Editorial: Shining a bright light on drug costs

It’s hard enough for plan members to understand how they can best use their benefits plans, particularly when they’re unaware of the details of the fees charged by service providers.

Consider drug claims at a pharmacy. Many plan members aren’t aware that the cost includes an amount for the drug itself, a markup by the pharmacist and a dispensing fee. When plan members still have to pay a relatively small amount over and above what their benefits plan covers, many of them just figure it’s due to co-insurance and don’t both to ask any questions.

Read: Pharmacists’ role evolving to help plans manage costs

Plan members may get a hint that something else is going on when they submit a claim for a high-cost drug and ask why there’s a fairly hefty amount to pay on top of their benefits coverage. If they probe deeply enough, they’ll discover it’s possibly because, beyond co-insurance, the pharmacy is charging amounts above what the insurer has determined to be reasonable and customary for their area.

So if plan members are aware of the fees and markups, they may do more to shop around for a pharmacy that charges a lower amount. That’s why it was a welcome development recently when new rules, through Bill 92, came into effect in Quebec that require pharmacies to provide a detailed breakdown of the drug cost, markup and dispensing fee on their receipts.

The move was good news in a province where, on average, people who get their medication through a private benefits plan pay 17 per cent more in pharmacists’ fees than would be the case if they were to go through the public drug program.

Read: Quebec move to boost pharmacy transparency could save plan sponsors money

On its own, the change may not do much to reduce cost pressures on private benefits plans but it should at least help encourage more price competition among pharmacies. There are other implications for private benefits plans, however. If insurance carriers also have access to the detailed fee breakdowns for drug claims, they’ll have a helpful tool to set reasonable and customary fees for pharmacy charges in Quebec.

But the pharmacist association in Quebec, l’Association québécoise des pharmaciens propriétaires, doesn’t want that to happen. The organization is asking the courts to agree with its interpretation that the requirement under Bill 92 to provide the cost breakdowns doesn’t extend to pharmacy benefits managers and insurance carriers. What’s more, it’s asking the Regie de l’assurance maladie du Québec, which administers the province’s public health and prescription drug plans, to prohibit the use of reasonable and customary limits.

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It’s understandable that pharmacists would want to limit the bill’s impact on their business and it’s fair to point out that there are other players in the system that affect the cost of drugs. But given the cost pressures on private benefits plans, it’s important for the provincial government to support a liberal application of the new rules that provides for a greater chance of increased cost controls.

Giving tools to consumers is certainly very helpful. But with many plan members still not aware of their options or the various costs they’re paying, even in other provinces that already provide for detailed breakdowns, it’s not enough to rely on that change alone.

Glenn Kauth is the editor of Benefits Canada.

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