With Canadian healthcare costs on the rise, I often suggest to benefits administrators plan design modifications that would cut costs without reducing benefits—for example, a preferred provider network. However, these suggestions are often met with distaste. I hear objections such as, “We can’t ask our employees to go to one pharmacy and not the other.” The discussion historically has ended there—until recently.
Plan sponsors struggling to get their drug plans under control should look at their diabetic population and reiterate the importance of medication adherence.
The topic of specialty drugs still dominates industry discussions, yet very little has changed in terms of the management of these claims. It’s as though specialty drugs have given the industry a vacation from focusing on boring traditional drug plan design in favour of having circular discussions that lead nowhere about wonderful (and expensive) innovations.
In 2011, the amount paid toward drug coverage by Canadian private drug plans reached $7.6 billion, an increase of $1.8 billion over the past five years, according to IMS Brogan’s Private Drug Plan Database. The corresponding increase in cost to plan sponsors has spurred discussions on the sustainability of group insurance plans and the need for a long-term perspective on potential solutions.
owers Watson has partnered with Loblaw Companies Ltd. (Loblaw) as the preferred pharmacy services provider for the firm’s Canadian Rx Coalition, a collaborative network of private sector drug plan sponsors.
The notion that generic drugs represent a new and frightening concept has pretty much been struck from our collective consciousness, yet generic utilization rates in drug plans in Canada have not reached the levels observed in the United States and throughout much of Europe.
The changes and uncertainty in today’s drug benefits landscape are a challenge to everyone. With our aging population, escalating usage rates and blockbuster-priced new drugs around the corner, many business owners are rightly concerned about the sustainability of this essential benefit.
Controlling escalating drug costs means plan sponsors need to do more than just have prior authorization for high-cost drugs and restricted formularies. These programs will help, but it’s a small percentage of the employee population that actually uses the drugs.
The specialty drugs for treating chronic conditions can be miraculously effective, but they come with a high price tag, and plan sponsors are pressured to both cover these drugs and find ways to achieve plan sustainability. At the first-ever Face to Face Drug Plan Management Forum in Vancouver on May 31, participants were encouraged to cross-examine drug plan management strategies for ways to alleviate costs. The half-day event—Changing With the Times: The New Face of Drug Plan Management—attracted more than 130 registrants to the Marriott Pinnacle Downtown.
Drug benefits are the most significant cost component in most employer-sponsored health benefits plans. Drug costs range between 40% and 70% of an organization’s total health benefits costs, and they are set to rise.