Nova Scotia has become the latest province to clamp down on OxyContin prescriptions, with Health Minister Maureen MacDonald announcing the province will only pay for the potent painkiller’s replacement in extenuating circumstances – for cancer-related pain or palliative care.

Nova Scotia’s move comes days after Ontario, with the highest rates of prescription-opioid addiction in the country, announced it is tightening rules for the painkiller. Physicians called the move a step forward, but warned that changing publicly funded drug plans won’t be nearly enough to stem abuse from the prescription drug.

“There is a lot more that needs to be done,” said David Juurlink, a drug-safety specialist at Sunnybrook Hospital in Toronto. “These drugs should be harder to obtain, harder to prescribe – and certainly at high doses.”

Provinces’ intention to restrict long-acting oxycodone prescriptions only apply to people covered by public drug plans – and they’re in the minority.

Fifty-five per cent of the cash spent on Canadians’ prescription drugs comes from private insurance plans or individuals paying out of pocket. That makes for a total of $14.3-billion spent privately on drugs in 2010 – $350-million on narcotics alone, according to Mike Sullivan, head of Cubic Health, a Toronto-based company that advises insurance plans.

And tightening the rules on drugs paid for privately is far trickier.

“I don’t know of a single plan out there that has restrictions out there for coverage of narcotics,” Mr. Sullivan said. “I absolutely think they should.”

About 80 per cent of the employers his company deals with Canada-wide have had instances of inappropriate narcotics use among their plans’ beneficiaries.

Mr. Sullivan is hoping employers put dollar thresholds on the narcotics they pay for, with anything above requiring special authorization, and a doctor’s note.

Helen Stevenson has been on both sides of the quandary: Formerly executive officer of Ontario’s public drug programs, she now runs Reformulary, which is designing its own formulary for insurers and their clients. The company inked a deal with Sun Life Financial in December.

Ms. Stevenson wouldn’t say what its rules will be for narcotics like OxyNEO, but says she’s looking at the same criteria facing Ontario and other provinces.

In the meantime, provinces are aiming to be proactive after being accused of inaction in the face of rising addiction rates and thousands of opioid-related deaths.

“We recognize the need to impose stronger restrictions on potentially addictive prescription drugs,” Nova Scotia’s Ms. MacDonald said in an interview. “We have particular pockets in the province where we’ve had difficulties.”

The Annapolis Valley and Cape Breton are among them – areas rocked by spikes in prescription-opioid addiction, attendant crime and overdose deaths. The crisis prompted a rethink of the province’s addiction treatment: Now, Ms. MacDonald said, they’re focused on licensing methadone doctors to cover a broader, decentralized area.

Manitoba restricted the kinds of OxyContin prescriptions it pays for two years ago. It was the only study that saw an ever-so-slight drop in oxycodone use in 2010, notes University of Manitoba pharmacist Shawn Budgen. But he admits success is tough to measure.

“We know the use went down a little bit, but we’re not really sure if it was steering people away from abusing this product,” he said.

“It’s a very complex problem. We feel [the new regulation] has helped encourage rational use. And that’s at least part of the solution.”

Clopidogrel is a commonly used oral tablet prescribed by physicians to prevent heart attacks and strokes in susceptible individuals (i.e. those with heart disease, blood circulation disease or recent stroke) by preventing detrimental blood clots.

According to our Cubic Health national benchmarking data, Plavix® was the 12th most costly drug to private drug plans in Canada in 2010. Thus, the introduction of generic clopidogrel could translate into material cost savings for plans – especially considering treatment with this medication is typically prolonged (i.e. spanning years of therapy). For example, looking at the relative pricing of these products in Ontario, generic clopidogrel is currently priced at 35% of the price of the brand (i.e. $0.97 per tablet for the generic, compared to $2.77 per tablet for the brand). As a result, plans with mandatory generic substitution policies in place are well positioned to take advantage of immediate and future plan savings with clopidogrel. This is an example of how plan management can allow for financial flexibility to ensure plan sustainability and/or provide funds for investments in other areas of the plan to enhance the health and wellbeing of plan members. This is also an example of how plans can avoid making difficult decisions such as placing annual limits on coverage, increasing cost-sharing to members, and/or excluding coverage of certain types of products.

The upside of aggressive patent litigation by generic companies is that plan sponsors can benefit from lower ingredient costs in cases like this. However, there is also a significant win for the brand-name pharmaceutical companies that understand they will eventually lose patent protection on these drugs: cost savings in areas like this provide plan sponsors with the ability to fund more expensive specialty medications and other innovations for which less expensive therapeutic alternatives are not available.

While events like generic Plavix coming to market may seem not particularly noteworthy to the average plan sponsor, it is important to consider the win-win-win scenario for plan sponsors and their members, generic pharmaceutical companies and brand-name pharmaceutical companies. All three stakeholder groups depend on each other to keep the cycle of innovation moving forward – innovation that benefits every member within the plan.

Mozobil™ (plerixafor injection)

Mozobil™ is a new drug that has been approved for use in conjunction with another agent, granulocyte-colony stimulating factor (G-CSF), for patients with certain blood cancers (i.e. non-Hodgkin’s lymphoma or multiple myeloma). The combination allows their own blood-derived stem cells to be collected before treatment with chemotherapy or radiation, and then returned after high dose chemotherapy or radiation is given, thereby allowing the production of new normal blood cells to replace those destroyed during these therapies.

