Biologic drugs have been around for about 20-years or so and are best known for their development in combating diseases like Cancer, Diabetes, and Multiple Sclerosis. The difference between a Biologic drug and a typical pharmaceutical would be the shelf-life. A biologic is made up of a living system (microorganism, plant or animal cell) and can not be stored for long term; whereby a typical pharmaceutical is chemical based and therefore can be ‘stored’ for long periods of time.
Because a Biologic is typically a large, complex mixture of molecules using, in may cases recombinant DNA technology, they are not mass produced and are sensitive to minor changes in the manufacturing process and this increases the costs of these drugs dramatically.
Where a cost of a typical pharmaceutical may be hundreds of dollars, a biologic by contrast will be thousands of dollars per use.
According to many research studies, biologic drugs represent 14% to 16% of drug spending and 60% of catastrophic claims and are growing by about 14% per year (versus 4% for other drugs).
Specialty drugs in Canada costs about $132-million a year encompassing high cost injection and infusion drug therapies. These are high touch, high support, specifically distributed drug treatments, which can rack up the drug utilization on a benefit plan with just one user.
The drug Avast, for example, used in Cancer treatment can cost upwards of $50,000 a year; Humors an arthritis medication costs between $20-$30,000 per year, per patient.
Covering these drugs are a concern from both access and cost perspectives. No one wants to be denied access; however, employers are rightly concerns about what to do with the costs. Moving into these new innovative therapies means everyone has responsibility to be involved to make the treatment successful and affordable.
To put biologic advancement in perspective, there are more than 6000 rare diseases right now and yet there are treatments for about 400, with another 2000 rare treatments in development.
Good treatments result in less hospitalization and use of the health care system; therefore, although the initial treatment is more costly, over the long term it will be more cost effective.
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