Drug Pricing Trends & the Sustainability of Drug Plans
The development and increasing use of expensive new medicines has had a significant impact on benefit plans and will continue to put pressure on the sustainability of employer-sponsored drug benefit plans. According to the PMPRB’s 2019 Annual Report, in 2009 only one of the top-selling patented medicines in Canada had a treatment cost over $1,000 a year. Ten years later, in 2019, seven of the top selling patented medicines had annual treatment costs that exceeded $10,000 a year.
Where Are the Savings to Offset the Costs?
The Pathway to Savings Opportunities
Currently, the most commonly prescribed generic medicines are available at a 90% discount off the price of the brand-name versions. As of 2021 the average price of a brand-name drug had climbed to $121.20, while the average price is only $20.29.
In the United States, more than 90% of all prescriptions are filled using generic medicines. In Canada, only 67.1% of all prescriptions covered by private sector drug plans are filled using generic medicines. If private sector payers bridged the gap and increased the use of generics by as little as 5%, the cumulative savings could be as much as 2-billion dollars every year.
Source: According to research conducted by CGPA among members of the ANGUS REID FORUM. 2020