By Helen Stevenson, Reformulary Group

On December 12, 2019, the Alberta governement launched the Alberta Biosimilars Initiative. Alberta is the second province after British Columbia to implement a biosimilar "switching" or transitioning program for adult patients on government-sponsored drug plans.1 Ontario is currently considering a similar move, and other provinces are likely to follow to save money and sustain coverage.

Exactly how each province will encourage the switch is unclear. But the cost of biologic drugs places a significant financial burden on employer plans, plan administrators, and publicly funded plans. For example, it can cost up to $40,000 a year to treat Rheumatoid Arthritis with a biologic. Switching to a clinically similar biosimilar could bring significant cost savings to patients and payers. What’s more, biosimilars have virtually the same efficacy and safety as biologic drugs.

In November 2019, the Canadian Agency for Drugs and Technology in Health (CADTH) convened a “National Consultation on the Use and Implementation of Biosimilars”.According to CADTH, biosimilars represent a total future savings potential of up to $1.8 billion per year; to achieve these savings, public and private payers will need to implement strategies to require much higher adoption rates of biosimilars.

What this means for employers and plan sponsors

Employers may be interested in aligning with provincial initiatives, requiring that plan members switch to the biosimilar. While some employers may choose not to require plan members to switch, there would be cost implications (i.e., continued spend on higher priced biologics) for those plan sponsors. And there are other groups – such as unionized plans – where switching may not be an option as benefits are negotiated.

Most small or mid-sized organizations typically let the insurance companies take the lead on biosimilars. However, developing a proactive biosimilar policy can help employers gauge how such a policy could impact overall benefits offerings. Here are some tips to get the best coverage possible:

  1. Do your research. Take a proactive approach to learning about biosimilar drugs. Connect with your advisor, who is familiar with both the benefits and the challenges of switching to biosimilars.
  2. Review your options. Make direct contact with insurance companies for clarification on their biosimilar policy to determine if it’s the right fit for your plan. If they aren’t introducing a policy, it is recommended to find out what other measures they are taking to help clients with sustainability of benefits.
  3. Share information. Change can be difficult. If you decide to include a biosimilar policy, sharing information with employees will help plan members understand the change. Share your goals of sustaining your benefits plan over time and the impact this shift will have on your ability to do that.
  4. Be realistic about expectations. While biosimilars could bring significant cost savings to patients and payers, they are unlikely to offer the same savings as generic drugs.

Taking a proactive approach to understand these changes is encouraged to ensure you maintain a baseline of benefits coverage for your employees while still managing your costs.

Hub International’s team of brokers is constantly in touch with new trends and developments in healthcare and employee benefits, ensuring that our clients can access the information needed to make informed decisions.

Helen Stevenson is the founder and CEO of Reformulary Group, a health care technology company focused on helping Canadians make smart drug medical cannabis choices.

1 Accessed January 22, 2020.