January 2021
The Top 10 Developments in Drug Insurance of 2020
The milestone event of 2020 is undoubtedly the scientific research that led to the arrival of a COVID-19 vaccine in less than a year. Apart from this highlight, here is the 6th edition of our top drug developments.
EVOLUTION OF PUBLIC PLANS
1. Shift towards a biosimilars market
2. National pharmacare
3. Adoption of Bill 31
IMPACT OF COVID-19
4. Temporary measures for pharmacists
5. Effects on mental health
MOVEMENT IN THE INDUSTRY
6. Reform of the Patented Medicine Prices Review Board (PMPRB)
7. New agreement between the AQPP, the CLHIA and third-party payers
MOVEMENT AMONG INSURERS
8. New claims processing service providers
9. Price listing agreements with pharmaceutical companies
MISCELLANEOUS
Public plans are constantly changing both at the provincial and federal levels.
In recent years, certain provincial governments have taken a position on the choice of biologics and their biosimilars. British Columbia completed its transition to biosimilars in 2020 while Alberta is in the midst of its transition. Several provinces, including Quebec and Ontario, are working on a policy that promotes biosimilars. Furthermore, Ontario confirmed its vision in its last budget. For its part, the RAMQ stopped reimbursing REMICADE™ in favour of its biosimilar INFLECTRA™.
The Canadian Agency for Drugs and Technologies in Health (CADTH) also supports this vision by proposing several solutions to promote the use of biosimilars.
We will monitor the evolution of the biosimilars market over the coming months.
The national pharmacare proposed by the federal government made headlines several times in 2020. In the latest news, the plan will include the creation of a national agency charged with developing a national list of prescription drugs and negotiate their prices. It will also include a strategy for costly prescription drugs used to treat rare illnesses and $500 million in funding per year, up to a maximum of $1 billion over two years, starting in 2022.
In 2020, Health Canada began the initial phase by proposing several options of this strategy to the provinces and territories.
During its Throne Speech, the government confirmed its intention to proceed with national pharmacare. Further developments can be expected in the coming months.
For more information on Normandin Beaudry’s position on national pharmacare, reread our white paper.
Bill 31 came into effect on March 18, 2020, in Quebec. Pharmacists and patients had to wait for the supporting regulation published in December of the same year. In it, the reimbursement of pharmacist services was clarified. The most noteworthy elements remain the sharing of reimbursements between the Régime général d’assurance médicaments (RGAM) and the Régie de l’assurance maladie du Québec (RAMQ) and the elimination of policyholder contributions for these services. As such, some pharmacist services will be directly funded by the RAMQ while those covered by the RGAM must be reimbursed in full by private group benefits plans.
The passage of this bill will result in a modest transfer of costs from private plans to the public plan and eliminate obstacles to the use of pharmacists on the front lines in Quebec’s healthcare system.
Read our January 2021 bulletin for more information.
COVID-19 will continue to hit hard this year and the prescription drug insurance industry is already feeling the impact.
Emergency and temporary measures have been deployed to adapt to the pandemic. Various provinces have authorized pharmacists to perform additional services. For example, in British Columbia, pharmacists can accept verbal prescriptions and, in New Brunswick, pharmacists can transfer a prescription. In addition to accelerating the implementation of permanent changes, the pandemic has helped demonstrate that pharmacists can be used more on the front lines.
In March, the fear of prescription drug shortages forced the imposition of 30-day dispensing. As a result, prescriptions of more than 30 days were suspended for a few weeks in all provinces.
COVID-19 will have an impact on the number of prescriptions for mental health treatments, such as antidepressants. According to the RAMQ’s preliminary data, the number of people taking therapeutic class prescription drugs increased 7% compared to 2019, approximately double the increase seen the previous year . It would not be surprising if the other provinces had similar results.
What will the impact be on private group benefits plans? According to Normandin Beaudry’s databases, prescription drugs used to treat mental health conditions make up approximately 15% of claims. A 7% increase like the one shown by the RAMQ could result in an increase in health insurance rates of up to 1%. This does not take into consideration the other effects of the pandemic on disability and the potential deterioration of Canadians’ physical health. The effects of these premium renewals will have to be monitored in 2021.
The Patented Medicine Prices Review Board (PMPRB) is a body that monitors the pricing of prescription drugs sold in Canada. The primary change in its reform is to the list of reference countries used to determine the price of prescription drugs sold in Canada. Currently, the price is based on the median of seven OECD countries. The PMPRB is proposing to increase the number of countries to 11 and to remove the United States and Switzerland from the list because they have the highest prescription drug costs in the world and this could lower their cost in Canada.
The change was supposed to be implemented on July 1, 2020, but pressure from the companies that produce patented medicine and the effects of the pandemic delayed the implementation to July 1, 2021. Pharmaceutical companies allege, among other things, that the Canadian market will become less attractive to launch their new innovative prescription drug therapies.
Will the reform take place? If so, will this reform truly limit access to innovative prescription drugs or is it a negotiation tactic?
The new agreement between the Association québécoise des pharmaciens propriétaires (AQPP), the Canadian Life and Health Insurance Association (CLHIA) and third-party payers (insurers and payment card providers) took effect on February 1, 2020, in Quebec. This is the first major update to occur since the establishment of the RGAM in 1997.
Following this ratification, most insurers were able to provide Quebec policyholders with a tool that allows them to compare prescription drug prices by pharmacy. Quebec policyholders can now use a tool that had been available for years in the other provinces. This tool allows users to compare the services provided by a pharmacist and prescription drug prices with other pharmacies.
This new agreement also opens the door to the implementation of cost control measures and the modulation of pharmacists’ professional fees for 90-day prescriptions. In addition, the agreement provides for the establishment of a committee that will oversee the pricing of costly prescription drugs.
The agreement will increase the transparency of prescription drug prices per pharmacy and, possibly, result in better cost control for plan sponsors.
Read our February 2020 bulletin for more information.
After more than a decade of stability, several insurers have decided to change claims processing service providers. Sun Life Financial has opted for Express Scripts Canada (ESC) while Desjardins and SSQ Insurance are teaming with Telus Health.
Plan sponsors must keep abreast of the situation, because these changes will impact their policyholders who, at a minimum, have to update their insurance file at the pharmacy and who may notice slight changes for certain reimbursements.
New agreements between insurers and pharmaceutical companies are ever more numerous and increasingly complex. Each insurer has their own agreements with pharmaceutical companies, which widens the inequalities between insurers. For example, some insurers have put in place several dozen agreements while other insurers do not have any.
The way in which each insurer applies discounts is also different. The discounts can be applied to the plan experience or directly at the point of sale.
The confidentiality of the agreements mitigates the transparency of actual prescription drug costs and complicates cost management for private plan sponsors. In the long term, these agreements do not foster the market entry and use of biosimilars.
In our white paper, we recommended the end of this practice and to negotiate prescription drug prices for all Canadians for private and public plans.
In recent years, significant technological advances have enabled people with diabetes to better manage the illness. With new devices such as FreeStyle Libre and Dexcom, patients can now monitor their blood sugar in real time. These innovations entail significant costs for private plans, which have seen diabetes-related claims increase 15% in the last year. According to Normandin Beaudry’s database, this increase could be related, in part, to the purchase of continuous glucose monitoring systems.
These costs will represent a major risk for private plans in the years ahead. This is why they must be watched closely.
At the start of this new year, which promises to be just as eventful as the previous one, our experts will keep abreast of the aforementioned initiatives and considerations.
Need personalized support? Contact our experts to fully understand the existing or potential impact of these changes on your prescription drug insurance plans.