Shifting to biosimilar drugs could save $1B annually, says the OECD

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In 2019, the BC PharmaCare program implemented the first phase of its progressive Biosimilars Initiative, becoming the first jurisdiction in North America to transition patients prescribed three biologic drugs used to treat diabetes, certain types of arthritis, and psoriasis to biosimilars. 

These three biologics cost the Ministry of Health $125 million in 2018. In contrast, the biosimilars of these “originator” drugs cost between 25% and 50% less, while offering patients similar levels of safety and effectiveness. Since then, another biologic has been transitioned to its biosimilar, and more is expected in the coming years. 

The Ministry projects savings of $100 million over a period of three years as a result of this program—and the savings will only continue to grow.

As COVID-19 continues to exhaust the health care system in our province, cost savings from shifting 22,000 British Columbians from these originator biologics to their biosimilars are a welcome influx of resources, enabling the Ministry to reallocate money towards other pressing health needs. Thus far, it’s been used to benefit an additional 40,000 British Columbians by augmenting nursing supports and adding BC PharmaCare coverage for Jardiance, a diabetes medication.

Biologics are drugs that are injected for treatment; biosimilars are the second generation of the same drug, and equally effective. Canadians are high users of biologics, so there are significant gains to be had by increasing the uptake of biosimilars; the OECD estimates potential savings of over $1 billion per year can be realized.

As the first health insurance provider in BC to align their drug policies with the Biosimilars Initiative, Pacific Blue Cross plan sponsors and members are experiencing similar cost avoidance—to the tune of $27 million in 2020.

Managing drug costs are critically important 

Health Insurance providers have been examining different biologic vs. biosimilar  strategies, but the early move to align with the BC PharmaCare initiative ensures that Pacific Blue Cross is taking a leadership role in managing the long-term sustainability of their employee benefit plans.

“Plan sponsors are increasingly worried that escalating drug costs—and the rising use of biologics in particular—shifts too much of their overall plan expenditures toward a smaller number of plan members,” says John Crawford, President and CEO of Pacific Blue Cross. “This makes it more financially difficult to ensure the plan can meet the health care needs of its remaining members, and it could lead to coverage reductions or the inability to add new benefits, such as virtual care or mental health programs, to the plan in the future.”

Data from IQVIA, a world leader in health data analytics, has validated the successful drug stewardship achieved by Pacific Blue Cross, who calculated their cost per claim for BC specialty drugs is one third of other private drug plans in the province: $997.99 versus $2,914.82. Further, this number has consistently decreased since 2015 (dropping by over $500), while the industry cost per claim plateaued from 2016-2018, and then started to rise. 

Stewardship for member health

But helping plan sponsors is not the only objective for Pacific Blue Cross, whose mission is to improve the health and wellbeing of their members across the province.

Because many employee health plans have a lifetime coverage maximum, members on a more expensive biologic to treat a chronic condition, like diabetes or rheumatoid arthritis, will reach these limits much more quickly. Shifting them to a less expensive—but equally effective—drug ensures their private coverage lasts longer, which helps them better manage their health care needs.

Pacific Blue Cross is also the first insurance provider to automate the special authority process. “By linking our system directly with BC PharmaCare, we immediately know when a drug has been approved for coverage,” says Anar Dossa, Director, Pharmacy Services for Pacific Blue Cross. “This ensures our members get the medicines they need as quickly as possible, and reduces the administrative burden for patients, prescribers, and pharmacists.”

Positive results

Pacific Blue Cross reports that 99% of their plan sponsors adopted the Biosimilars Initiative. ““The Ministry of Health has been tracking health outcomes of the people who have transitioned to the biosimilar, and there are no alarming signals or trends to indicate issues with transitioning to biosimilars.” adds Dossa. “This corresponds to evidence-based research in Canada and around the world that confirms the safety and efficacy of these drugs.”

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