I attended the Academy of Managed Care Pharmacy (AMCP) Annual Meeting & Showcase earlier this month and came away with the following impression: it will be a good next 12-18 months for plan sponsors and their drug plan trends, but the wheels will likely fall off the cart in a big way after that.

Essentially, these next 12-18 months will feel very much like the calm before the storm. The favourable short-term forecast will be the result of a few factors. First, we are entering the golden age of generic drugs in North America as the introduction of blockbuster generics such as ramipril (Altace®), venlafaxine (Effexor XR®), and omeprazole (Losec®), as well as the potential introduction of amlodipine (Norvasc™) in the near future, means that the cost of treating very common chronic conditions such as high blood pressure, stomach hyperacidity and depression will decrease materially. Secondly, Big Pharma is facing weak product pipelines and has lost some potential blockbusters such as torcetrapib (once considered to be the next Lipitor™ as far as its revenue potential) and ximelagatran (a highly anticipated oral anticoagulant with potentially significant side effects) in late stage testing. Furthermore, other drugs thought to be very promising are facing increased regulatory scrutiny before they will be considered to avoid another Vioxx® situation. To date, only six new drugs have been approved by Health Canada in 2007.

However, as we enter the era of specialty drugs and the next storm hits, it could be a hurricane unlike anything Canadian plan sponsors have ever seen. While there have been roughly 250 biological products introduced in the US market between from the early 1980s to 2005, there are currently over 400 drugs in the biotechnology pipeline., many of which will be targeted at very common disease states such as cancer and diabetes. By 2010, it is expected that 50% of FDA approvals will be specialty drugs that carry with them a very significant price tag.

The good news is that plan sponsors, carriers, claims adjudicators, consultants and brokers have some time to ready themselves for the challenges that lie ahead. For some groups, that will likely be evidenced by flat (or potentially negative) cost trends in 2007 and 2008. All plan sponsors, however, would be well advised to take advantage of the next 12-18 months to optimize their current plan designs and prepare for what’s ahead. Otherwise the sustainability of their drug plans could be in jeopardy.

IN THIS ISSUE...

A New Prescription-Requiring Smoking Cessation Product Hits Canadian Market Sales Suspension of Zelnorm® NOC Watch Brave New World - What the Near Future Holds