Despite the frenzy the legislation for lower generic drugs caused,  leading plan sponsors to think it would equate to lower costs for benefits plans, those beliefs were quickly dispelled by industry professionals that pointed out generics are not widely used in drug plans.

Suzanne Lepage, private health plan strategist from Kitchener, Ont. pointed out in her presentation at the Canadian Health and Wellness Innovations Conference, hosted by the International Foundation of Employee Benefits Plans in Las Vegas, that in Ontario only 8.2% of current drug plan costs will be subject to this new pricing. In B.C., the number is a litter higher, 11.4%, but still not a significant amount.

She also pointed out there are a lot of uncertainties when it comes to drug reform across Canada. How will pharmacies make up the costs? Will dispensing fees rise? Will the cost of ingredients go up on all drugs? Will there be an increase in generic drugs for provinces with no controls in place for private plans?

Currently, B.C., Alberta, Quebec and Newfoundland are the only provinces that have legislation that will help reduce costs for private plans. The rest of the provinces have only focused on public plans and how better pricing schemes can benefit them.

This, coupled with the use of biologic drugs becoming more prevalent and the expected high-cost impact of those, means employer need to start putting their own mechanisms into place to help control the costs within their own drug plans.

Lepage points out the following strategies are not new, yet they are still not widely adopted. More plans should be considering these initiatives as a way to keep the costs of their drug plans under control.

  • Plan member cost sharing
  • Formulary management
  • Plan member eductation
  • Negotiate with a pharmacy/create preferred provider networks  
  • More intagration with government drug plans (make sure members are using the public services to the full extent)
  • Case management for high-cost drug claims

Lepage admits that case management for drug claims isn’t common practice in Canada but it should be. “Is [the drug] being uses appropriately?  Does the member have the lowest cost provider?  Are they getting the right care? It’s not a disability case but why wouldn’t you manage that claim as you would a disability claim?” she asks.

Certainly every plan has its own challenges and specific circumstances but as of yet, drug plan management for most plans is more theory than practice.

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