Get ready to pay more for private drug plans
233 Comments
Margaret Pykalo
I am still waiting for the
promised Pharmacare from the government which was supposed to give
patients the necessary prescription drugs for free AND save the health
system between 8-11 BILLION $!
It was promised during the election campaign - still waiting....
It was promised during the election campaign - still waiting....
Rob Munson
@Margaret Pykalo
Just curious. Was this the federal election or was it a provincial election? In other words, who promised you these benefits? I missed that promise but then of course I don't usually believe the promises that politicians make to us during elections.
Just curious. Was this the federal election or was it a provincial election? In other words, who promised you these benefits? I missed that promise but then of course I don't usually believe the promises that politicians make to us during elections.
Hugh Lacroix
@Margaret Pykalo That was the NDP and the Green Party that promised that. That is why it seemed too good to be true.
I mean, how do you give away the cow and get the milk cheaper?
I mean, how do you give away the cow and get the milk cheaper?
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David Raymond Amos
@Hugh Lacroix Yo Hubby Baby
How is that you can get away with pretending to be the evil lawyer who
Harper appointed to be CBC's Boss and make your comments, yet as I post
in my true name the Crown Corp that we support with our taxes often
blocks my legit comments???
Get ready to pay more for private drug plans
Expensive new drugs, higher fees and prescribing practices are pushing up the cost of employer plans
By Vik Adhopia, CBC News Posted: Nov 14, 2016 5:00 AM ET
Last Updated: Nov 14, 2016 5:00 AM ET
Even the simplest physical job used to be painful for Brenda
McAlpine. The Mississauga, Ont., woman is among the approximately
250,000 Canadians who suffer from an inflammatory bowel disease.
The symptoms left her with extreme fatigue, weight loss and low haemoglobin and affected her overall quality of life. But her condition radically improved after she was prescribed Remicade following her second surgery.
Feeling "normal" comes with a hefty price tag — about $40,000 a year — but she's covered through her husband's work insurance plan. Approximately 40 per cent of Canadians are covered by employee supplementary health benefits.
The Patented Medicine Prices Review Board says sales of these drug treatments have doubled since 2010 in Canada, hitting $2.2 billion in 2015. (A recent review by the federal agency found Remicade costs 25 per cent less in other markets comparable to Canada.)
During that same period, commonly prescribed drugs such as the cholesterol-lowering Lipitor came off patent and cheaper generic versions hit the market, which helped insurance plans cut costs. But those savings have now been realized, so employers that pay insurers to administer group benefits are faced with higher premiums.
Adding to the cost are various prescription-related fees. For example, pharmacists not only bill a flat dispensing fee per drug, they also usually charge a markup based on the cost of the medication.
The claim then goes to a PBM (pharmacy benefits manager), such as Telus Health and Express Scripts, hired by insurance companies to instantly process each claim for a fee.
The insurance company adds up those costs and often also tacks on a percentage for themselves. So the pricier the drugs, and the more frequently the prescription is filled, the more fees are accrued.
But Mike Sullivan, a Toronto-based insurance consultant for employers, says the costs are unsustainable, even with a premium increase.
"If it doesn't get fixed, everybody is going to lose: The insurance carriers, the claims processors, the pharmacies that are on every corner, the plan member who is relying on the benefit and the employer."
Sullivan's company, Cubic Health, audits employee drug plans to identify causes of skyrocketing drug claims.
He says huge variations in treatment decisions by prescribing doctors are also driving costs, though patients are often oblivious.
The astronomical markup was the result of the particular combination in which the treatment was prescribed by the physician, which Sullivan said wasn't medically necessary. That decision was a bonanza for the pharmacy involved.
"So in actual fact, that employer paid the pharmacy $31,000 to hand three sets of tablets to a member over the course of six months. And this happened and nobody asked a question," said Sullivan
Employers mistakenly assume physicians will prescribe cheaper alternatives, he added.
But not every drug plan is paying high prices.
Sullivan said public plans administered by provincial governments get
the lowest prices for medications — often because of deals with drug
makers.
Helen Stevenson, a former assistant deputy minister of health in the Ontario government, acknowledged that the public plan has lower costs. "We were the second largest plan in North America. We had a lot of buying power. So we were able to secure some significant discounts."
"Basically their employees say they're frustrated by increased premiums and no additional benefits. You're not improving our plan — you're making us pay a higher premium for the same plan," she said.
