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The trends and the associated costs of diabetes to plan sponsors

May 1, 2012

Neveen Abdelsayed, R.Ph.,B.Sc.Phm., CDE
Source: Perspective 2012 – by TELUS Health

The prevalence of diabetes is growing at such an alarming rate that it has been called a “global epidemic” by the Canadian Diabetes Association (CDA). Three million Canadians are currently living with diabetes and this number is expected to reach 3.7 million by 2020. About 90% of all diabetics are diagnosed with type 2 diabetes. It is crucial to assess the factors that are causing this exponential climb in order to monitor, control, and even change the course of this disease and its financial impact on the system as a whole. These factors include: the aging population of baby boomers, the rising obesity rates, the sedentary lifestyle of Canadians, the emergence of diabetes at a younger age (e.g. working age population), and the cultural mix of Canada (80% of new Canadians come from populations that are at a higher risk for type 2 diabetes [e.g., of Aboriginal, Hispanic, Asian, South Asian or African descent]).1

Diabetes is not a self-contained predicament. It is associated with complications that engage almost every organ in the human anatomy. It is closely linked to heart disease, stroke, kidney disease, blindness, amputation, erectile dysfunction (ED) and depression. As a result, the financial burden of diabetes is enormous, with medical costs that are two to three times higher in people with diabetes compared to those without. By 2020, it is estimated that diabetes will cost the Canadian healthcare system $16.9 billion a year.1 The increased financial impact of treating diabetes is clearly evident in the TELUS book of business when looking at trends on the number of claims and DIN cost paid in the past four years. In 2008, 5.6% of the total number of claims filled were for diabetes representing 6.6% of the total DIN cost paid. In 2011, 6.2% of the total number of claims filled were for diabetes representing 7.7% of the total DIN cost paid. These trends do not include the indirect costs associated with the complications of diabetes (e.g. costs of medications for blood pressure, cholesterol, ED, antidepressants, etc.). The person that is affected by diabetes further faces a cost of his or her own: reduced quality of life.

Moreover, diabetes is characterized by insulin resistance and an ongoing decline in beta cell function (the type of cells found in the pancreas that store and release insulin). Glucose levels worsen over time and treatment must be dynamic and diverse. As a result, in the past decade, an increased number of innovative anti-diabetic medications and classes of medications (e.g. incretin agents, newer insulin) have surfaced on the market. These new innovative drugs provide a larger selection of medications with different mechanisms of action. Even though these drugs provide options for physicians who treat patients that have progressed and require add-on therapy, the drugs are not recommended as first-line agents because they have not demonstrated additional benefits, as compared to older agents, and their long-term safety is still unknown. Furthermore, they are much more costly compared to familiar older products and have a remarkable impact on drug plans.

Nevertheless, the recent introduction of a new class known as in-cretin enhancers/mimetics has had a significant impact ondrug plans. Since its introduction in December 2007, Januvia,the first of incretin enhancers, paved the way for similar new drugs that have become the cost drivers of diabetes treatment. In 2011, the top four medications (in order) by DIN cost paid in the TELUS book of business (excluding insulins, lancets/strips, and devices) are: Januvia, Victoza, Janumet, and Onglyza. These top four are all incretin enhancers/mimetics. The popularity of this class is consistent from 2008-2011 (Januvia is #1 in DIN Cost Paid in the diabetes class from 2009-2011 – see graph 1) with the decline in the use of an antihyperglycemic class of drugs known as thiazolidinediones (Actos & Avandia). This decline was due to a Health Canada advisory notice regarding safety concerns about the use of this class and its link to fluid retention and congestive heart failure.2

The bittersweet trends of diabetes graphique

There are several solutions that can be implemented to ensure that plan sponsors and employers can better manage their drug plan costs in the face of this escalating upward price pressure. Wellness and health awareness programs can be introduced in the workplace as a preventative measure to slow the progression of diabetes and its complications (e.g. diet & exercise). In addition, the utilization of managed care plans (e.g., The National Formulary) and tiered managed formularies can determine coverage for cost-effective medications. This can help plan sponsors make informed decisions about which medications to cover as many new and different classes continue to be launched on the market.

1 Canadian Diabetes Association: Clinical Practice Guidelines:

2 Health Canada: Advisories, Warnings & Recalls: