HomebusinesshealthAwards and RecognitionbusinesshealthResourcesBlog
The Callery Group
About UsOur ServicesContact Us

Prescription for Disaster
Advances in pharmaceuticals are threatening your drug plan

Modern medicine continues to discover innovative treatments for a broad array of diseases, giving patients a new lease on life. The irony is that these same medical advances are also threatening the health of drug plans that help to offset the related costs.

Consider the steps that have been taken to care for more than 300,000 Canadians infected with Hepatitis C. An older generation of drugs will cure about half those who receive a prescription. (Less than half of those with Hepatitis C know they have the disease.) To compound matters, significant side effects can emerge through the 12-month treatment plans.

Enter the latest generation of drugs that promises a 90% cure rate and fewer side effects during treatments that last between 12 and 24 weeks.

Good news, right? But the drug costs about $100,000 per patient. If every Canadian with Hepatitis C used it, the costs would amount to $30 billion. To put that into context, Canadians annually spend $23.3 billion on all drugs combined.

Not only that, but we can expect more people to be diagnosed. The Public Health Agency of Canada, for example, is encouraging the screening of injection drug users or immigrants from high-risk countries. The Canadian Liver Foundation is going a step further and suggesting screening for everyone born between 1945 and 1975.

It isn't the only example of higher drug costs to come. Many people who read this blog will be taking some form of medication for high levels of cholesterol. Scientists have since identified a gene that regulates LDL receptors, controlling the way the liver can clean bad cholesterol from blood. The antibody known as ecolocumab is injected every two to four weeks, at a cost of $7,000 to $12,000 per treatment. It would potentially cost $2.6 billion a year, or about 11% of the overall amount spent on drugs today.

A decade ago, only one prescription came with a price tag above $75,000. Now there are more than 600. Even while pooling arrangements can share the cost of the expensive drugs, the price of this support has caused some plan premiums to jump as much as 20 to 150%.

Then there is an unavoidable demographic shift as the population ages, leading to an inescapable increase in chronic diseases that require pharmaceutical support.

Nobody is suggesting that people should be denied the drugs that will dramatically improve their health, but costly medications are increasing the strain on drug plans. Workplaces that want to sustain their plans will have to explore strategies that can help to keep costs under control.

It begins by taking a closer look at existing claims. Benefits advisors can break down the types of drugs being purchased, to help see if more cost-effective options might be available. Alberta Blue Cross recommends that certain drugs should only be covered after special authorization, which involves medical practitioners specifically requesting coverage on certain drugs. There is no rubber stamp.

Plans can be further refined to reduce other economic pressures. Increases in the deductibles for dispensing fees and their frequency can encourage employees to combine orders, reducing an administrative cost. Deductibles per prescription, meanwhile, will often encourage people to explore the option of generic medications with their physicians. Plan holders can be encouraged to use pre-approved pharmacies with better rates, and ask physicians about available generic treatments.

A long-term commitment to workplace health will make a difference of its own. Wellness programs adopted to encourage healthy habits from diet to exercise can help reduce the need for maintenance drugs. There's no mistaking the fact that a health-minded workforce is less likely to develop conditions such as Type 2 diabetes and cholesterol. The threat of heart attacks and strokes can drop as well.

Ultimately, everyone has a role to play in reducing the costs. With paramedical fees now accounting for as much as 40% of some medical claims, it may be time for tough decisions. The person looking to book an extra massage or dental cleaning just because there is room in the plan may want to ask themselves if the added expense is worth it, especially if the strain can threaten the sustainability of the overall plan.

Continuing business as usual is simply a prescription for disaster.

Top Tips:

  • Ask benefits providers to track the specific drugs being used in your workplace, to see if cost-effective options are available.
  • Educate employees about the factors that are increasing the costs of drug plans. When well-informed, everyone is more likely to embrace cost-saving strategies.
  • Encourage plan holders to use pre-approved pharmacies with better rates, and to ask physicians about available generic treatments.

Copyright Notice

All rights reserved. All of the content herein is the sole property of the Callery Group, and may not be reproduced, transmitted, or stored in a retrieval system - in whole or in part - without the written permission of the Callery Group. Links to the originating article at www.callerygroup.com are permitted.

The Buzz Bits
Miscellaneous links to interesting benefits information

Five tips to an engaged workforce: Your Workplace

Providing benefits is a large expense for employers: Benefits Canada

Obesity is a chronic disease: novo nordisk

The dilemma of expensive drugs: smallbizadvisor

Specialty drug management solutions: Medication Management

Community Ethics, Big City Expertise

Subscribe to the Buzz Blog

Blog archive

Unintended Lessons I've learned about Blogging so far

You never know what's going to happen when you click on a link [more]

Drugs, Alcohol and, Oh Yes, Marijuana

Changing times may require all of us to take a long hard look at our drug-and-alcohol policies [more]

Best Tips For Sleeping Well

If you're just not sleeping well, there are some pretty effective things you can do to make it better [more]

Survey Says: Wellness Programs Improve Overall Satisfaction

It seems that employees' satisfaction with wellness programs spills over into satisfaction with their benefits programs and their jobs in general [more]

Changes Coming to Personal Emergency Leave Laws

Amendments to the Employment Standards Act will significantly increase legally mandated employee leaves [more]

The Good News and the Bad News on Diabetes

We keep hearing about a "diabetes epidemic," but there are things we can do now to improve our odds of beating the statistics [more]

Who's Your "Broker" Working For?

