Private Drug Plans in Canada:
High-Cost Drugs and Beneficiaries, 2005 to 2017

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A. High-cost beneficiaries

A1. High-cost beneficiaries increased more than fourfold since 2005

Private drug plans have experienced a marked rise in the number of beneficiaries with annual drug costs greater than $10,000. For an average private drug plan of 100,000 active beneficiaries, the number of high-cost beneficiaries increased from 263 in 2005 to 785 in 2017, with the greatest rate of increase for those with annual drug costs over $20,000. By 2017, high-cost beneficiaries accounted for over one quarter of all private plan drug costs.

A2. Patients are paying a higher share of their expenditures

An average high-cost beneficiary paid $1,427 towards their drug expenditure in 2017, up from $817 in 2005. This is due to both an increase in average drug costs and changes in the cost sharing structures of the plans. The average beneficiary-paid share of expenditures, which includes deductibles, copayments, co-insurances and/or maximums, has increased across all cost bands.

Although high-cost beneficiaries pay for a smaller percentage of their drug costs, they pay more in absolute terms. For example, in 2017, beneficiaries with less than $5,000 in annual costs paid 15% or $68 on average, while beneficiaries with over $50,000 in costs paid 5%, but averaged $3,986 in actual dollar amounts.

A3. High-cost drugs account for 78% of expenditures for high-cost beneficiaries

A beneficiary may reach cost levels of over $10,000 in any given year either because they use high-cost drugs or multiple lower-cost drugs. In 2005, high-cost beneficiaries were a more balanced blend of these two groups, as half their expenditures were for more commonly used drugs, such as statins, antidepressants, drugs for acid-related disorders, antihypertensives, etc. The balance has progressively shifted, resulting in a 20% – 80% split by 2017. This trend is due to both generic drug entries and price reductions, which have lowered prices for more commonly used drugs, as well as a steady increase in the number, use and expenditure of high-cost drugs.

B. High-cost drugs

B1. High-cost drugs represented over 25% of private drug plan costs in 2017

In 2005, there were 23 drugs reimbursed by private plans with an annual average cost per active beneficiary of $10,000 or more, representing approximately 6% of the total private drug plan costs. By 2017, the number of drugs surpassing this threshold grew seven times to 163, representing over one-quarter of the private drug plan costs. While drugs costing over $20,000 per year were an insignificant proportion of private drug plan costs a decade ago, they now represent over one-tenth of expenditures.

B2. Private drug plans reimbursed 28 drugs costing over 50K in 2017

There has been a sizable increase in the number of high-cost drugs across all cost bands. The number of drugs with an annual cost of more than $50,000, which are generally used to treat rare conditions and impact a small number of patients, has grown from 3 in 2005 to 28 in 2017.

B3. The 10 top-selling high-cost drugs account for 15% of private drug plan costs

Over half (6) of the top-selling high-cost drugs are immunosuppressants, while the rest fall into four other categories: other systemic drugs for obstructive airway diseases; antivirals for systemic use; intestinal antiinflammatory agents; and parasympathomimetics, which are used in the treatment of multiple sclerosis. With the exception of Gilenya, Epclusa and Tecfidera, all of these drugs are biologics. Remicade, which tops the list of high-cost drugs, has one of the highest average costs per active beneficiary in 2017: $28,804.

NPDUIS is a research initiative that operates independently of the regulatory activities of the PMPRB.