Data Trends and National Benchmarks Retrospective 2018
Shawn O’Brien Principal – TELUS Health
#HealthBenefitsTrends Content outline I. Terminology and background II. Key results III. Drug type utilization IV.Specialty drug analysis V. Therapeutic category rankings VI.Plan design trends
#HealthBenefitsTrends 2 Terminology and definitions Terminology and background
. Insured: any covered dual i.e. employee, spouse or child
. Certificate: the employee and the linked dependants
. Average age: average age of the insureds or the employees depending of the context
. Utilization: number of claims paid per certificate or insured depending of the context
. Eligible cost: the cost of the drug found eligible by TELUS Health. This measure does not take into account any deductible or co-insurance
. Adjudicated amount: the amount the plan paid for the claim after any cost sharing
#HealthBenefitsTrends 4 Terminology and background
Comparison with a specific group
. Results reflect the entire TELUS Health book of business (BoB)
. Results may differ significantly from plan to plan
. The following elements have an important impact on the costs:
– Plan coverage
– Demographics: . Age distribution . Gender distribution . Number of dependants – Provincial distribution
– Industry
#HealthBenefitsTrends 5 Terminology and background
Comparison with a specific group (cont.)
For renewal, the factors used by carriers are based on many other elements: . Group experience . The entire medical claim not only drugs (including hospital, paramedical, out-of-country, etc.) . Higher volatility for a specific group compared to TELUS Health BoB . Ageing of insured population . Changes in insurers manual rate . Renewal is a prospective exercise, our analysis is retrospective
#HealthBenefitsTrends 6 Terminology and background
. Single-source brand – drug for which no generic exists
. Multi-source brand – one or more generics exist
. Generic – bioequivalent drug that is a copy of the innovator molecule
#HealthBenefitsTrends 7 Terminology and background
Except if otherwise mentioned, data in this presentation is based on: . Insured aged less than 65 − Additional comparisons excluding OHIP+ ages (24 and younger) considering that OHIP+ is primary payer until April 2019 . Costs are eligible costs, i.e. before deductible and co-payment . Regional comparisons are made where applicable
#HealthBenefitsTrends 8 Terminology and background
TELUS Book of Business – Change in number of certificates 2017-2018
Ontario Outside Ontario Canada
2018 Trend 2018 Trend 2018 Trend
TELUS Book of Business – 2,036,600 5.3% 2,889,900 7.2% 4,726,500 6.4% All ages
#HealthBenefitsTrends 9 Terminology and background
Growth in purchases by community pharmacies in Canada
18.0%
16.0%
14.0%
12.0% Loss of exclusivity 10.0% Legislated generic prices 8.0% Vioxx Celebrex 6.0% Remicade Enbrel 4.0% 2.0% 3.0% 0.0%
-2.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source : IQVIA, Study on pharmacy and hospital buying habits in Canada
#HealthBenefitsTrends 10 Key results Key results by region – insureds age 25-64 2018
Canada West Ontario Quebec Atlantic
Eligible monthly cost per insured $51.42 $39.43 $53.31 $68.52 $64.06
Eligible monthly cost per claim $72.65 $68.66 $82.76 $58.57 $81.52
Quantité moy. / Rx 59 67 60 42 80
Monthly utilization per insured 0.71 0.57 0.64 1.17 0.79
% generic (# of Rx) * 63% 65% 60% 62% 69%
Cardholder average age 44.1 43.3 44.5 44.4 45.3
* Age 0-64 ans
