The benefits industry often talks about the need for organizations to change the design of their drug plans, but how many of them are actually doing it? A professor at the University of British Columbia shed some light on the trends during the opening session at Benefits Canada’s Face to Face in Drug Plan Management Forum in Vancouver on Tuesday.
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Noting that the days of plans largely being a “blank cheque” that covers everything are largely over in an era of rising drug costs, Prof. Michael Law, Canada research chair in access to medicines and a faculty member at the university’s Centre for Health Services and Policy Research, noted organizations have a range of both blunt tools and subtler approaches at their disposal. The blunt tools, he told the audience at Vancouver’s Fairmont Waterfront Hotel, include plan deductibles and annual and lifetime caps on coverage. The subtler tools — ones he likened to an exacto knife — include features that can steer plan members to particular drug therapies, such as product listing agreements and generic substitution. So what are the trends among plan sponsors when it comes to using the blunt tools? “Deductibles have actually seen a decrease in use . . .,” said Law, who noted that patient charges through mechanisms like coinsurance have increased, as have caps on dispensing fees.
When it comes to lifetime caps on coverage, less than three per cent of plans had them in 1998, Law told the conference. By 2015, that number had risen to more than nine per cent. As for annual caps, the number was three per cent in 1998 and 13 per cent in 2015, according to Law.
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Turning to the subtler tools, Law noted plan sponsors have embraced one in particular. “One area where we have seen tons of movement in the last while is in generic substitution . . .,” he said, noting the decline in prices for generic drugs has given plan sponsors an extra incentive to encourage their use. Still, he expressed some surprise in noting that while the percentage of plans with mandatory generic substitution has increased rapidly from less than 10 per cent in 2010, the uptake was still relatively low at 40 per cent in 2015. “This, to me, is still a crazy number,” he said.
When it comes to plans using formularies, Law put the number at about 19 per cent in 2010 and noted it has likely risen since then. “I say [the number is] going higher because we don’t have a good number,” he said. And while he suggested plan sponsors have so far focused on “baby steps” towards more sophisticated plan designs, he predicted the movement away from the relatively liberal approach in Canada will gather momentum. “Canadians, right now, are paying for the gravy train . . .,” he said.
“Moving forward, I think these changes are probably inevitable,” he added.