Rising Drug Costs and how to control them.
Protect your benefits plan from rising costs
Spending on prescription drugs is steadily increasing in Canada. We now have the second highest drug prices in the world, after the United States. In 2015, Canadians spent $29.4 billion on prescription drugs, which represents 625 million dispensed prescriptions.
Specialty drugs account for just 2% of prescription drug claims submitted in Canada, but that actually represents 30% of total drug claim costs. These drugs allow people with debilitating conditions, such as multiple sclerosis or cancer, to lead normal lives or, in some cases, be cured. By 2020, it’s expected that the cost of specialty drugs will increase to 42% of total drug claim costs.
What’s behind the numbers?
To understand the trend, it’s important to consider contributing factors:
- We have an aging population with a longer lifespan.
- More chronic conditions are being diagnosed and prescriptions for these conditions are increasing.
- More medical conditions are being diagnosed and treated earlier.
- Patients are driving demand for some treatments as they take a more proactive approach to their health.
- An increased number of new and more expensive specialty drugs are available to treat these chronic conditions.
As a plan sponsor, you know that escalating health-care costs mean rising premiums, which can result in more strain on your benefits budget.
Finding the right balance between plan benefits and plan cost is key to the overall success of your benefits plan.
Controlling costs for affordable coverage.
There are a number of available plan design options that can contribute to significant savings while still providing comprehensive benefits to your plan members.
Mandatory generic drug substitution means that the pharmacist dispenses the lowest priced equivalent, usually the generic version, of the prescribed drug if one is available. Mandatory generic substitution ensures that all claims for drugs with a generic version are cut back to the lowest priced equivalent, even if a physician indicates on the prescription that there can’t be a substitution.
Co-insurance and co-pays are effective tools for cost sharing. Plan sponsors can set a per-prescription deductible and choose the percentage plan members are reimbursed for each claimed prescription.
Limiting dispensing quantities can help reduce waste and benefit dollars spent on drugs that cause adverse reactions. When an acute drug becomes a maintenance drug, the pharmacist can fill a 100-day supply to reduce dispensing fees.
A dispensing fee maximum encourages plan members to research which pharmacy provides the best value.
For more Information and customized solution for your plan please contact us.