The Top 10 Developments in Drug Insurance of 2024

A look back at the highlights of 2024 in this tenth edition of our top drug insurance developments of the past year.

CHANGES TO PUBLIC PLANS

1. National pharmacare bill receives royal assent
2. British Columbia: First province to sign an agreement with Ottawa

OTHER GOVERNMENT POLICIES

3. New in Manitoba: Free access to contraceptives and transition to biosimilars
4. The evolving role of pharmacists
5. A look at provincial generic substitution policies

PRESCRIPTION DRUGS

6. Market launch of Wegovy^® for weight loss
7. Health Canada approves Wegovy® for other indications
8. Ozempic®: Outcome and outlook one year after insurers implement measures
9. Cost control
10. Trends: Skin diseases

Monitoring the development of public plans will be important in 2025 during this period of political uncertainty on the federal level.

On October 10, 2024, the Government of Canada passed legislation for the first phase of a national universal pharmacare program. Originally tabled on February 29, 2024, this bill provides universal access to two categories of drugs: contraception and diabetes medications.

It is now possible to estimate the repercussions the national pharmacare program will have on private plans:

• Across Canada, close to 80% of current contraceptive costs could be transferred to the national program. The effect will be more limited for medications for the treatment of diabetes, with just 15% to 20% of costs being transferable to the national program.
• Overall, this could represent a 3% reduction in drug spending for private plans. Given that prescription drugs account for nearly a third of total group insurance plan expenditure, the effect on the premiums of an average private plan would be about 1% should there be a complete transfer of the prescription drugs currently referred to in the bill.

For organizations that offer post-retirement plans, the effect would be more limited because contraceptives are very rarely used in such plans.

British Columbia is the first province to sign an agreement with the federal government enabling it to use the funds available under the Pharmacare Act. The $195 million in funding provided for in the agreement could begin as early as next spring and will help reimburse costs related to diabetes treatment and hormone therapy. Note that in 2023, British Columbia also became the first Canadian province to make prescription contraceptives free of charge for its residents.

As provincial and territorial governments are responsible for health care, similar agreements are expected in other Canadian provinces and territories. Some have already expressed their intention not to take part in the program but to instead use the federal investment to fund their respective programs, as indicated by Alberta and Quebec.

On October 1, 2024, Manitoba became the second Canadian province after British Columbia to make prescription contraceptives free of charge for its residents. These products represent approximately 2% of total drug expenditure for private insurance plans. As a result, this initiative represents an attractive reduction in costs for private insurance plans in the province.

Manitoba’s policy covers a wide range of contraceptives, including most birth control pills, some intrauterine devices (IUDs), contraceptive injections, subdermal implants and emergency contraception (commonly known as the “morning-after pill”).

It is also worth noting that Manitoba began the transition to biosimilar drugs on August 1, 2024, making it one of the last provinces to take this step. As most insurers have already begun the transition to biosimilars in all provinces, this measure should not have much of an impact on private plans.

All Canadian provinces, as well as the Yukon, currently allow pharmacists to prescribe drugs for a number of minor ailments and health conditions. However, some provinces are more permissive than others when it comes to how much leeway they offer pharmacists. One such example is Alberta—the only province that grants pharmacists virtually full authority to prescribe drugs without requiring a prescription from a doctor.

Nonetheless, the role of pharmacists is poised to expand, as was demonstrated in 2024:

• In Quebec: Bill 67, tabled on June 4, 2024, aims to relax certain measures and eliminate some of the current administrative barriers faced by pharmacists, enabling them to extend prescriptions without a time limit.
• In Ontario: The government has proposed adding a dozen illnesses to the list of minor ailments that can be managed by pharmacists. However, this measure has not yet been implemented.

These measures are designed, among other things, to better distribute the workload of healthcare professionals and to take full advantage of the expertise and accessibility of pharmacists.

In public plans, the lowest price clause generally applies, meaning that the plan reimburses the drug that costs the least from among the brand-name and generic versions available. Certain situations may justify “no substitution,” such as an allergy to a non-medicinal ingredient contained in the generic substitute but not in the brand-name drug. Generic substitution policies vary from one Canadian province to another, reflecting different approaches to managing drug costs.

