A look at the tools to address drug plan cost pressures

With rising drug costs on the minds of many plan sponsors, a speaker at Benefits Canada’s Chronic Disease at Work event outlined some of the opportunities for them to manage their benefit plans.

Suzanne Lepage, a private health plan strategist, discussed the impact of specialty drugs at the June 22 event in Toronto. She also outlined a variety of cost-saving measures and the impacts that they might have on the plan member.

Lepage listed what she referred to as “the three pillars of the tools” in plan sponsors’ toolkit for managing drug costs. They include:

  • Addressing drug choice through generic substitution, therapeutic substitution, case management, prior authorization, step therapy or a managed formulary.
  • Implementing cost sharing by increasing the plan member co-payment or introducing a deductible, a dispensing fee cap, a maximum, a managed formulary, a maximum allowable cost or provincial plan integration.
  • Addressing drug cost through a preferred pharmacy network, pharmacy agreements or product listing agreements.

However, before making a drug plan design change, it’s important to consider how it will affect the plan member, Lepage noted. Lepage encouraged plan sponsors to have a discussion with their plan advisor, insurer or adjudicator to find out what would happen to plan members who currently have prescriptions if they change their drug plan design.

“You need to be able to . . . acknowledge how many patients could be impacted by the plan design change that you’re implementing,” she said.

For plan sponsors that are looking to implement cost-shifting measures, Lepage noted they would affect the affordability of the co-payment for the plan member and could then result in decreased patient adherence.

“We have to start thinking about whether or not these are the patients that we really want to target with drug plan design changes,” said Lepage, who referred to data showing that while specialty drug costs are significant, they represent only a small number of claims.

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According to the 2015 Telus Health report, specialty drugs represented 23 per cent of all drug costs. But in terms of the number of claimants, they ranked No. 40 on the list and represented only 0.5 per cent of all claims.

Given the numbers, Lepage suggested plan sponsors may want to tackle other areas of cost pressure. “Rather, we need to think about whether or not we want to tackle some of the other conditions, as they represent 77 per cent of the drug cost and 99.5 per cent of the claimants,” she said.

Read more from the Chronic Disease at Work conference