in Canadas Public 2017/18 Drug Dr ug Plans Plans Presentation - - PowerPoint PPT Presentation

Presentation to the 2019 CADTH Symposium April 2019 Yvonne Zhang, Economic Analyst NPDUIS, Policy and Economic Analysis Branch Patented Medicine Prices Review Board

2017/18

Unc Uncovering ering the the For

• rces

ces Driving Driving Cos Costs ts in Canada’s Public Dr Drug ug Plans Plans

2

Background and Objectives

• Public drug plan expenditures account for a significant portion of the overall

healthcare budget. Through its annual flagship CompassRx report, the PMPRB monitors and analyzes the evolving pressures driving changes in these expenditures.

• This analysis outlines the preliminary results for the latest fiscal year, tracking

recent trends in prescription drug costs and identifying the key drivers for 2017/18, including:

• changes in the beneficiary population (demographic effect);
• changes in the amount of drugs used (volume effect);
• shifts between lower- and higher-priced drugs (drug-mix effect);
• changes in drug prices (price effect); and
• shifts from brand-name to generic or biosimilar options (substitution effect).

3

Methods and Data Sources

• The analysis focuses on Canadian public drug plans participating in the National

Prescription Drug Utilization Information System (NPDUIS) initiative

• The main data source for this report is the NPDUIS Database at the Canadian

Institute for Health Information (CIHI)

• The drug costs reported here do not reflect rebates resulting from confidential

product listing agreements

• Although based in part on data provided by the Canadian Institute for Health

Information (CIHI), the statements, findings, conclusions, views and opinions expressed in this report are exclusively those of the PMPRB and are not attributable to CIHI

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1 2 3 4

Prescription expenditures grew by a marked 7.4% in 2017/18, building on a three-year average annual increase of 6.6% Drug costs, the largest component of these expenditures, increased by 8.3% in 2017/18 The renewed pressure from DAA drugs along with an increase in other higher-cost medicines collectively accounted for a 7.1% upward push on drug costs in 2017/18 Cost savings from generic and biosimiar substitution and price reductions, which have been declining in recent years, accounted for

• nly a slight reduction in costs in 2017/18

5

Prescription expenditures increased by 7.4% in 2017/18

1

Total prescription drug expenditures 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 $8.8B $9.1B $9.4B $10.5B $10.7B $11.4B

Note: Prescription costs include the drug cost and related markups as well as dispensing cost. Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

0.5% 3.5% 3.8% 10.8% 1.9% 7.4% 0% 2% 4% 6% 8% 10% 12% Annual rate of change in prescription drug expenditures

CAGR 6.6% CAGR 2.6%

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87% Plan Paid Patient Paid 13%

Overview of expenditures in NPDUIS public drug plans, 2017/18

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$10.7B

Public Drug Plan Expenditures $11.4B

6.9 Million Active Beneficiaries 277 Million Prescriptions

80% Drug $9.1B Costs Dispensing 20% Costs $2.3B

1 in 4 covered by a public plan

Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

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A sustained increase in the use of higher-cost drugs, along with a renewed pressure from DAA drug use, drove drugs costs up by 7.1% in 2017/18

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2.7% 2.1% 2.7% 3.0% 1.8% *2.8% 1.7% 2.2% 0.3% 1.2% 1.0% 1.0% 4.1% 5.4% 4.9% 4.1% 4.4% 4.7%

• 2.0%
• 6.0%
• 3.0%
• 1.8%
• 1.0%
• 1.1%
• 7.2%
• 1.5%
• 3.2%
• 2.3%
• 1.8%
• 1.3%

8.0%

• 2.3%

2.4%

• 10%
• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Net Change

• 0.8%

2.0% 2.5% 12.0% 2.0% 8.3% Total Push Effects 8.5% 9.7% 7.9% 16.2% 7.2% 11.0% Total Pull Effects

• 9.2%
• 7.5%
• 6.2%
• 4.1%
• 5.1%
• 2.3%

*The demographic effect captured the 1.5% of drug cost increase attributed to the implementation of the OHIP+ program in Ontario from the last quarter of the 2017/18 fiscal year. CAGR 7.7% CAGR 1.5%

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While the overall growth in costs varied, the increased use of higher- cost drugs was the most important driver for almost all plans

