As innovations in science and technology disrupt the status quo, developments such as pharmacogenetic testing in group benefits plans and robo-advisors in the pension industry are offering new options for plan members, a panel of experts said at an event on Wednesday.
The acceptance of pharmacogenetic testing is growing as 88 per cent of doctors believe it will be the standard of care in the future, according to James Kennedy, head of molecular science and head of the Tanenbaum Centre for Pharmacogenetics at the Centre for Addiction and Mental Health. Kennedy spoke on Wednesday at an educational event hosted by the Toronto chapter of the International Society of Certified Employee Benefit Specialists.
He also cited a study in Minnesota that showed a 65 per cent reduction in disability costs for patients who underwent pharmacogenetic testing compared to those who didn’t.
Also speaking at the event, Michael Prouse, director of operations at Personalized Prescribing Inc., said that with a quarter of hospital visits related to adverse drug reactions, the rise of pharmocogenetic testing is a promising solution to that issue.
Veronika Litinski, chief operating officer at GeneYouIn Inc., which provides genetic testing, also spoke to the technology’s promising results. She referred to a trial run at a Toronto drugstore that showed that, among 100 people tested, 75 had meaningful changes to their medications.
The impact of pharmacogenetics on plan sponsors and group benefit plans arises largely in not paying for medications and drugs that don’t work, as well as reducing the risk and duration of disability, she said. “Most plans include a drug benefit, so with pharmacogenetics, you ensure people who use the drug benefits actually benefit from the drugs.”
She cites an example of a widely prescribed blood pressure medication, which aims to protect against further cardiac events but doesn’t work for about 30 per cent of patients. “So you take medication thinking it’s protecting you from another stroke or heart attack, but in fact you’re not protected,” she said, emphasizing the benefit of optimizing the drug therapy.
Litinski noted the savings that pharmacogenetics offer to benefits plans accumulate over time. They mostly come from not paying for ineffective drugs, she said, suggesting there has been a great deal of interest in pharmacogenetic testing from plan members.
Turning the subject to the pension arena, Simon Chan, a managing partner at consultancy FinTech Growth Syndicate Inc., spoke about technological developments in that area. “Robo-advisors are just the beginning, I promise you,” he said, referring to the entrance of financial technology in the defined contribution pension market.
While the initial entry by robo-advisors into the capital accumulation plan industry has been in group registered retirement savings plans, the future challenge will be to expand products across pension plans due to regulatory requirements around plan sponsor reporting, he said.
Chan also spoke to the reasons why financial technology is disrupting the status quo, noting it’s an issue of demand, rather than supply, as consumer expectations change, demographics shift and technology advances exponentially.
“One of the things we can learn from fintechs is client segmentation,” said Chan, adding that financial technology can provide some useful lessons about how to engage with plan members. He acknowledged, however, that Canadians are generally conservative and slower to pick up on those new technologies.