#HealthBenefitsTrends 12 Change in eligible monthly costs per insureds 2017 to 2018
6%
4% 3.1 %
2% 0.3 % 0%
-2% -0.8 % -2.4 % -4%
-6%
-8% -6.6 %
Canada West Ontario Quebec Atlantic
#HealthBenefitsTrends 13 Change in eligible monthly costs – insureds age 25-64 2017 to 2018
4% 3.1% 3.2%
2%
0.3% 0.3% 0% -0.4% -0.5% -2.4% -1.0% -2% -6.6% -0.8% Canada West Ontario Quebec Atlantic
Average age of certificate
2018 44.1 43.3 44.5 44.4 45.3 2017 44.1 43.3 44.4 44.4 45.3
#HealthBenefitsTrends 14 Change in eligible monthly costs per claim – insureds age 25-64 2017 to 2018
3%
2.1%
1% 0.4% 0.5% 0.4%
Canada West Ontario Quebec Atlantic -0.2%
-1%
#HealthBenefitsTrends 15 Change in monthly utilization – insureds age 25-64 2017 to 2018
2% 1.1%
0% -0.2% -0.2% -1.0% -1.4% -2%
Canada West Ontario Quebec Atlantic Average age of certificate
2018 44.1 43.3 44.5 44.4 45.3
2017 44.1 43.3 44.4 44.4 45.3
#HealthBenefitsTrends 16 Monthly cost variation per insureds by age band Ontario 2017 to 2018
0% -1.0% -0.4% -0.4% -0.8% -1.3% -10%
-20%
-30%
-40%
-50%
< 10 10-19 20-29 -60% -54.4% <25 25-29 30-39 40-49 50-59 60-64
#HealthBenefitsTrends 17 Drug type utilization Generic utilization Per region – as % of Rx
70% ROC 60% - 69%
60% 59% 57% 59% 60% 56% 57%
50%
40% 2013 2014 2015 2016 2017 2018
Québec Ontario West Atlantic
#HealthBenefitsTrends 19 Multi-source brand utilization Per region – as % of Rx
18%
16%
14%
12%
10% 9% 9% 8% 8% 8% 7% 7% 7%
6%
4%
2%
0% 2012 2013 2014 2015 2016 2017 2018
Québec West Ontario Atlantic
#HealthBenefitsTrends 20 Utilization percentage by type of drug Ontario – # Rx
70%
59% 59% 60% 60% 56% 57% 57%
50%
40% 35% 34% 35% 34% 34% 33% 30%
20%
9% 9% 10% 8% 7% 7% 7%
0% 2013 2014 2015 2016 2017 2018 Generic Single-Source Brand Multi-Source Brand
#HealthBenefitsTrends 21 Paid percentage by type of drug Ontario – eligible amount
80% 70% 70% 71% 71% 70% 68% 68%
60%
50%
40%
30% 24% 24% 24% 24% 24% 23% 20%
8% 8% 10% 7% 6% 5% 5%
0% 2013 2014 2015 2016 2017 2018 Generic Single-Source Brand Multi-Source Brand
#HealthBenefitsTrends 22 Specialty drugs Specialty drug definition
A TELUS Health specialty drug is a drug that has a high cost based on a potential per patient amount exceeding $10,000 per year Further characteristics of these drugs may include but are not limited to: . Requires special medication delivery (e.g. special handling, preparation, administration, storage, or distribution) . Requires complex treatment maintenance (e.g. complex disease, complex dosing, intensive monitoring & clinical management etc.)
#HealthBenefitsTrends 24 Specialty drugs Canada – less than 65
29% # claimants % of total cost 27% 28% 26% 25% 24% 22% 19% 20% 18%
16% 15% 14% 12% 12% 11%
8%
4% 0.5% 0.5% 0.6% 0.6% 0.6% 0.7% 0.8% 0.9% 0.9% 1.0% 1.1% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
#HealthBenefitsTrends 25 Specialty drugs Less than 65
2008 2018 % of total cost
12% ATLANTIC 36%
11% QUÉBEC 32%
11% ONTARIO 30%
9% BC/SASK./MAN. 23%
5% 10% 15% 20% 25% 30% 35%
#HealthBenefitsTrends 26 Rising cost of specialty drugs
Drug Cost
1996 Betaseron $17,000
#HealthBenefitsTrends 27 Rising cost of specialty drugs
Drug Cost
1996 Betaseron $17,000
2018 Strensiq $1,278,000
#HealthBenefitsTrends 28 Specialty drugs Ontario - less than 65 – monthly cost per certificate
. The average cost of drugs increased by 0.3 % per year over 10 years
$120
$100 $90 $93 $80
$60
$40
$20
$0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