In a world of brokers, agents, advisors and consultants, it's important to stay focused on who's really working for you [more]

The Secret to Really Good Workplace Wellness

Workplace wellness is a way to solve a lot of problems before they even come up [more]

Medical Marijuana - More Questions than Answers

A lack of medical consensus makes drug plan coverage of medical marijuana very difficult [more]

Pharmacogenomics Means Better Prescriptions

A simple DNA test can now help pinpoint which drugs are going to work best for you [more]

Why Airplanes Crash

What one successful CEO learned from air crash investigations – and how it all applies to managing any organization [more]

Not A Delicate Subject Anymore...

How to start the conversation about mental health in the workplace [more]

A Look Inside

There's more to this business that we usually talk about... [more]

Bio What-Now?

Get ready for "generic" biologics. [more]

What You Don't Want to Say to Your Doctor

There are some things that you want to explain to your doctor, and some things you really should stay away from. [more]

Your Dentist's Pet Peeve

Why you should know all the ins and outs of your dental insurance plan before you ever lean back in the chair and open wide [more]

About that Credit Card Travel Insurance

It may be of some value, especially if you have no pre-existing conditions, but you really need to read that fine print [more]

Right Drug, Right Time, Right Cost

Why you should work with your doctor, your pharmacist, and your drug plan to make sure you get optimal treatmenty [more]

Big Smiles

A focus on dental plans will ensure that everyone remains happy [more]

Your Doctor Doesn't Know Everything

When it comes to prescriptions, patients need to be part of the conversation [more]

Prescription for Disaster

Advances in pharmaceuticals are threatening your drug plan [more]

Sleep Easy

Conditions like sleep apnea can be treated, ensuring proper rest and productive days [more]

Easy as EAP

Formal support makes a big difference when employees face personal challenges [more]

Well Done

10 ways to develop an effective workplace wellness program [more]

Mind Matters

Businesses can't afford to ignore the mental health of their employees [more]

Brian's Story

Brian Callery is celebrating 40 years in our business. It's a commitment that makes a difference in his clients' businesses [more]

The Benefits to You

The same plans designed to protect employees will also offer advantages to employers [more]

Lawyer Up

There are legal ramifications around changing benefit plans - especially if an employee is being terminated [more]

Travel Trauma

Dream vacations can turn into nightmares when travel insurance claims are denied [more]

Evolution Solution

Evolving benefit plans will meet employee needs and support recruiting and retention efforts [more]

Plan & Predict

How rising paramedical claims, drug reforms, and other trends will affect your workplace benefits [more]

Who Benefits

Education makes the case for workplace benefit plans [more]

Season of Renewal

Important questions to ask your benefits advisor before inking a deal [more]

Preventive Measures

Paramedical services help keep employees healthy, on the job, and productive [more]

A Bounce in Their Step

Canada Rubber Group employees are embracing their new wellness program [more]

Business Benefits

Shandex Group and Indaco Manufacturing discuss the value of evolving employee benefits plans [more]

A New Mindset

Workplaces can't afford to ignore the mental health of employees [more]

Cost Cutters

10 cost-cutting strategies to protect your benefits plan [more]

Safe Travels

12 ways to protect yourself on your next vacation [more]

Breaking News

Learn from the mistakes of an AOL executive when discussing any changes to your benefits plans [more]

Watch the Gaps

Protect against turnover and lost opportunities by recognizing the generation gaps [more]

Generation Next

Generation Y represents the future of your business - and will see workplace benefits plans in a different way [more]

Absent Minded

Employers are paying the price for absenteeism, but it can be controlled [more]

Think Positive

Programs that build positive workplaces make business sense [more]

Back to School

8 important lessons your employees need to learn about benefits plans [more]

Find a Better Broker

6 questions you should ask anyone who wants to sell you a benefits plan [more]

Plan Your ROI

5 ways employee benefits plans can deliver a real Return on Investment [more]

The Benefit of Benefits

3 ways a benefits plan can improve your company's bottom line. [more]

A Healthy Dose of Information

5 questions for your pharmacist that might save your drug plan and your wallet. [more]

Claim Denied

Consider these 8 ways to avoid rejected benefit claims. [more]

Travel Planning

6 questions to ask before assuming you are protected by a group plan's travel insurance. [more]

Biologic Logic

Growing list of biologic drugs could bankrupt poorly protected drug plans. [more]

Smart Shopping

8 shopping habits that will protect your benefits plan. [more]

Tough Medicine

Employees will share more responsibilities and higher costs to sustain their benefits. [more]

Crime Costs

5 scams that could be placing your benefits plan at risk. [more]

A Prescription for Your Drug Plan

Skyrocketing drug prices may be threatening your benefits plan, but generic drugs offer a cure. [more]

Planes, Trains and Travel Insurance

The fine print in your travel insurance may leave you more exposed than you think. [more]

Healthy and Wealthy

5 steps to an employee wellness program that will generate real financial returns. [more]

Avoiding Burnout During Holiday Season

Education and Prevention can help control spiraling benefit costs. [more]

Sweat the Small Stuff

Protect your staff by avoiding these common "paperwork" mistakes by administrators. [more]



Services Personal Services Corporate Services