In the health benefit sector, prescription medications are usually divided into two primary categories, traditional and specialty.
What is the difference between a traditional and a specialty prescription drug?
Traditional drugs are those with which most people tend to be familiar, like high blood pressure medications, birth control pills and anti-depressants. While they collectively add up to billions of dollars in spending each year, the individual treatment cost of traditional drugs is usually moderate.
Specialty drugs are a whole different class of medication – if you’re familiar with a specialty medication, it is probably because you are a health professional or you or someone you love has a serious, chronic, complex health condition. These drugs treat more serious diseases, such as severe rheumatoid arthritis, multiple sclerosis (MS) and cancer.
Good news and bad news about specialty drugs
The good news is that there have been tremendous advances in the treatment of many of these diseases. In some cases, a diagnosis that was once devastating is now much more manageable with the right specialty medication.
But these advances have also meant that total spending on specialty medications more than doubled between 2007 and 2016. These medications tend to be much more expensive than traditional medications, and in order to benefit, patients being treated for chronic, complex health conditions also may require extensive diagnostic procedures as well as ongoing regular clinical guidance to optimize their dosage, manage side effects and avoid interactions with other drugs, supplements or food. Special handling and storage may also be required.
New hepatitis C drugs provide a valuable illustration of the astonishing potential of specialty drugs – and their sometimes astronomical costs.
Some background: Until recently, a hepatitis C diagnosis meant a long, arduous path to an untimely death. The prognosis was chronic, worsening health problems that included liver damage, liver failure and liver cancer. Around the world, almost 400,000 people die each year from its effects.
But today there is hope.
Before the introduction of new direct-acting antivirals (DAAs) in 2014, the only treatments available had disabling side effects and low cure rates. In fact, some researchers asked if the treatment was “worse than the disease.” With DAAs, shorter treatments and fewer adverse reactions mean more people complete their treatment and are cured. But the cost is high, between $45,000 and $100,000 for each patient.
As a result, employer-sponsored plan spending for this category increased by 232% between 2014 and 2015. By 2016, however, many of Canada’s more than 250,000 hepatitis C sufferers had been treated and cured, and spending dropped by 63%. (Page 37, Express Scripts Canada 2016 Drug Trend Report)
But this is just one example of the specialty drug trends underway. The cost of specialty drugs has grown from 13% of total private plan spending in 2007 to 30% in 2016. More and more of these drugs are in development and on their way into the market, and as more Canadians start using them, employer drug plans will be severely challenged to manage the added costs.
However, there is a solution to help control costs.
Comprehensively managed prescription drug plans can provide the essential support that plan members need to benefit from these high-cost treatments while managing long-term plan costs.
By aligning treatments with clinical guidelines, empowering patients at critical decision points and providing comprehensive care, these plans support the best possible health outcomes at the lowest possible cost. Plan members with chronic, complex diseases can access the specialty drugs they need, and plan sponsors can ensure the benefit plan is cost-effective and sustainable.
Interested in learning more about comprehensively managed prescription drug plans and how they can help reduce plan spending costs? Speak with us today! Or, want to learn more about us and what we do? See our member FAQs for more information.