Express Scripts Canada – 2013 Drug Trends at a Glance

Express Scripts Canada (ESC), one of the largest providers of health benefits management services in Canada, has been reporting on annual drug spending trends since 2002. Each year, they review traditional and specialty trends to make sense of leading indicators and a host of other factors so that private payers can take action to ensure positive outcomes for all stakeholders.

Traditional drugs are defined as drugs used to treat common chronic medical conditions; they are relatively easy to administer and monitor, and are often comparatively lower in cost.  Specialty drugs are those used to treat severe and complex conditions such as cancer, multiple sclerosis and severe-stage rheumatoid arthritis. On average, a specialty drug costs 28 times more than a traditional drug.

ESC’s most recent publication, the 2013 Drug Trend Report, confirmed that the overall drug spend for Canada is once again trending upwards (+1.3%) following a slight decline of 0.73% in 2012.  

The increased use of specialty drugs had a significant impact on overall drug expenditures in 2013 and will continue to be a key driver in the future. Spending on specialty drugs represented only 1.3% of claims but continues to grow as a percentage of total drug spending, steadily increasing from 13.2% in 2007 to 24.2% in 2013. Factors contributing to the increase include the shift to more in-home and outpatient administration, multiple new specialty drug approvals, and the introduction of new specialty drugs.

Simultaneously, traditional drug spend underwent a negative trend of 1.2% in 2013, with increased use offset by a reduced cost per script. The reduction in the cost per script was primarily driven by lower generic prices as a result of provincial price reforms and the availability of generic options. In addition, increased use of plan controls, such as mandatory generic substitution plans, helped decrease the cost per script.  

Additional key findings from the study include the following:

•    Up to $1 of every $3 spent on drug benefits is wasted due to poor patient decisions. Patients continue to use more expensive medications when less expensive alternatives will provide similar health benefits. Patients also use expensive distribution channels, use less than optimal dispensing intervals and often fail to take prescription medication as prescribed. 

•    Traditional prescription drug benefit management tools are limited in their ability to help patients make better decisions, which has resulted in unnecessarily high costs and a cost shift from employer to employees. New strategies that leverage behavioural science are proven to influence patients to make better decisions, which in turn, lowers costs and improves health outcomes.

Stay tuned for our September edition of Spotlight on Benefits where we will expand on the topic of drug spend waste and how recapturing that waste is the key to keeping prescription drug coverage affordable for plan sponsors, while optimizing employee health outcomes, productivity and competitiveness.