Without a doubt, drug plan management has become more complex. Growing utilization has been a driving factor for more than a decade, but the emergence of higher-cost specialty pharmaceuticals in recent years has taken drug plan management to a whole new level.

At the June 2016 meeting of the Canadian Leadership Council on Drug Plan Partnerships in Toronto, representatives for insurance carriers, pharmacy benefits managers, benefits advisors, pharmaceutical companies, pharmacies and physicians were quick to agree that it’s time to step back and try to restore simplicity to coverage.

“We have clients who want to do the right thing to help their employees get the best access to treatment and medications, but the private-payer market is complicating the process. The endless forms, approval processes and layers of case management slow everyone down. There is no simplicity,” said Sandra Ventin, associate vice-president at Accompass Inc.

Read: Canadian Leadership Council: A seat at the table

Poor co-ordination and transparency between players can result in inefficiency and confusion. While technology has come a long way in recent years, participants at the June meeting agreed that stakeholders must first adjust mindsets and work better together to truly move forward.

They also suggested that simplicity starts at the point of prescribing. “Support physicians to follow best practices so the patient gets the right product at the right time, quickly, and support patients with very clear and directive feedback. Case management at the doctor’s office will simplify today’s very fragmented process,” said Ventin.

Such an ambitious goal is possible only through new partnerships. “We have to figure out this partnership piece to see how we all can simplify,” said Dr. David Satok, a family physician and corporate medical director at Rogers Communications Inc.

“If I’m a good physician, I simplify my patients’ lives. That’s true for all of us, as a measure of how well we are able to do our respective jobs.”

Busting myths

Participants emphasized the need for greater transparency to build the types of partnerships necessary for innovation. Such transparency can begin by dispelling long-held misconceptions, including:

  • Drug prices in Canada are among the highest in the world and are rising:

In Canada, the Patented Medicine Prices Review Board regulates the prices of brand-name drugs. “Canada, in fact, is the only country in the world with a government agency like PMPRB that sets a ceiling price for brand-name drugs,” said Joe Farago, executive director of health-care innovation at Innovative Medicines Canada. “And once prices are set, they don’t go up much. Over the last 10 years, most drug price increases have been below CPI.”

  • Insurers have no incentive to help manage costs because of volume- based payments:

While that statement is technically true under today’s business model, the greater truth is “that if insurers don’t have a market, then they don’t have a business,” said Stephen Frank, vice-president of policy development and health at the Canadian Life and Health Insurance Association.

Read: Drug plan trends report: How drug plans are addressing skyrocketing costs

With that in mind, insurers have invested in system upgrades and new programs, such as preferred provider networks and case management, and are building new partnerships with patient groups, physicians and pharmacies. “The capabilities that carriers have today versus five years ago are as night and day,” said Frank.

  • Physicians have no interest in the cost of a drug when prescribing:

“Awareness and interest are growing due to media coverage, changes in patients’ coverage and, of course, the blossoming of biologic drug costs,” said Satok. Physician groups, including the Canadian Medical Association, have also become active through Choosing Wisely Canada, a campaign to help clinicians and patients avoid unnecessary tests, treatments and procedures.

  • Pharmacists just fill prescriptions:

Despite the education and skills that reinforce pharmacists’ role as the medication experts in the health-care system, “it has been common in the past for the uninformed to minimize their involvement to simply pill counting,” said Angelo Tsebelis, director of payor partnerships at Shoppers Drug Mart and Loblaw Companies Ltd.

Read: How pharmacy services are catching on with private payers

“Nothing could be further from the truth.” The last decade, in particular, has seen a significant shift in both perspective and potential, stimulated in large part by expanded scopes of practice. Tsebelis noted that the next few years would see “a continuation of workflow transformation” to free pharmacists’ time to provide a broader range of medication management services.

The bottomless pool?

Pooling and stop-loss insurance generated significant discussion at the meeting, with the general consensus calling for better multi-stakeholder solutions. To help put matters into context, presenter Gary Walters, a group insurance supply-chain consultant, explained that insurance for catastrophic costs entered a new age with the emergence of higher-cost specialty pharmaceuticals.

“Really, we have not done insurance on medical or dental until recently, other than for out-of-country claims,” he said.

“The world has changed so fast, much faster than we expected.” The fact that these catastrophic drug costs may recur year after year to treat chronic conditions further complicates matters and raises the issue of greater understanding between public and private payers, since many of the new drugs covered by private insurance ultimately benefit the public health-care system, said Walters.

Read: Canadians divided on benefits of a universal drug program: report

Case study: One employer’s response to biologics

Universal Music Canada Inc. got a wake-up call in 2009, when the renewal of its insured benefits plan for about 180 employees added an unprecedented 14 per cent to the bottom line. A look at claims data revealed an inaugural claim for a biologic drug and a 27 per cent increase in spending on paramedical benefits. Working with its advisor and carrier, the company made the following changes: a 20 per cent copayment on the first $5,000 claimed for drugs, then 100 per cent coverage after that; a 20 per cent copayment for all paramedical benefits and a reduced annual cap to $400 from $500; and a 20 per cent copayment on basic dental services and recall examinations every nine months instead of every six.

Printed materials and face-to-face meetings transformed employees’ initial negative reactions into an appreciation of the need for change. “We did a lot of education about the reasons why we were forced to make some difficult decisions and to ask for everyone’s participation in taking some ownership in how we manage this plan going forward,” said Voula Vagdatis, vice-president of human resources at Universal Music Canada.

Since 2009, renewals have added an average of just one per cent to the bottom line.

The renewal itself helps achieve the efficiencies. “It’s a 12-month process, so there are never any unknowns,” said Noel MacKay, principal consultant at the Williamson Group. “Every month, we send a financial estimate of the plan. We look at month-over-month trending and we always give a renewal forecast.”

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Copyright © 2019 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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