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• 2.4%

1.9%

• 0.7%

0.2% *[VALUE] 2.1% 1.5% 4.9%

• 0.5%

2.0% 1.2% *[VALUE] 3.6% 1.6% 3.3% 1.0% 0.6% 1.8%

• 1.3%

1.0% 1.2% 0.6%

• 3.3%

1.0% 0.9% 4.0% 6.4% 5.2% 5.4% 5.8% 8.0% 3.2% 2.0% 4.2% 4.7% 4.7%

• 1.0%
• 1.9%
• 1.4%
• 0.9%
• 1.0%
• 0.7%
• 0.9%
• 2.4%
• 0.2%
• 0.7%
• 0.7%
• 1.1%
• 0.8%
• 1.2%
• 0.9%
• 1.3%
• 1.5%
• 1.2%
• 0.7%
• 0.9%
• 0.3%
• 1.4%
• 1.2%
• 1.3%

4.3% 1.5% 2.9% 1.3% 2.2%

• 0.03%
• 1.4%
• 1.5%

2.0% 6.6% 2.4%

• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 12% 14%

Amount ($ million) BC AB SK MB ON NB NS PEI NL YT NIHB Total Drug cost 2016/17 $1,075.0 $734.5 $359.2 $336.5 $4,918.1 $192.7 $183.8 $32.4 $117.4 $13.5 $463.0 $8,426.1 2017/18 $1,131.0 $784.1 $392.9 $351.9 $5,396.9 $206.7 $193.9 $33.9 $117.9 $14.4 $501.9 $9,125.5 Absolute change $56.0 $49.6 $33.7 $15.4 $478.8 $14.0 $10.0 $1.5 $0.6 $0.9 $38.9 $699.4 Net Change

5.2% 6.8% 9.4% 4.6% 9.7% 7.2% 5.4% 4.8% 0.5% 6.5% 8.4% 8.3%

Total Push Effects

8.8% 9.0% 12.6% 7.8% 13.1% 9.7% 9.5% 9.1% 3.1% 8.8% 13.0% 11.0%

Total Pull Effects

• 4.2%
• 3.0%
• 3.0%
• 2.2%
• 2.5%
• 1.9%
• 4.2%
• 3.3%
• 2.5%
• 2.0%
• 5.2%
• 2.3

*The introduction of OHIP+ in Ontario, in the last quarter of 2017/18, is captured in the demographic effect, resulting in a 2.5% increase in Ontario and a 1.5% increase overall. Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

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Patented medicines made the greatest contribution to the

• verall increase in drug costs

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Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information. 10.1% 6.8% 19.3% 6.6%

• 0.5%

8.8% 12.9% 5.8% 8.3%

• 5%

0% 5% 10% 15% 20% Non-biologics (excl. DAA drugs) Biologics High cost drugs Single-source non-patented Multi-source generic Patented (excl. DAA drugs) Patented All Drugs (excl. DAA drugs) All Drugs

62.6% 21.0% 3.8% 12.6%

Share of drug cost

Patented Multi-source generic Single-source non-patented Other

DAA drugs for hep C, 8.9% High-cost drugs (excl. DAA drugs), 10.4%

Market Segments Patented Medicines

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The top 10 drugs, which included several high-cost medicines, contributed 3.1% to the 4.7% drug-mix effect

3

Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

• 0.37%

0.16% 0.16% 0.16% 0.20% 0.22% 0.25% 0.31% 0.33% 0.35% 0.93%

Contribution to the drug-mix effect, 2017/18

Average cost per beneficiary* Total number of beneficiaries Drug cost $million (share) Therapeutic class Trade name (molecule) Top 10 drugs contributing to the push effect $8,647 31,345 $271.0 (3.0%) Ophthalmologicals Eylea (aflibercept) $901 125,888 $113.5 (1.3%) Antithrombotic agents Eliquis (apixaban) $66,114 2,362 $156.2 (1.7%) Immunosuppressive agents Revlimid $634 57,679 $36.6 (0.4%) Drugs used in diabetes Jardiance (empagliflozin) $968 127,238 $123.1 (1.4%) Drugs used in diabetes Janumet (sitagliptin, metformin hydrochloride) $9,937 2,624 $26.1 (0.3%) Immunosuppressive agents Xeljanz (tofacitinib) $16,528 17,341 $286.6 (3.2%) Immunosuppressive agents Humira (adalimumab) $604 48,631 $29.4 (0.3%) Anti-asthmatics Breo ellipta (vilanterol, fluticasone furoate) $62,456 851 $53.2 (0.6%) Antineoplastic agents Imbruvica (ibrutinib) $20,228 772 $15.6 (0.2%) Antineoplastic agents Ofev (nintedanib) Top drug contributing to the pull effect $8,645 23,732 $205.2 (2.3%) Ophthalmologicals Lucentis (ranibizumab)

