Canadian-drugs-cost

Several large B.C. public sector unionized plans have recently bargained new drug plans that mimic BC PharmaCare coverage. While the net impact will take some time to assess, there are some considerations for plan sponsors contemplating similar changes.

Although moving to a provincial mimic drug plan in B.C. may appear to save costs, there can be some unintended short- and long-term consequences, said Joanne Jung, director, pharmacy services, with Pacific Blue Cross, at last week’s Face to Face Drug Plan Management Forum in Vancouver.

Out of 1,426 drugs available in Canada, BC PharmaCare covers only 664 drugs, 220 of which are only available to patients who meet specific criteria. That leaves 762 drugs not covered. According to an analysis of 2012 Pacific Blue Cross claims data, 54% of its claims costs and 32% of its claims volumes are for drugs not covered by BC Pharmacare.

Jung explained the potential impact to a plan member via a case study. The plan member’s Crohn’s disease has successfully been treated with Humira since 2010. Since her physician knew that she had private coverage, he did not apply for special authority with BC PharmaCare for her treatment. Because of her access to treatment, her symptoms have stabilized, and she is able to continue to work.

In 2013, the plan member’s employer changed the drug plan to mimic BC PharmaCare, which now requires her to apply for special authority for her treatment. To satisfy the criteria, she must stop her current treatment and complete and fail a sequence of alternate medications before she can be approved for coverage for Humira. If she does not apply or her coverage is denied, her private plan will no longer cover her treatment, and she will have to pay the $15,000 annual cost for Humira out of her own pocket.

Her plan sponsor could choose to grandfather coverage for plan members who have stabilized their complex conditions with specialized therapies. However, this will impact expected drug plan savings.

BC PharmaCare also advocates reference-based pricing or maximum allow cost for certain categories of drugs. In these classes, the payer chooses the least expensive drug in the drug class as the reference product; all other drugs in the class will only be reimbursed according to the reference drug price. This often results in the plan member being given the reference or lowest-cost medication.

The premise for this type of drug plan management assumes that all drugs are therapeutically equivalent or provide the same benefit.

“Although they may be structurally the same and have the same mechanism of action, there are not many head-to-head comparisons since most clinical trials compare new drugs to a placebo,” Jung said. “Many drugs have different side-effect profiles or drug interactions, which is why a variety of patient treatment options are needed.”

If patients are not getting the drug they need or facing side effects, “they may choose not to take their medication, which can result in more serious long-term health issues that can have significant impact on the private plan, the healthcare system and the plan member’s health and productivity,” she adds.

Plan sponsors need to look at the big picture and analyze their individual plan usage to determine the potential impact of plan design changes on their plan members, Jung said. Without this due diligence, there can be some unintended consequences that can impact plan members’ health outcomes and adherence.

Suzanne Lepage is a private health plan strategist based in Kitchener, Ont. suzanne@suzannelepage.ca

© Copyright 2016 Rogers Media Inc. Originally published on benefitscanada.com

Smallbizadvisor

Check out this one-stop resource for advisors in the small group benefits and retirement markets.

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required

*