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%