Drug give and take

It’s a case of one step forward and two steps back in the battle against drug costs.

The Lord giveth, but the Lord taketh away. Or maybe in this case drug companies giveth but drug companies taketh away.

Sponsors are seeing savings thanks to the patent cliff, with over 250 drugs off or about to come off protection. But at the same time high-cost biologic drugs are wreaking havoc on plans.

“Drug costs in general aren’t increasing but the percentage of those drug costs relative to these biologic drugs is increasing dramatically,” said Wayne Farrow. “Short term it’s not having a huge impact. It’s kind of negating the cost savings that we’re seeing, because drugs have come off patent protection or are still to come off protection for a five year period. We’re probably three years into that five year period.”

For example, in Ontario, Crestor is a drug that came off patent protection about a year and a half ago. The name brand drug costs $290 for a 90 day supply; the generic is $40. “The cost of those and maintenance drugs like that have dropped dramatically for those prescriptions,” said Farrow.

But if an employer has an employee that needs a biologic drug that can run up to $100,000 it could be disastrous. “If you’re unlucky as an employer and you have someone in your plan, or someone’s spouse has a condition that requires these drugs then it’s going to have an impact on your overall plan.”

The new biologics that are coming out are different from the chemical compound drugs of the past. “They all work for an individual because they can give someone their life back and get them back to work and be productive,” he said. “But it is having an impact on the cost of providing health care benefits from that perspective.”