I had an opportunity over the past couple of weeks to spend some time in Western Canada meeting with insurance carriers, benefits consultants, brokers and plan sponsors. What I saw and heard, for the most part, was very encouraging, and has left me with the sense that the message that has been preached for many years about the fragility of the drug plan benefit is resonating with plan sponsors and their advisors.

The best example of what I heard comes from the oil patch. In this era of $60 barrels of oil, and $6.4 billion record profits for companies like EnCana, Calgary is the "Klondike Gold Rush" of the 21st century. Everyone has heard the horror stories of trying to recruit talent in an overheating market, so naturally who is going to be focusing on measuring and managing the performance of their employee benefit plans when finding the employees in the first place is a challenge? If filling personnel gaps is a far more urgent need than worrying about the total compensation costs, I wasn't sure what I would encounter in the west with respect to drug plan management.

Interestingly enough, I came across examples of benefit management strategies and philosophies that are leading edge in Canada. It was extremely encouraging to see prosperity breeding a proactive approach. Many of the individuals I spoke to recognized that eventually the labour market in places like Calgary would balance itself out, and should the $40 barrels of oil return, these groups know they will be stuck with whatever drug claims experience occurs in their plan between now and then. The message was quite simply that nobody could argue these are bullish times in the west, but fear of exposure to expensive biological drugs, an aging workforce with an increasing number of chronic diseases, and a number of blockbuster drug products emerging in the next few years meant that a majority of these groups recognized the financial threat that the drug benefit provides in an unmanaged environment. These groups want to optimize their plans while the going is good, not simply when they are looking to cut costs.

That mentality is a good example for plan sponsors and their advisors across the country, especially those of us who do not operate in industries that have the fabulous margins that oil and gas companies do. The drug plan management challenges faced by employers are not industry or region specific - biological drug claims, abuse of narcotics like OxyContin, downloading by the public sector, the impacts of legislation like that of Bill 102 in Ontario, suboptimal generic drug penetration, and the emergence of new products to treat diseases that were previously untreatable are all examples of what makes managing the drug benefit a complicated and specialized function.

We look forward to working with some of these western plan sponsors during these bullish times in their history to ensure the health and wellbeing of their employees both today and in the future. This can be achieved through the provision of a meaningful and well managed drug benefit, and safeguarding the financial performance of these plans to ensure that there is money left over at the end of the day, regardless of the price of oil, to provide employees with an array of useful benefits. When these groups are able to achieve the same or greater value out of their drug plan by spending 30% less than their competitors, then we will consider that a big win for everyone.

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