Although Quebec has traditionally been more flexible when it comes to generic substitution, it will be tightening the rules of its public plan, thus moving into closer alignment with measures in other Canadian provinces. As of February 5, 2025, exceptions to generic substitution will be limited to specific cases, such as those involving severe allergies, for certain therapeutic classes. Once these stricter rules have been implemented, insurers are likely to follow suit with private plans in Quebec.

Wegovy^®, a member of the GLP-1 agonist class, hit the market in May 2024. Although mainly prescribed for type 2 diabetes, drugs in this agonist class are also used for weight management. The class includes Victoza^® and Trulicity^®, as well as three drugs derived from the same molecule (semaglutide): Ozempic^®, Rybelsus^® and Wegovy^®.

Given the significant use and marketing of Ozempic^® in recent years (contains the same molecule as Wegovy^®), it is entirely reasonable to anticipate that Wegovy^® will be used widely in plans that cover weight loss. Since its launch, there has already been a greater financial impact on private plans than before in the treatment of this health issue.

Although Canadian public plans do not generally reimburse weight management medications, a number of private plans have started covering these treatments. As a result, insurers have decided to introduce cost control measures, particularly for Wegovy^®. Insurers have been proactive in adding this drug to their list of pharmaceutical products requiring prior authorization. Authorization criteria vary from one insurer to another and may have an influence on whether the drug is covered. Criteria that are more restrictive than the guidelines set by Health Canada also began to emerge in 2024. Authorization criteria are expected to continue to evolve in 2025 due to the increasing use of the drug and its financial impact on plans.

In November 2024, Health Canada approved Wegovy^® to reduce the risk of non-fatal heart attack or myocardial infarction in certain adults. This treatment would help reduce the risk of major cardiovascular events and strokes in overweight or obese adults without diabetes.

Insurers are currently assessing this new indication to determine its potential impact on private plans. At the moment, Wegovy^® coverage is included in plans for the drug’s indication for weight management. However, the new indication could mean that Wegovy^® would even be covered under plans that do not provide coverage for weight loss.

Although some insurers implemented measures concerning Ozempic^® coverage a few years ago, the exponential rise in costs associated with its off-label use for weight loss caused quite a stir in 2023. As a result, in spring 2023, most insurers adopted strategies such as prior authorization and step therapy to ensure appropriate use of the drug in the treatment of type 2 diabetes.

From 2019 to 2022, spending on this drug doubled each year. The majority of insurers introduced their cost management measures around mid-2023. In 2024, the measures implemented the previous year proved to be effective, as spending stabilized or even went down for several organizations. For others, depending on the demographics of the insured individuals, spending has continued to grow but at a slower pace than in previous years.

With the patent expiry date for Ozempic^® fast approaching in Canada, lower-cost versions can be expected as early as 2026, which will help to control costs for both public and private plans.

In 2024, some reference biologic drugs such as Stelara^® and Xgeva^® had their first biosimilar competitors appear on the market. A number of other generics have also been launched. One such example is Vyvanse^TM, one of the drugs most widely used to treat attention deficit hyperactivity disorder (ADHD). These drugs make up nearly 5% of total eligible drug expenses. The new, less expensive versions could generate savings of around 1% to 2% of eligible expenses for private plans.

The industry is looking forward to the next few years, as other biosimilar or less expensive drugs will hit the market, particularly for Entyvio^® (in 2025), Ozempic^® (in 2026) and Soliris^® (in 2027).

In the therapeutic class used to treat skin diseases, costs have risen significantly for group insurance plans in recent years, more than doubling in five years and now representing over 5% of eligible expenses. The rising costs are mainly due to an increased number of claims and the addition of health conditions treated by three drugs: Stelara^®, Skyrizi^® and Dupixent^®. These biologics are used to treat plaque psoriasis, eczema and other inflammatory conditions.

As the patent for Stelara^® is now expired, three new biosimilar versions of the drug appeared in 2024: Jamteki^TM, Wezlana^TM and Steqeyma^®. These new biosimilars will generate overall savings of around 1% of eligible drug expenses for group insurance plans that are requiring the transition to biosimilar drugs. Organizations with many Stelara^® users could benefit from even greater savings.

Our group benefits experts closely examine the factors that influence your drug insurance costs. Feel free to leverage our expertise to help you implement simple and effective cost management measures. You can also contact your Normandin Beaudry consultant or email us.