There is an aspect of drug plans that we have taken for granted. As employers, we rely on pharmaceutical companies and Health Canada to make and approve the drugs we need – and ideally manage or control the pricing of these drugs. That said, this does not guarantee that the drug itself that you take is affective or even efficient in terms of the cost-benefit of that drug. Of the 10,000 drugs available in most drug plans your doctor is likely familiar with an average of about 50.
Have doctors done the study and the research to determine which drugs are better than others? Other than wanting the best for their patient, they do not have an awareness necessarily for the cost of that drug versus another one. Aside from allowing the substitution of generics where appropriate, there may be seven brand drugs that treat the same illness – but have a large variance of effectiveness.
Given the overall cost of health care on employer sponsored plans, it makes total sense that only the most cost-effective drugs would be reimbursed at the highest level. The decision of what drugs are included cannot be made by the employer. A third party is sourced to make these difficult decisions.
Assuming we do not have an unlimited budget for drugs, it would make sense that someone is paying attention. We believe that “managed formularies” are an approach that should be considered on every benefit plan. It doesn’t mean that we think they are right for everyone, but it does make sense to consider it. We have a process to determine if they are appropriate for your plan.
There is more analysis required on your benefit plan to determine whether there is a lot of money being spent on inefficient or ineffective medications. Managing these choices and reimbursements is potentially going to result in a real range of savings.
Is that savings enough to make it worthwhile? Do we want to risk an impact on morale or “employee experience” as it relates to our benefit plans? Up to now we have ignored this but we think it’s time to have this conversation with your benefits consultant.