#HealthBenefitsTrends 29 Specialty drugs Ontario - less than 65 – monthly cost per certificate
. The average cost of drugs increased by 0.3 % per year over 10 years . The average cost of non specialty drugs decreased by 2.1% per year over 10 years
$120
$100 $90 $93 $80 $80 $65 $60 Non Specialty Total
$40
$20
$0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
#HealthBenefitsTrends 30 Specialty drugs Ontario - less than 65 – monthly cost per certificate
. The average cost of drugs increased by 0.3 % per year over 10 years . The average cost of non specialty drugs decreased by 2.1% per year over 10 years . The average cost of specialty drugs increased by 10.8% per year over 10 years
$120
$100 $90 $93 $80 $80 $65 $60 Specialty Non Specialty Total
$40 $28 $20 $10 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
#HealthBenefitsTrends 31 Specialty drugs Ontario - less than 65 – monthly cost per certificate
. At this pace, the monthly cost per certificate of specialty drugs will surpass the non-specialty drugs within 7 years
$200 $180 $160 $140 Specialty Non Specialty $120 $100 $80 $80 $65 $62 $60 $40 $28 $20$10 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
#HealthBenefitsTrends 32 Specialty drugs Ontario - less than 65 – monthly cost per certificate
. At this pace, the monthly cost per certificate of specialty drugs will surpass the non-specialty drugs within 7 years . and the monthly cost per certificate will have increased by almost 27%
$200 $180 Specialty Non Specialty Total $160 $140 $120 $119 $93 $100 $90 $80 $62 $60 $80 $65 $40 $20 $10 $28 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
#HealthBenefitsTrends 33 Therapeutic category rankings Top 10 drug classes by adjudicated amount
Rank by total adjudicated Percent of total adjudicated Therapeutic class amount amount 2018 2017 2018 2017 Diabetes 1 2 11.7% 10.3%
Rheumatoid Arthritis 2 1 10.9% 11.1%
Skin Disorders 3 3 6.5% 5.6%
Cancer 4 5 6.0% 4.9%
Asthma 5 4 5.4% 5.6%
Depression 6 7 4.3% 4.6%
Blood Pressure 7 6 4.2% 4.7%
Ulcers 8 8 3.7% 3.8%
Cholesterol Disorders 9 9 3.2% 3.4%
Multiple Sclerosis 10 13 3.1% 2.8%
% of total adjudicated amount 58.9% 56.8%
#HealthBenefitsTrends 35 Top 10 products by adjudicated amount
Rank by total adjudicated Percent of total adjudicated Drug name amount amount 2018 2017 2018 2017 Remicade 1 1 3.7% 4.3% Humira 2 2 3.5% 3.4% Insulin 3 3 1.8% 2.0% Stelara 4 7 1.7% 1.3% Enbrel 5 4 1.4% 1.6% Crestor 6 5 1.4% 1.5% Nexium 7 6 1.4% 1.4% Janumet 8 10 1.1% 1.0% Victoza 9 13 0.9% 0.9% Symbicort 10 12 0.9% 0.9% % of total adjudicated amount 17.8% 18.3%
#HealthBenefitsTrends 36 Plan design Generic substitution Ontario – # of insureds
100% 7% 14% 30% 80% 39% 40% 42% 47% 51%
75% 86% 60% 68% 62% 49% 40% 42% 40% 39% 37% 35%
20%
25% 24% 21% 20% 19% 19% 16% 14% 0% 2011 2012 2013 2014 2015 2016 2017 2018 No generic Substitution Generic Substitution - Regular Generic Substitution - Mandatory
#HealthBenefitsTrends 38 Generic substitution Ontario – # of insureds vs # of groups
2018
Insureds Groups
Generic substitution - mandatory 48% 78% 78% 88%
Generic substitution - regular 30% 10%
No generic substitution 22% 15%
#HealthBenefitsTrends 39 Generic substitution Ontario vs Canada – # of insureds
2018
Ontario Canada
Generic substitution (2017) (84%) 87% (84%) 86%
Generic substitution - regular 35% 33%
Generic substitution - mandatory 51% 53%
#HealthBenefitsTrends 40 Coinsurance Ontario – % of certificates – less than 65
45% 2013 2014 2015 2016 2017 2018 40%
