Ensuring Sustainable Drug Coverage for Your Workforce
Balancing comprehensive benefits with financial health
Posted by Medavie Blue Cross on June 24, 2024
Ensuring Sustainable Drug Coverage for Your Workforce
Balancing comprehensive benefits with financial health
Posted by Medavie Blue Cross on June 24, 2024
Private payers are working hard to strike that balance between providing comprehensive pharmacy benefits and financially sustainable plans. Many organizational objectives depend on this approach, from improving the wellbeing and productivity of the workforce to attracting and retaining top talent. The challenge is that claims-driven plan costs are going up like everything else.
In 2023, Medavie Blue Cross observed an increase in drug claims cost at 5.9%. This increase was driven by the growth of specialty drug claims by 3.7% and traditional drug claims by 7.0%. Although specialty drugs represented only 1% of total claims, they accounted for 33% of the total claims cost.
Rising Drug Costs have Plan Sponsors Worried
It is little wonder that drug plan costs are a major concern for plan sponsors. This was validated by the 2023 Benefits Canada healthcare survey, which found that:
- 26% of plan sponsors were “worried about the sustainability of their drug plan” due to rising costs
- 60% reported their health benefit costs increased in the past three years
- 88% of plan sponsors who responded say “more needs to be done to reduce the cost burden of specialty drugs.”
- 77% of plan sponsors “were concerned about their plan’s ability to continue covering higher-cost drugs”
Rising Drug Costs have Plan Sponsors Worried
It is little wonder that drug plan costs are a major concern for plan sponsors. This was validated by the 2023 Benefits Canada healthcare survey, which found that:
- 26% of plan sponsors were “worried about the sustainability of their drug plan” due to rising costs
- 60% reported their health benefit costs increased in the past three years
- 88% of plan sponsors who responded say “more needs to be done to reduce the cost burden of specialty drugs.”
- 77% of plan sponsors “were concerned about their plan’s ability to continue covering higher-cost drugs”
What can employers do to control the costs of drug claims while ensuring their benefits package meets diverse workplace needs?
Fortunately, there are plenty of options available. Among them is managed formularies, which can be a strategic solution when properly implemented. In 2023, the average eligible claim amount for non-managed plans grew 4.5% compared to managed plans (3.7%) during the same period.
Pharmacy Benefit Checklist for Plan Sponsors
Does your formulary model align with your plan philosophy?
Is your drug plan consistently reviewed for clinical effectiveness, cost effectiveness, safety and adverse effects, and health equity implications?
Can new, evidence-based drugs be introduced to optimize your plan in a financially sustainable manner?
Are the cost management tools restrictive or flexible?
Are Prior-Authorization (PA) processes transparent, objective, timely, and aligned with formulary management?
Do you get direct access to integrated health and drug insights to inform your decisions?
Questions to ask to future-proof drug benefit plans
The Plan Sponsors’ Guide to Drug Formularies and Prior Authorization, published by Benefits Canada and sponsored by Medavie Blue Cross, recognizes that not all drug formularies are created equal. The guide provides best practices for group benefits formulary management to ensure appropriate coverage and minimize plan sponsor risks. This helpful guide includes questions plan sponsors should ask of themselves and their insurers to ease the cost burden of drug claims and future-proof their benefit packages.
Almost all (99.9%) of our drug plans include a Prior Authorization process. When PA is integrated into a comprehensive benefit plan strategy, it helps to ensure appropriate usage, enable continuous evaluation of treatment effectiveness, and ultimately help keep drug plans financially sustainable.
Our Value Proposition as a Pharmacy Benefit Manager
As a fully integrated insurer and Pharmacy Benefit Manager (PBM), Medavie Blue Cross has comprehensive oversight of all benefit lines without third-party engagement. This enables faster implementation of drug solutions, greater transparency, and unique expert-led insights to make evidence-based decisions.
Our Value Proposition as a Pharmacy Benefit Manager
As a fully integrated insurer and Pharmacy Benefit Manager (PBM), Medavie Blue Cross has comprehensive oversight of all benefit lines without third-party engagement. This enables faster implementation of drug solutions, greater transparency, and unique expert-led insights to make evidence-based decisions.
Our advantages include:
- Leading claims technology: We leverage digital and claims adjudication technologies developed in-house to offer innovative member support tools and a responsive and flexible point-of-sale claims adjudication system.
- Pricing: Our product listing agreements (PLAs) and Pharmaceutical Partnership Strategy enable us to secure competitive pricing for our clients while giving them a wide range of options in their plan design without limiting choices.
- Health equity: We consider health equity in our approach to drug plan management, ensuring standard inclusions such as gender affirmation benefits, family-building coverage, comprehensive women's health support, obesity management, and chronic disease drugs.
- Expert Oversight: Our formularies have expert oversight by our independent Medication Advisory Panel, an industry first, when it was established in 1994. The panel evaluates new drugs entering the market from a plan sponsor’s perspective for clinical and cost-effectiveness, safety, and affordability, as well as patient preferences.
- Independent, agile, and adept: Unlike the Canadian Drug Agency (CDA), our Medication Advisory Panel’s approach is less restrictive and more responsive to specific plan needs. The focus is on formularies with flexibility, cost optimization, and alignment with plan sponsor objectives.
- Integration and effectiveness: Our pharmacy benefits seamlessly integrate with overall benefit plans, offering enhanced mental health coverage and much more.
Rxperience: Value-Driven Drug Plan Management
Say goodbye to one-stop-shop approaches
In today's dynamic private payer industry, drug plan management demands a tailored approach. Rxperience provides the right mix of drug plan management tools that results in value-driven medication coverage and a positive member experience. Rxperience stands apart with its industry-leading formulary for new and emerging treatments. It encompasses:
- Open coverage for traditional non-specialty benefit coverage and efficient management of specialty high-cost medications.
- Standard features include Mandatory Generic Substitution for multi-source brand drugs, Prior Authorization for high-cost medications, Specialty Case Management, Biologic Savings Approach, and extensive coverage for chronic diseases and mental health conditions.
- Flexible options to incorporate additional plan management features customized to meet specific needs, thereby reducing costs.
Resources
Connect with your Medavie Blue Cross representative to learn more about our innovative offering to help plan sponsors manage drug costs efficiently and effectively.
You can also read this Insights blog, which describes our unique solutions and capabilities as our own pharmacy benefit manager in more detail.
Download the Plan Sponsors’ Guide to Drug Formularies and Prior Authorization, published by Benefits Canada and sponsored by Medavie Blue Cross.
Medavie Blue Cross is a premier all-in-one carrier that provides health, dental, travel, life and disability benefits and administers federal and provincial government-sponsored health programs. Together with Medavie Health Services, we are part of Medavie, a health solutions partner committed to improving the wellbeing of Canadians. We are in the...