While many Canadian drug benefits plans have adopted generic substitution policies, plans sponsors continue to face significant cost pressures.
“Keeping these plans affordable and sustainable is very important,” Barbara Martinez, national practice leader for drug benefits solutions at Great-West Life Assurance Co., told Benefits Canada’s Calgary Benefits Summit on May 5.
How can plan sponsors design drug plans to minimize the negative impact of market forces? First, it’s very important to ensure plans are paying for the lowest-cost drug unless there’s a medical reason not to, said Martinez. “Generic substitution is the minimum standard that all plans should adopt.”
While new generics have entered the market, an aging population means claims volumes continue to rise. But another significant factor is the entry of new drugs that typically cost more onto the market, according to Martinez. “Even in younger populations, we see biologic drugs as the top drugs paid for in benefits plans,” she said.
When it comes to biologic and specialty drugs, it’s not about eliminating them, she added. “We have to make drugs available and do it properly through such things as rigorous preauthorization; health-case management; specialty pharmacy networks; and subsequent-entry biologics strategies to ensure the right people are getting the right drug at the right time.
“The market has changed, and plans need to change, too. Lowest-cost alternatives are not enough, and traditional drug cost management strategies will no longer be effective in the new environment. Drug plans are an investment in the health and productivity of employees, and it’s important to be strategic about balancing costs and health moving forward.”
Martinez also touted the need to manage the cost of chronic disease through health and wellness programs. “Health and wellness programs in the workplace are ways to get people healthier and more productive, saving money on plans at the same time,” said Martinez.
Read more from Benefits Canada‘s 2016 Calgary Benefits Summit