Quebec joins the shift to biosimilars initiated elsewhere in Canada
On May 18, the Government of Quebec announced that it would start to shift towards the use of biosimilars for everybody insured by the Régime général d’assurance médicaments (RGAM). This initiative will save the government more than $100 million annually. It is part of a national movement that began in British Columbia and Alberta and which will include other provinces by the end of the year.
The program announced should cover the majority of biosimilars, including Remicade™ and Humira™. Since patients need to consult their physician to have their prescriptions modified, they will have until April 12, 2022, to switch to the biosimilar. The reference biologic drug can still be used beyond this date in exceptional circumstances.
Several biologic drugs cost tens of thousands of dollars per patient each year. Based on what we have seen in private plan experience, biosimilars can help save up to 50% compared with reference biologic drugs.
In Quebec, private plans must provide coverage that is equal to or better than the RGAM’s. Starting April 12, 2022, their coverage of reference biologic drugs will become less restrictive than the RGAM’s. This means that private insurers will not be required to replicate this public initiative. However, it will now be possible for plan sponsors to implement policies similar to the RGAM’s, as is the case with mandatory generic substitutions for chemical compounds, which is the new standard for private plans.
However, several insurers have confidential price listing agreements with reference biologic drug manufacturers. These agreements allow insured members to obtain reference biologic drugs at very competitive prices that are comparable to their biosimilar equivalents. This practice could encourage some insurers not to implement a transition program similar to the one that will apply to people covered by the RGAM. Major shifts in the negotiation of these agreements can be expected in the coming months.
This confidential price listing agreement strategy could give rise to the following issues:
- A member is covered by a private plan that reimburses the reference biologic drug. Following the loss of their eligibility in their employer-sponsored prescription drug plan, they must enrol in the RGAM’s coverage, under which the reference biologic drug is no longer eligible for reimbursement.
- A member is covered by a private plan that reimburses the reference biologic drug. Once they reach 65, they must enrol in the RGAM’s coverage, under which the reference biologic drug is no longer eligible for reimbursement.
- A plan sponsor has their plan underwritten by insurer X, who allows for the coverage of reference biologic drugs. Following a request for proposals, the plan will then be underwritten by insurer Y, who replicates the RGAM’s program without flexibility or possibility to negotiate, thereby not allowing reference biologic drugs to be covered.
In the previous examples, a change in prescription by the physician would be required so that the patient can be adequately reimbursed and avoid any adverse financial consequences.
These elements must be clarified with various market stakeholders by the end of the transition period. Contractual modifications are to be expected, which would require discussions between employers and union representatives. Furthermore, private plan sponsors must provide communications to make members aware and put their minds at ease.
Given the experience in other Canadian provinces, a six-month period is sufficient to carry out the transition. Insurers will need a few more weeks to determine their positioning. They could announce more official transition programs in the fall in anticipation of a simultaneous implementation with the RGAM’s program on April 12, 2022.
In addition to providing substantial savings, these policies will help bring other biosimilars to the Canadian market. Quebec is joining British Columbia, Alberta and New Brunswick in this pro-biosimilar movement. Other provinces, such as Ontario and Nova Scotia, where serious discussions are underway, could also announce the implementation of such programs in the coming months.
Would you like more information? Contact your Normandin Beaudry consultant or email us.