Growing drug plan costs are putting pressure on benefits plan sponsors to move to managed formularies—but industry stakeholders must first work together to change the drug evaluation process to ensure coverage decisions deliver the best value.

“Plan sponsors want to move to a model where their drug plans only pay for effective and affordable drugs,” says Suzanne Lepage, private health plan strategist and moderator of the 2012 Canadian Leadership Council on Drug Evaluation, held in Toronto on June 22. “What we often hear is, ‘If two drugs are equally effective, then why not pick the cheapest one?’ The challenge is that ‘effective and cheapest’ do not always mean the most cost-effective.”

An easy-to-understand summary of the disease behind the drug, written with the plan sponsor in mind, is one missing component to drug evaluations. Employers need “to understand that we’re not just talking about ’this drug.’ We’re talking about its impact on the disease,” says Martin Chung, council member and assistant vice-president of strategic health management with Equitable Life of Canada.

Linking drug claims data with absenteeism, disability and, if possible, productivity data is also vital to gaining a clear understanding of a drug’s potential impact on employee health. Collaboration between stakeholders is a necessary first step to overcome existing barriers to data integration.

“The more we integrate with pharmacy, with manufacturers, with advisors and others, the more we are aligned and the better the solutions we can ultimately bring to plan sponsors,” says council member Ben Harrison, manager of group strategic relationships with Great-West Life. “We do not want to wait for them to come to us to fix a problem, because often their answer is, ‘We’ll just cut it.’”

The results are well worth the effort, stresses the council. “When we’ve aggregated the data, the results are a real eye-opener for employers,” says Connie Wong, member of the council and director of pharmacy benefits with Manulife Financial. “The findings inevitably force a redirection of resources for health and wellness. It also definitely focuses employers back on to chronic disease, which has almost taken a backseat to some of the new expensive drugs that have come to market.”

The leadership council also discussed how to tailor and standardize drug-evaluation submissions, stressing that public payers use significantly different decision-making criteria.

For details on the council’s recommendations, look for the printed report in the September issue of Benefits Canada.

Copyright © 2022 Transcontinental Media G.P. Originally published on

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