New prescription drugs are increasing quality of life and lifespan for patients with diseases that were until recently considered untreatable. Providing access to these life-changing but extremely costly medications is a further challenge for private and public health-care programs already burdened by rising chronic disease rates and an aging population.
Overall, prescription drug spending in Canada's private sector has increased nearly fivefold in the last 20 years, from $3.6 billion in 1993 to $15.9 billion in 2013. "These increases are far in excess of inflation and are a drag on the competitiveness of Canadian companies," says Mike Biskey, president of Express Scripts Canada, a provider of health benefits management services.
To help meet these challenges, the Canadian insurance industry works closely with employers, policy leaders and other stakeholders to develop innovative new solutions. "Insurers have invested heavily to help employers optimize health outcomes and manage costs," says Stephen Frank, vice president of policy development and health for the Canadian Life and Health Insurance Association (CLHIA).
Reducing waste by empowering plan members to practise drug adherence and make effective purchasing decisions is an essential first step in ensuring access, says Janet Jackson, vice president of group marketing at Empire Life. "Some of these new drugs are making a huge difference in people's lives, and they should be covered, but employers need to find a way to balance those costs."
In 2013, for example, Express Scripts Canada research found that about $5.2 billion was wasted due to plan member choices that resulted in unnecessarily costly dispensing fees, use of higher-cost medications when lower-cost but equally effective alternatives were available, and non-adherence, when medicines are not taken as prescribed.
Health case management, a plan option offered by Great-West Life, demonstrates the value of innovative plan design. Health case managers are registered nurses who work with patients to optimize health outcomes.
"Their role is to help patients who have been prescribed high-cost drugs navigate the treatment plan," says Ben Harrison, manager of group strategic relationships with Great-West Life.
Almost 90 per cent of Great-West Life plans have adopted the service, and about 1,000 patients have gone through the program. Plan members and patient advocacy groups have expressed their appreciation of the "personal touch" provided, and the results have been successful in terms of both health outcomes and cost savings, says Mr. Harrison. "We've seen savings of about 25 per cent, which helps maintain access to the types of medications plan members need. More importantly, many members say what they value most is the support and having someone to talk to."
A drug-pooling plan adopted by CLHIA members in early 2013, unique in the world, enables private insurers to share the financial risks that high-cost claims pose. "It shelters Canadians from potentially losing their employer-sponsored drug coverage due to a high-cost claim, something that was an increasing risk for small and medium-sized businesses in particular," says Ms. Jackson.
CLHIA and its members are also advocating policy measures to address pricing disparities and levels across both public and private plans. As Mr. Frank explains, "Canadians pay some of the highest prices in the world for drugs. We're urging a review that examines the reasons for that. For example, the Patented Medicine Prices Review Board has been in place for 27 years and has never had a review of its mandate or operations – we believe it's due."
Ms. Jackson, who represented Empire Life on CLHIA's task forces on drug reform, points out that there is currently "a patchwork" of public and private plans with different rules and pricing. "Employers are feeling the pinch of rising costs and reacting to it by increasingly restricting coverage, which is then pushing up out-of-pocket costs for the average Canadian.
"When employers look out five or 10 years, they are concerned about being able to sustain coverage. But if we were to simply bring our costs down to the OECD average, our drug bill would drop by $9.6 billion a year," she stresses.
Equality of access to public drug plans is also an issue the CLHIA task force concluded requires urgent examination, says Mr. Frank. "Each of the many provincial, territorial and federal drug plans has a different list of drugs that are covered, and the private sector has hundreds of different formularies.
"We're urging governments to create a common minimum formulary that all Canadians have access to, whatever company they're employed by or province they live in."