The changes in Ontario’s drug system that came into effect July 1 have provided employers with an opportunity to revisit their drug plans and consider an integrated wellness approach, according to Aon Consulting Canada.
The recent patent expiry of Lipitor and the anticipated patent expiry of several other highly utilized prescription drugs over the next 12-24 months will provide drug plan sponsors with unexpected savings, explains Aon.
“Reduction of generic drug prices to 50% as of July 1, 2010 and ultimately to 25% of brand name by April 1, 2012 mean incremental savings for employers may be significant in the years ahead,” the company said in a statement.
“What is less clear is how these changes will affect plan members and uninsured Ontarians given that dispensing fees and drug mark-ups remain unregulated in the private sector,” says Martin Chung, vice-president at Aon Consulting. “The $150 million to fund MedsCheck, transition fees, and rural pharmacy services does not offset the net revenue loss for most pharmacies.”
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According to the statement, the new regulatory changes will generate appreciable savings for many employers. However, demographic factors and pricey new drugs currently in the pipeline suggest that long-term inflationary trends to remain significant.
“A ‘window of opportunity’ exists for employers to thoughtfully reinvest cost savings from this regulatory change into integrated employee wellness solutions that support balancing the need for sustainable, long-term cost mitigation with the increasing need to maintain engaged and healthy employees,” says the firm.
Ontario surprised the pharmacy industry earlier this year when it announced changes to legislation regarding pharmaceutical pricing and “professional allowances” paid to pharmacies by manufacturers.
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