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News



December 07, 2011
Biologics gradually dominating drug plans

The impact of biologic drugs on health care spending continues to grow at double digit rates, according to information published by Green Shield Canada.

According the Green Shield 2010 Drug Trends Study of more than 56 million drug claims from 2005 to 2010, the use and impact of biologic medications (drugs developed from living cells, tissues and micro-organisms using highly controlled manufacturing processes) on drug plans continues to be significant.

Among its findings:

  • the total market share of biologics has grown from 8.3 per cent of drug spending in 2005-06 to 11.3 per cent in 2009-10, an annual growth rate of 12.1 per cent;
  • while the most expensive five per cent of drug claimants account for 40 per cent of drug plan costs, almost half of those costs are now derived from biologic drugs; and
  • those age 35 to 44 have the highest annual growth rate in drug costs, thanks largely to the use of biologic medications.

While biologic drugs have a far higher success rate than traditional chemical-based medications, their costs far exceed those of older pharmaceuticals.  For example, the newly developed vaccine Provenge, used to treat prostate cancer, costs $100,000.  To date, many of the newly developed biologic drugs are immunomodulators and anti-neoplastics, used to treat illnesses such as rheumatoid arthritis, Crohn’s disease, ulcerative colitis, psoriasis and certain cancers. 

However, their expansion into other treatment modalities is just a matter of time.  According to a Thompson Reuters-Newport study of US drug trends, 6,000 biologic drugs were in clinical trials in 2009.  That compares to 1,200 in 2005.  The study predicts that by 2014, six of the top 10 drugs on the market will be biologics.

Already, the top 12 biologic drugs account for $30 billion in US drug spending, the Thompson Reuters-Newport study says.

For plan sponsors with drug plans, biologic drugs is one issue that can be expected to dominate their claims experience – and its related costs – in the near future.

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