35%
30%
25%
20%
15%
10%
5%
0% 100% 90% 80% Other%
#HealthBenefitsTrends 41 Annual maximums Ontario – % of certificates – less than 65
5.0%
2013 2014 2015 2016 2017 2018 4.0%
3.0%
2.0%
1.0%
0.0% 1 - 2,500 2,501 - 5,000 5,001 - 10,000 10,001 - 25,000 25,001 - 50,000 50,001 - 100,000 100,001 - 250,000 250,001 - 500,000
#HealthBenefitsTrends 42 Lifetime maximums Ontario – % of certificates – less than 65
2013 2014 2015 2016 2017 2018 4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0% 1 - 25,000 25,001 - 50,000 50,001 - 100,000 100,001 - 250,000 250,001 - 500,000 500,001 - 750,000
#HealthBenefitsTrends 43 Deductible Ontario – % of certificates – less than 65
2013 2014 2015 2016 2017 2018 Per claim deductible amount 0%
10% 20.0 % 19.0 % 20.0 % 20.0 % 19.0 % 18.0 % $10+ 2018 20% 12.4 % 12.4 % 11.7 % 12.4 % 13.1 % 13.4 % $8-9.99 2013 30%
40% $6-7.99
50% $4-5.99 60% 68.6 % 70.3 % 67.6 % 68.6 % 66.9 % 66.6 % $2-3.99 70%
80% $0.01-1.99
90% 0% 10% 20% 30% 40% 50% 100%
Annual Per Claim None
#HealthBenefitsTrends 44 Dispense fee cap Ontario – % of certificates – less than 65
Percent of total plans Dispensing cap fee range 16.00 + 2018 2013 15 to 15.99 2013
< = 4.99 0.44% 0.60% 14 to 14.99 2018
5 to 5.99 3.25% 3.54% 13 to 13.99 6 to 6.99 1.79% 2.39% 12 to 12.99 7 to 7.99 4.75% 5.56% 11 to 11.99 8 to 8.99 2.99% 3.40% 10 to 10.99 9 to 9.99 1.09% 1.12% 9 to 9.99 10 to 10.99 2.19% 1.95% 8 to 8.99 11 to 11.99 0.24% 0.27% 7 to 7.99 12 to 12.99 0.29% 0.21%
13 to 13.99 0.04% 0.01% 6 to 6.99
14 to 14.99 0.01% 0.00% 5 to 5.99
15 to 15.99 0.91% 1.27% < = 4.99
16.00 + 0.04% 0.03% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Total 18.0% 20.4%
#HealthBenefitsTrends 45 Formulary type Ontario – % of certificates – less than 65
80% 2013 2018 70% 72% 60% 66%
50%
40%
30%
27% 20% 24%
10% 6% 4%
0% Open Managed Provincial
#HealthBenefitsTrends 46 Prior authorization
Impact of prior authorization program
2018
Prior authorization results Percentage of claims* Percentage of adjudicated amount*
Initially rejected 0.13% 2.82%
PA rejects subsequently approved 0.05% 1.26%
Claim avoidance 0.09% 1.56%
*Based on sample of plans that have prior authorization administered by TELUS Health
#HealthBenefitsTrends 47 Summary
. The overall change in plan costs (based on monthly eligible amount per cardholder) saw a marginal increase in Canada of 0.8% year over year. The national 0.8% increase was split equally between increased utilization and increased cost per claim. However, on a region basis there are differences. . Plans that have significant employee distribution in Ontario will have seen a savings from the implementation of OHIP+, yet that will change. . Chronic conditions and high cost treatments of more rare disease dominate the top drug class profile. . Specialty drugs saw the greatest growth in recent years (up 2% to 29%). More than half of the drugs in the pipeline are specialty drugs (the majority to treat cancer and some new biologics that will target larger patient populations i.e. migraine). How will proposed national pharmacare changes help? . Witnessing slow but steady trend towards adoption of plan management features to contain costs as employers try to strike the balance between sustainability and providing a competitive program that employees will value. . Monitor your specific plan risks regularly to ensure you are focusing on the areas that can be optimized the most.
#HealthBenefitsTrends 48
#HealthBenefitsTrends