* The average cost per beneficiary may not represent the cost of a complete year of treatment.

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The share of high-cost drugs is on the rise

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8.8% 10.3% 10.6% 10.3% 11.4% 12.1% 5.4% 5.8% 6.7% 7.1% 8.0% 7.3% 1.3% 1.6% 2.0% 2.4% 3.5% 4.0% 7.3% 4.8% 7.1%

0% 5% 10% 15% 20% 25% 30% 35%

Share of total drug cost (%) $50K + DAA drugs $50K+ Other drugs $20K to $50K $10 to $20K Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total no. of molecules 56 63 75 82 86 94 10K to 20K 30 37 38 35 36 40 20K to 50K 17 16 24 28 31 31 50K+ Other drugs 9 10 13 16 16 20 $50K+ DAA drugs 3 3 3 Share of active beneficiaries 1.04% 1.18% 1.28% 1.52% 1.67% 1.66% Share of prescriptions 0.18% 0.20% 0.22% 0.27% 0.29% 0.33%

27.7% 30.4% 27.1% 19.3% 17.7% 15.6%

Drug Cost ($millions) $1,075.7 $1,258.6 $1,408.7 $2,235.7 $2,327.2 $2,776.5

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Biosimilar uptake remains modest

Compared to traditional generic drug markets, the savings from biosimilars are limited by a slower uptake and lower price reductions

4

Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

*Based on Ontario Drug Benefit formulary listing price

Reference biologic Biosimilar

Trade name (molecule) Drug cost $million (% share) Trade name Market approval First reimbursement Price discount* Share of prescriptions Remicade (infliximab) $391.0 (4.3%) Inflectra 15-Jan-14 Q1 2016 46.8% 5.4% Renflexis 01-Dec-17 Q3 2018 50.1% NA Lantus (insulin glargine) $147.2 (1.6%) Basaglar 01-Sep-15 Q3 2017 25.0% 1.0% Neupogen (filgrastim) $16.0 (0.2%) Grastofil 07-Dec-15 Q4 2016 25.0% 72.3% Enbrel (etanercept) $157.6 (1.7%) Brenzys 31-Aug-16 Q3 2017 33.7% 2.4% Erelzi 06-Apr-17 Q4 2017 37.2% <0.1%

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Fewer patients were initiated on infliximab after biosimilar introduction

Instead, new patients started on other originator products in the class

4

21% 21% 23% 22% 25% 25% 27% 25% 26% 22% 18% 15% 5% 9% 10% 12% 23% 23% 22% 6% 5.5% 16% 0% 100% 2011/12 2013/14 2015/16 2017/18 645 702 847 995 780 832 1,026 1,128 797 725 666 674 156 294 364 541 728 757 837 262 252 710 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 2011/12 2013/14 2015/16 2017/18 Xeljanz Inflectra (infliximab) Remicade (infliximab) Rituxan Etanercept Humira Other biologic DMARDs

Distribution of new patients by biologic DMARD Number of new patients on biologic DMARDs

Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

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Generics capture a higher share of use, while patented medicines capture a higher share of costs

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Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

14.0% 14.2% 12.5% 11.5% 10.8% 11.1% 61.5% 61.9% 66.5% 69.1% 70.8% 70.5% 1.1% 1.1% 1.2% 1.9% 1.9% 2.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Other Non-patented single-source Multi-source generic Patented

Share of prescriptions

52.2% 56.6% 56.7% 60.1% 60.1% 62.6% 28.8% 24.9% 25.2% 22.5% 22.8% 21.0% 2.2% 2.3% 2.4% 3.5% 3.9% 3.8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Share of drug costs

National Prescription Drug Utilization Information System

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Patented Medicine Prices Review Board