Drug Trends Report
With unique insights from 34 million claims and valuable commentary, our 2024 report is an indispensable guide to help you maximize plan value and improve health outcomes for members.
Drug utilization
Since 2019, the total drug costs adjudicated by GreenShield have risen from about $1.55 billion to $2.46 billion in 2023. At the same time, the number of claimants has increased from 2.0 million to 2.5 million.
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Total drug costs continue to show double-digit growth, year-over-year. Largely driven by claimant growth, the cost per claimant in 2023 was $971, a 1.9 percent increase from 2022. This trend is expected to continue in the coming years with the launch of new, innovative drug therapies.
In 2023, 53.6 per cent of the total drug cost was associated with the top 5 per cent of claimants, and 30.8 per cent was associated with the top 1 per cent of claimants. The high-cost claimants not only made up most of the total drug cost, but a large percentage of them also stayed high-cost claimants for three or more consecutive years.
The most prevalent condition continues to be infection with approximately 1.08 million individuals claiming medications for this condition in 2023. This represents 42.5 per cent of the GreenShield claimants who used medications to treat an infection in 2023 although it only made up 3.1 per cent of the total drug cost. Conversely, diabetes and ADHD continue to grow not only in prevalence, but they also accounted for a notable larger portion of total drug costs in 2023 compared to 2019.
Specialty drugs
Biosimilars present comparable safety and efficacy to their originator products but at a significantly lower cost. The total drug cost for biosimilars reached $122 million in 2023, up 38 per cent (or $33.7 million) from the previous year. In contrast, spending on biologic originators (the biologics where a biosimilar was available) declined by 32 per cent (or $32.9 million) in 2023.
As a result of GreenShield’s comprehensive biosimilar strategies, biosimilars continued to gain momentum throughout 2023 and for the first time, the expenditures on biosimilars exceeded that of their originator counterparts.
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The number of claimants with specialty products rose by 14.2 per cent in 2023 while their specialty products expenditure only increased by 10.4 per cent year-over-year. This increase in specialty expenditures was higher than the 2.3 per cent growth seen in 2022, but it remained lower than the 11.3 per cent increase in non-specialty product expenditures in 2023.
Medications used for RA/Crohn’s/colitis/psoriasis made up 48 per cent of total specialty products in 2023. Although their share in the specialty products market showed a declining trend during the reporting period, their spending conversely increased by a significant 9.1 per cent to $336.8 million. Medications for rheumatoid arthritis, Crohn’s disease, colitis, and psoriasis made up nearly half of all specialty products prescribed in 2023. This increase was primarily due to the demand for risankizumab (Skyrizi), upadacitinib (Rinvoq), vedolizumab (Entyvio), and ustekinumab (Stelara).
Non-
specialty drugs
Total non-specialty drug cost reached $1.77 billion in 2023, up 11.3 per cent year-over-year due to the 8.8 per cent year-over-year increase in the total number of non-specialty claimants.
The growing utilization of biologic drugs to treat specific therapeutic categories such as asthma, migraine, and diabetes that have typically been treated with traditional small-molecule drugs is driving unprecedented growth in spending. This will require closer management of not only the appropriateness of drug therapy but also overall disease management.
Drug spending for claimants with an annual treatment cost between $1,000 and $1,999 grew by 30.3 per cent; this was also the fastest annual growth rate across all cost intervals, including specialty products.
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Diabetes medications were the primary driver in this cohort and were responsible for nearly 80 per cent of the total drug cost growth in 2023. This increase was attributed to higher semaglutide (Ozempic) expenditures which rose 60 per cent year-over-year. Weight control was the other stand-out category within this cost interval, reporting a 44.9 per cent total drug cost growth.
Emerging drug trends
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Diabetes: new medications pushing costs
The increasing incidence of diabetes among Canadians, coupled with the introduction of new medications to treat this condition, continues to result in cost pressures. Between 2019 and 2023, the total number of diabetes claimants increased by 10.3 per cent, outpacing the 6.6 per cent growth in total claimants across all therapies.
Diabetes spend was dominated by GLP-1 agonists (e.g. Ozempic, Rybelsus), accounting for 46.2 per cent of the total diabetes drug cost in 2023. By 2023, 29 per cent of people with diabetes were using these products, compared to 10 per cent in 2019 and 23 per cent in 2022.
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Obesity and weight loss medications: a shifting perspective
In 2022, nearly one third of Canadians aged 18 years or older were classified as obese, a significant rise from just one fifth in 2003. While weight loss medications still represent a small fraction of drug expenditures, their costs grew by 170 per cent between 2019 and 2023. This dramatic increase signals not just the growing acceptance of medical interventions for obesity but also the impact these treatments will have on future costs.
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Managed formularies: an opportunity to manage non-specialty drug spend
Managed formularies experienced an 8.2 per cent lower cost per claim than open formulary plans. This is evidence of the effectiveness of this plan design in managing overall expenditure on these non-specialty categories of drugs. Drug plans with a managed formulary had a lower cost per claim across several chronic conditions, including diabetes, anxiety/depression, ADHD, hypertension, and acid related gastrointestinal conditions.
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Prior authorization: increasing in volume
As the pharmaceutical industry pipeline has increasingly shifted to development of high-cost specialty therapies, this has resulted in a growing number of products designated as requiring prior authorization on formularies. Overall, there has been a consistent increase in the number of products requiring prior authorization, along with a corresponding rise in total costs, claims, and claimants over the five-year period.
Many of the top products that have a prior authorization designation are high-cost specialty products that treat conditions such as inflammatory diseases and cystic fibrosis.
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Pharmacists’ prescribing: improving timeliness of treatment
In the recent five years, Canada saw an expansion in the scope of practice for pharmacists along with public funding to provide care for some conditions across Canada. Their accessibility in the community setting has the potential to reduce barriers to care.