The era of the $250,000 drug is here—and payers are worried

A decade ago, a medication that cost a person $10,000 per year might have triggered alarm bells inside an insurance company. But today? That figure barely registers, said Anar Dossa, vice president of pharmacy services at Burnaby-based insurance company Pacific Blue Cross, speaking at a payer-focused panel this past weekend during BCPhA’s annual conference. Last Friday’s session brought together representatives from Pacific Blue Cross, Sun Life Health and the B.C. Ministry of Health to discuss the mounting cost pressures facing public and private drug plans, and what those pressures mean for pharmacists.With specialty drugs now accounting for roughly one-third of private drug plan spending in Canada—despite being used by only about 2% of claimants, according to a recent report from TELUS Health—much of the discussion focused on how insurers, employers and governments are trying to adapt to the rising cost of care.Dossa said insurers are increasingly dealing with medications costing well over $100,000 per patient annually, with some therapies now exceeding $250,000.“We now have drugs that are costing hundreds of dollars per day—and that’s just not sustainable,” said Dossa. Newer obesity medications in particular are beginning to reshape workplace benefit plans across Canada, said Erin Crump, vice president of market development at Sun Life Health. According to her, employers are becoming far more interested in covering GLP-1 medications, as obesity is increasingly viewed as a serious chronic condition, rather than simply a lifestyle issue.But she warned of how the popularity of the medications could present major sustainability concerns, because of how many people may ultimately seek access.Referring to private plans, “1% of claimants account for about 30% of all drug costs nationally,” Crump said. Both Dossa and Crump described prior authorization systems as an increasingly necessary tool for controlling costs and directing expensive medications toward patients most likely to benefit.“What we are now seeing is because employers get hit with a million-dollar drug or a $250,000 drug, what that means upon renewal is, they are now putting in annual maximums or lifetime maximums,” Dossa said.She argued that more targeted and evidence-based drug use could help avoid some of those restrictions, framing pharmacists as key partners in improving what insurers now call the “appropriate use” of medications—whether through biosimilar transitions, formulary navigation or chronic disease management.She pointed to British Columbia’s Biosimilars Initiative as an example: Pacific Blue Cross eventually transitioned all of its plan sponsors to biosimilars, a move Dossa said saved “hundreds of millions of dollars.”When the conversation moved beyond drugs themselves and toward prevention, Dossa added that diabetes remains one of the largest spending categories for insurers. She argued the healthcare system needs to spend more time preventing chronic disease earlier, before patients require expensive late-stage treatments.“We want to make sure everybody's living longer, healthier lives—and by educating people on how to use these medications appropriately, you're playing a big role,” she said, speaking directly to attendees. From the public payer side of things, John Capelli, executive director of the PharmaCare Policy and Health Technology Assessment Branch at the B.C. Ministry of Health, said the province is facing many of the same pressures. “There’s an aging population using more drugs, so this is going to put pressure on the PharmaCare budget . . . and that’s borne out in the data,” said Capelli. “There are more claims being accepted by PharmaCare.” Capelli said nonetheless British Columbia was strongly supportive of the federal initiative, with Dossa praising the province for quickly signing onto the agreement. But Crump cautioned against shifting too much responsibility away from employer-sponsored plans, which currently contribute roughly $16 billion annually toward drug coverage in Canada.“Our view is . . . not to lose that significant investment that employers have made,” Crump said.

The era of the $250,000 drug is here—and payers are worried

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