes, ADHD, weight management, and women's health,” says Vicky Lee, Manager of Pharmacy Consulting at TELUS Health. “These are all categories where we have seen a lot of growth in claimant activities, so more patients accessing these drug therapies, and cost. And we're also seeing just a lot of innovation in these areas as well.”

The area that has perhaps garnered the greatest attention, at least in the media, are the GLP-1 drugs being rolled out now to treat diabetes and obesity. These drugs promise very effective control of diabetes and obesity, which could result in very positive long-term outcomes for members. That could, in turn, result in lower costs related to disability or other outcomes. Nevertheless, drugs like Ozempic are expensive, costing as much as $1,000 per month. Lee acknowledges that the rise of these drugs is a factor in diabetes maintaining its position as the most reimbursed drug category in this year’s report.

GLP-1 drugs highlight a wider issue that many plan sponsors face as drug claims in specific categories rise: how much they should cover when upfront costs are high. Lee’s view is that their decisions could be informed by what’s called a ‘health technology assessment’ which marries clinical and economic evidence to inform decisions around coverage.

Beyond GLP-1 drugs, the report also highlights other drug categories where innovations may offer new treatments and higher costs. Women’s health is one issue that has been underserved for many years but where Lee now sees new drugs treating conditions like endometriosis. Endometriosis impacts around seven per cent of all working age women, so new drugs will have an impact on plan costs. Even if these new drugs don’t cost as much as treatments for conditions like cystic fibrosis, the scale of their potential utilization is enough that plan sponsors may want to pay attention to their uptake. 

One of the potential areas that can help manage costs for benefits plans is in the realm of biosimilars, a category akin to generics for biological drugs. These drugs are often significantly lower cost than their originators, by anywhere from ten to fifty per cent, but offer similar effectiveness. Offering a biosimilar or generic alternative can be challenging from a member satisfaction standpoint when we take into consideration the significant marketing effort around some name-brand drugs, nevertheless Martin Belanger believes plan sponsors need to stay focused on the efficacy of the molecule itself.

“There's a lot of marketing, a lot of noise. Our job is to take that new drug, evaluate it and say it’s very useful to fix this type of sickness, but we have an alternative for you,” Belanger says. “There are different philosophies of drug cost management. We’re there to bring that information to the market. It’s up to the payers and plan sponsors to pick what they feel their members need.”