Mozobil™ is given as a subcutaneous injection (under the skin) approximately 11 hours before each stem cell collection, up to a total of 4 days. Based on pricing in the US, a single vial of Mozobil™ is expected to cost around $7,500, running a 4-day treatment cost of $30,000 for an adult patient.

Patients will most likely receive Mozobil™ treatment at a hospital or transplant centre. Therefore, it remains to be determined whether plan sponsors will feel that coverage of this product falls under the responsibility of the public health care system, or whether they will feel that private-sector coverage for Mozobil™ is warranted given its role as an adjunctive treatment for these blood cancers. Plan sponsors may wish to re-visit their plan contract wording to ensure their plan provisions accurately reflect their intended coverage for Mozobil™ and other hospital use products and/or ensure they are equipped with a well-structured Prior Authorization program for specialty products like Mozobil™.

Resotran™ (prucalopride succinate)

Resotran™ is a drug used to help normalize bowel movements in women with chronic constipation in whom standard laxatives have not provided satisfactory relief. While it just received approval to be marketed in Canada, this drug has been approved for use in Europe since 2009 under the name Resolor®.

Resotran™ is taken orally, once daily, and is expected to provide improvement in patient satisfaction and quality of life. While pricing for Resotran™ in Canada is not available at the time of writing, a one-month supply is expected to cost around $100 CAD based on pricing in the UK.

From the plan sponsor’s perspective, it’s important to note that the National Institute for Health and Clinical Excellence (NICE) in the UK suggests that prucalopride should only be considered in women who have tried at least two different kinds of laxatives for at least six months with no relief and in whom further invasive treatment is being considered. Plans may therefore wish to consider covering Resotran™ within a step-therapy or prior authorization program to ensure that such criteria have been satisfied before coverage begins.

Proponents of full product DTCA argue for patient empowerment, collaborative health care, and earlier diagnosis of potential ailments, while opponents argue against biased information, undue pressure on physicians to prescribe inappropriate therapy, and the financially-based motives of the advertisers. Overall, everyone agrees that DTCA results in an increase in the prescribing rates of the drugs being advertised, but are at odds when deciding if this is good or bad for the health of the patients receiving these medications.

For the plan sponsor, the story is less ambiguous today. As DTCA almost exclusively markets new and expensive brand name therapies, an increase in the prescribing rates of these advertised medications will typically lead to an increase in overall plan spending. Given that most plan sponsors are not measuring relevant health metrics such as changes in adherence with therapy or the total cost burden of a given disease state across a plan, and are only looking at drug costs as a line item, DTCA is not thought of highly by those paying the bill.

What is interesting to see is that DTCA is becoming more sophisticated. Let’s consider the recent media pot stirred by celebrity chef, Paula Deen. After striking a deal with Novo Nordisk, she has begun appearing in various DTCAs endorsing Victoza®, a once-daily, non-insulin injectable drug to treat her type II diabetes. While traditional oral therapy with generic gliclazide costs roughly $25 for a three month supply, treatment with Victoza® would run approximately $465*. The issue at hand goes beyond the minimum $1,760 yearly difference in treatment costs for a single diabetic claimant – it’s the fact that this increased cost comes with arguably no improvement to the patient in terms of clinical effect, or safety profile based on the information that is available today. Even compared to a novel oral therapy with a similar mechanism of action, such as Januvia®, treatment with Victoza® over a one-year period would result in an extra $795 of submitted costs to the plan per individual for little or no additional clinical benefit.

In short, it’s going to take all the butter and southern comfort in the world for Paula Deen to make this kind of cost premium appetizing for most plan sponsors.

Celebrity endorsement with DTCA helps illustrate why plan sponsors must be more sophisticated when managing their plans. If increases in drug utilization and spending within certain disease states has a positive impact on a company’s absence and disability experience, and reduces the overall cost burden to an employer of a given disease, this would be a useful investment on the drug plan side. However, if additional drug spending in certain areas is not providing additional value to an employer, the investment could have better been made elsewhere. If plan sponsors aren’t measuring anything, how will they know what’s happening?

DTCA highlights two key opportunities. For pharmaceutical manufacturers, they need to look more seriously at plan sponsors and assisting private payers in measuring the health outcomes and return on investment for spending that has gone towards their products. Given the cost pressures that exist for most employers, pharmaceutical companies need to realize the pot of money to invest in products like Victoza is not unlimited. If they want to see investments made in these areas, they need to help plans measure the return. For plan sponsors, recognizing that containing plan costs is not going to get any easier moving forward, they need to become more active in managing their plan experience. Solutions such as evidence-based therapeutic decisions, in the form of multi-tiered-formularies, and properly structured prior authorization programs are not going to get any less valuable or relevant over time.

At the end of the day, if stakeholders like plan sponsors and manufacturers don’t get more sophisticated in measuring the return on their investments, and finding creative solutions to achieve better health outcomes in a sustainable manner, the missed opportunities will severely reduce their options down the road. That may not be what Paula Deen had in mind when she answered Novo Nordisk’s call, but it’s something those of us who manage these plans for a living (as opposed to making sauces) better start taking seriously.

* All estimated drug costs are based upon current Ontario pricing (i.e. pharmacy acquisition cost), do not include pharmacy markups, and do not include dispensing fees.