Spotlight on biosimilars
Action required for plan members in Saskatchewan and Ontario who take a biologic drug
Ontario and Saskatchewan are the latest provinces to adopt biosimilar initiatives. Biologic drugs generally cost over $10,000 per patient per year. Biosimilars can be created once the patent for the biologic expires, and they cost much less. Biosimilar initiatives aim to transition patients from biologics to biosimilars wherever possible. Health Canada has stated that approved biosimilars are just as safe and effective as biologics but less expensive
The Empire Life approach is to follow the provincial lead and help transition plan members to biosimilars—except where we have a pricing agreement with the drug manufacturer that makes it more cost-effective for the plan member to stay on a biologic.
A transition period is in progress in Saskatchewan and Ontario. Saskatchewan launched its initiative in October and will complete the transition on April 30, 2023. Ontario began migrating patients last month and will complete its transition on December 30, 2023. Provinces no longer cover biologic drugs once a corresponding biosimilar has been approved and added to its Biosimilars Initiative.
Empire Life continues to cover biologics throughout the provincial transition period
Empire Life has sent letters directly to plan members and/or their dependants who are affected by this change, to remind them of the need to discuss switching to a biosimilar with their doctor. Empire Life will continue to cover biologic drugs throughout the provincial transition periods to give plan members time to secure an appointment with their doctor.
Plan members taking a biologic covered by a preferential pricing agreement will not be asked to switch since Empire Life has negotiated agreements with pharmaceutical companies to reduce the cost of specific biologic drugs to that of the biosimilar.
Plan members who choose to remain on a biologic drug that is covered by a biosimilars initiative will be responsible for the full cost of the drug once the provincial transition period is over. If a plan member is unable to make the switch for medical reasons, their doctor can request an exception.
In 2019, British Columbia was the first province to launch a biosimilars initiative, followed by Alberta later that year; New Brunswick and Northwest Territories in 2021; Quebec, Nova Scotia, and Saskatchewan in 2022.
While there are slight differences from province to province, the intent everywhere is the same: to avoid, as much as possible, the high cost of specialty drugs by migrating patients to less costly, but therapeutically equivalent, biosimilars.
Healthcare costs are straining provincial budgets and, every year, the cost of biologics as a share of drug spending increases–from 17% in 2011 to 34% in 2020, per the table below.
According to Statistics Canada, total spending by all levels of government in 2021 was $969.5 billion—lower than the year before but still higher than pre-pandemic spending of $799.7 billion in 2019. Health spending, which rose 14.2% in 2020, increased by another 6.5% in 2021.
Biologics, or specialty drugs as they are sometimes called, generally cost over $10,000 per patient per year. The most expensive specialty drug in the world, Zolgensma, costs $2.8 million a dose. It’s used to slow the onset of disabilities caused by spinal muscular atrophy, in children. Biosimilars can be created once the patent expires, generally after 20 years.
Many provinces have highlighted how cost savings from the switch to biosimilars will enable them to invest in other much-needed services. Yet, absent biosimilars initiatives, savings have been low, as is reflected in the table below.
Before British Columbia adopted its biosimilar initiative uptake was low. Once implemented, migration to biosimilars happened very quickly.
Biologic drugs are derived from living organisms or from their cells. They are often made using biotechnology (the science used to genetically manipulate microorganisms to create antibiotics, hormones, or other medications). Examples include growth hormones and antibodies.
Biologic drugs are generally larger and more complex in composition than chemically produced traditional drugs. The research and development phase, and the fact that relatively few people take them, contribute to high costs.
Biologic drugs are used to treat a wide range of disease states and medical conditions including, but not limited to:
- rheumatoid arthritis
- some forms of cancer, and
- inflammatory bowel disease
Biosimilar drugs are not the same as generic drugs. Generic drugs are chemically produced and contain identical medical components to their brand-name counterparts. A biosimilar drug is highly similar but not identical to its reference biologic. That’s because biosimilars are composed of living cells rather than chemicals. It is important to note, there are no meaningful differences in the expected effectiveness and safety of a biosimilar equivalent.
- Biosimilars have been used in the European Union for more than 15 years.
- Omnitrope, a human growth hormone, was the first biosimilar approved in the EU, in 2006. It was approved in Canada in 2009
- There are more than 1000 biosimilars approved in Canada
- British Columbia was the first province to launch a biosimilars initiative, followed by Alberta, in 2019; New Brunswick and Northwest Territories in 2021; Quebec, Nova Scotia, and Saskatchewan followed in 2022. Ontario and Saskatchewan are adopting biosimilars initiatives in 2023.
- Biologics are drugs made with living organisms (e.g., yeast or animal cells), rather than being synthetically manufactured, and are often used to treat patients with chronic health conditions such as rheumatoid arthritis, inflammatory bowel disease, and diabetes. An originator biologic is the first version of a biologic drug.
- Biosimilars are similar to biologic drugs and enter the market after the patents or data protection rights for the originator biologic expire. They have similar effectiveness, safety, and quality as the originator biologic and have been approved for use in Canada by Health Canada.