| FROM THE TEAM
As we move into April, we are reminded why managing prescription drug benefit plans needs to be an active as opposed to a passive undertaking. In the last few weeks, we have seen the approval of the first oral Multiple Sclerosis (MS) therapy in Canada, Ontario preparing to move generic drug prices down to 35% of brand costs on the private sector as of April 1, the release of generic esomeprazole (Nexium) and anticipation that Nova Scotia will be introducing new drug pricing reforms at any time.
Interestingly, we have seen a number of plans in the first quarter of 2011 that saw declining generic drug penetration in 2010 compared to the previous year. This is further proof that simply sitting on the sidelines and hoping for cost containment is wishful thinking. There isn’t much benefit to lower generic prices if these products are not being used. We are seeing far too few plans with designs that can take advantage of these new pricing opportunities as a means of sustaining increasing investments in expensive, specialty (i.e. biological) products.
It has also been interesting to observe the rapid development of various Preferred Pharmacy Provider Networks across the country. Most chain and banner pharmacies have been putting together some kind of preferred provider model to bring to advisors and plan sponsors. This has been expedited by declining margins on public sector claims, and the realization that the private sector is an incredibly important segment of the market. The variation in the value these models are able to deliver for plans is remarkable – some of the offerings look quite strong, while others appear to be missing the mark profoundly.
It’s an exciting time for plan sponsors who are looking to leverage competition among vendors and providers to ensure responsible and sustained cost containment and better health outcome for members. There are an increasing number of interesting technological and clinical innovations at the vendor level, and some potentially valuable offerings at the provider level. The secret to success will be plans that are actively managing their plans, and who can embrace these changes with greater ease.
We welcome any feedback you have to our Cubic Health Monthly. You can reach us anytime at info@cubichealth.ca or on Twitter @cubichealth.
Sincerely,
Cubic Health Clinical Team
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