The Canadian Life and Health Insurance Association, which represents most of the country's private insurers, confirmed it's expecting its members to increase premiums.
With files from CBC's Marcy Cuttler
Brenda McAlpine, who lives with inflammatory bowel
disease, relies on a private drug plan to pay 90 per cent of the cost
for her prescription for a biologic anti-inflammatory.
The symptoms left her with extreme fatigue, weight loss and low haemoglobin and affected her overall quality of life. But her condition radically improved after she was prescribed Remicade following her second surgery.
- Drug price regulations need overhaul to protect consumers, experts say
- Prescription drug spending growth fuelled by costly new drugs
Feeling "normal" comes with a hefty price tag — about $40,000 a year — but she's covered through her husband's work insurance plan. Approximately 40 per cent of Canadians are covered by employee supplementary health benefits.
New anti-inflammatories driving up costs
Pricey new biologic anti-inflammatories, such as Remicade, Enbrel, Humira and Rituxan, are one reason why the cost of these insurance benefits are expected to go up in 2017. The medications are used to treat chronic inflammatory diseases such as rheumatoid arthritis, Crohn's disease, ulcerative colitis and psoriasis.The Patented Medicine Prices Review Board says sales of these drug treatments have doubled since 2010 in Canada, hitting $2.2 billion in 2015. (A recent review by the federal agency found Remicade costs 25 per cent less in other markets comparable to Canada.)
During that same period, commonly prescribed drugs such as the cholesterol-lowering Lipitor came off patent and cheaper generic versions hit the market, which helped insurance plans cut costs. But those savings have now been realized, so employers that pay insurers to administer group benefits are faced with higher premiums.
Adding to the cost are various prescription-related fees. For example, pharmacists not only bill a flat dispensing fee per drug, they also usually charge a markup based on the cost of the medication.
The claim then goes to a PBM (pharmacy benefits manager), such as Telus Health and Express Scripts, hired by insurance companies to instantly process each claim for a fee.
The insurance company adds up those costs and often also tacks on a percentage for themselves. So the pricier the drugs, and the more frequently the prescription is filled, the more fees are accrued.
Costs seen as unsustainable
The higher drug prices have been a boon for drugstores, which might explain why there's been 20 per cent growth in the number of retail pharmacies in Canada since 2008.But Mike Sullivan, a Toronto-based insurance consultant for employers, says the costs are unsustainable, even with a premium increase.
Mike Sullivan, a former pharmacist, now audits employers' insurance plans for irregular spending. (CBC)
"If it doesn't get fixed, everybody is going to lose: The insurance carriers, the claims processors, the pharmacies that are on every corner, the plan member who is relying on the benefit and the employer."
Sullivan's company, Cubic Health, audits employee drug plans to identify causes of skyrocketing drug claims.
He says huge variations in treatment decisions by prescribing doctors are also driving costs, though patients are often oblivious.
Doctors don't always care about cost of drugs
Sullivan, a licensed pharmacist, cites the example of a recent review, in which he discovered an employee had billed $220,000 for a hepatitis C treatment which normally costs approximately $60,000-$70,000.The astronomical markup was the result of the particular combination in which the treatment was prescribed by the physician, which Sullivan said wasn't medically necessary. That decision was a bonanza for the pharmacy involved.
Why health insurance premiums are rising0:54
"So in actual fact, that employer paid the pharmacy $31,000 to hand three sets of tablets to a member over the course of six months. And this happened and nobody asked a question," said Sullivan
Employers mistakenly assume physicians will prescribe cheaper alternatives, he added.
But not every drug plan is paying high prices.
Provincial plans represent a large chunk of
the market and have negotiated better rates. (Canadian Institute of
Health Information)
Helen Stevenson, a former assistant deputy minister of health in the Ontario government, acknowledged that the public plan has lower costs. "We were the second largest plan in North America. We had a lot of buying power. So we were able to secure some significant discounts."
Public plans have buying power
But Stevenson, who now works with employers to reduce drug costs, said private insurers don't have the same incentive as the public system to haggle for lower prices. That means employers have already started to brace their staff for insurance premium increases."Basically their employees say they're frustrated by increased premiums and no additional benefits. You're not improving our plan — you're making us pay a higher premium for the same plan," she said.
The Canadian Life and Health Insurance Association, which represents most of the country's private insurers, confirmed it's expecting its members to increase premiums.
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