The following notes were taken at “Rethinking Drug Plan Strategies” panel at Forum 2017, the annual convention of CPBI (Canadian Pension and Benefits Institute) held June 5-7 at the Delta Hotel in Winnipeg with the theme: “Thriving In a Climate of Change”.
Panelists: Stephen Frank (Canadian Life and Health Insurance Association) / Barb Martinez (The Great-West Life Assurance Company) / Tanya Potashnik (Canadian Competition Bureau) / Moderator: Kim Siddall (Aon Hewitt)
Key Points
In the good old days, drugs were released at a cost of $20/pill. Those days are mostly gone, as new medications can cost over $50,000 per pill with annual prescriptions costing over $1 million per person.
Doctors are now comfortable with generic drugs and have no problem to prescribe them, which helps keep costs down. But doctors are not yet comfortable prescribing “bio-similars”, drugs which are nearly identical but are not generic duplicates. While bio-similars are usually cheaper, there is actually very little penetration in the drug market yet, but we expect to see more of these drugs in the years to come.
Plan designs are changing from 100 percent coverage to more like 80 percent. The goal is to get patients to put some skin in the game, so that they will be more conscious about seeking the lowest cost treatments available. Many union plans remain at 100 percent coverage. Fully insured plans are under stress and may not be sustainable due to the rising costs of drugs.
Carriers (i.e., insurance companies) are moving towards common definitions. For example, what defines a “critical illness”. This standardization will enable clients to more easily pick and choose the benefits that are right for them.
Canada is one of the only advanced economies that does not have national negotiations on drug prices. As a result, Canadian drug prices are amongst the highest in the world. The UK has twice the population of Canada and spends the same amount on drugs.
Drug companies are introducing patient assistance programs to ensure that patients fill and continue their prescriptions/treatments as per the doctor’s orders.
