Think tank evaluates current methods for drug coverage

Against a backdrop of spiralling drug costs coupled with an aging population, appropriate evaluation and coverage of drugs has taken on special urgency. Many stakeholders believe a new approach to drug evaluation is needed to manage the marked increase in drug spend, while still ensuring Canadians have access to beneficial medications.

To facilitate the exchange of ideas in this complex and sometimes daunting area, Benefits Canada organized a think-tank forum titled Canadian Leadership Council on Drug Evaluation. Held at the Fairmont Royal York Hotel in Toronto on June 22, 2011, the invitation-only event brought together key stakeholders in Canadian drug evaluation for a day of presentations interwoven with lively group discussions.

“The decision to cover a new drug is easy if the drug is both more effective and more cost-effective than an older one,” said private health plan strategist Suzanne Lepage, who moderated the event. But what happens when a drug is a little more effective and a lot more costly? Or more effective than older drugs in certain patient subgroups only? That’s where the tough decisions begin, says Lepage.

While public payers have traditionally acted as gatekeepers for new drugs, covering some and excluding others, private payers have not taken that stance, said participant Martin Chung, assistant vice-president at Equitable Life. “In the public payer sector, there’s a process to determine inclusion in a formulary,” Chung noted. “We private payers may exclude vaccines, lifestyle drugs or OTC drugs, but just about everything else gets the green light.”

But that’s in Canada. The picture looks somewhat different in the U.S. “The vast majority of our plan members are following some kind of restricted formulary,” said presenter Jeffrey White, who leads the drug evaluation team at WellPoint, the U.S.’s largest health plan provider.
Here are just a few of the ideas explored by participants during the group discussions:

  • Private payers have the opportunity to get together, as the public sector has done, and generate efficiencies by sharing data and harmonizing principles for making formulary decisions.
  • The pharmaceutical industry will be under increasing pressure to tailor their drug submission to real-world scenarios and to include treatment benefits relevant to private payers.
  • There is an opportunity for greater creativity and nuance in designing plans (i.e., partial coverage, time-limited coverage, variable co-insurance and co-pays).
  • Consumers are also part of the cost equation; they need to understand that by accepting some of the cost burden of drugs that dramatically improve their quality of life, everybody wins.
  • The solution also lies in individual health management, thus reducing people’s need for drugs.

A full report of the meeting, with detailed summaries of the presentations and group discussions will appear in the July/August issue of Benefits Canada.