Private drug plans are hugely valuable, for employees and employers alike, and they need to continue to be a part of the national drug landscape, even with a pharmacare program, said one speaker at the 2018 Calgary Drug Trends Summit.
At the same time, drug costs are creating sustainability issues, said Sarah Lussier Hoskyn, senior analyst of regulatory affairs and market access at Innovative Medicines Canada, during a session at the event on Oct. 25. “We need private drug plans to evolve to become more innovative, and focus on reducing utilization growth through holistic wellness strategies for employees as a long-term cost-management strategy, and not just focus on specialty drugs.”
Most Canadians have access to some kind of benefits plan, whether public or private, but there are gaps in prescription drug coverage, said Lussier Hoskyn, referring to a 2017 Conference Board of Canada report. While two-thirds of Canadians have access to private drug plans, employees at small- to medium-sized companies typically shoulder a significant cost-sharing burden, such as high coinsurance fees or spending caps. And a small proportion of plan members — less than one per cent of all beneficiaries in benefits plans — require high-cost specialty drugs for complex health conditions, leading to sustainability issues, noted Lussier Hoskyn.
While drug costs are increasing, it’s mainly due to chronic illness, with non-specialty drugs making up the bulk of costs in private benefits plans.
“Utilization is the underlying driver, and that’s not stopping any time soon. Chronic disease is what’s really driving most of the costs in the private market,” said Lussier Hoskyn, emphasizing that plan sponsors need to look carefully at their main cost drivers and develop a strategy to reduce or mitigate those costs over the long term. Autoimmune disease and diabetes are the two fastest growing classes of chronic illness in terms of drug costs, while the top chronic illnesses in terms of drug costs are cardiovascular disease, mental health and autoimmune disease.
New generic drugs and biosimilars will have an offsetting impact, said Lussier Hoskyn. However, she noted savings from generics and biosimilars will not be enough to offset utilization growth. Instead, holistic wellness and prevention programs will have a role to play. In large part, these wellness strategies would be educational in nature, and could also include incentives to encourage plan members to become more aware of the connection between lifestyle and health.
“Prevention is a big thing,” said Lussier Hoskyn. “You need to look at your benefits package in a holistic way, from the perspective of reducing disease. Can you help them to address all of those lifestyle interventions that can prevent them from hitting your books?”
Next spring, the advisory council on the implementation of national pharmacare is due to release a final report on how to best implement a national program. There is still an opportunity for plan sponsors to include their voices in the conversation. “Send in your submissions and talk to your MP,” said Lussier Hoskyn.
She believes it’s important for plan sponsors to let politicians know that private payers should continue to have a role in the national drug coverage landscape, and that a national pharmacare program should provide solutions to the cost issue of specialty drugs.
Read more coverage of the 2018 Calgary Drug Trends Summit.