Medications: Private insurance plans can contain costs
With the arrival in 2010 of the generic forms of Lipitor and Crestor, some group insurance plan sponsors stopped worrying about the costs of treating hypercholesterolemia, commonly referred to as high cholesterol.
But Repatha and Praluent—two new cholesterollowering drugs known as PCSK9 inhibitors—may just get them to start paying attention again. The cost of these new drugs is estimated at around $7,500 per year, or about 15 times the cost of conventional medications (statins).
In Quebec, PCSK9 inhibitors are covered as an exceptional medication under the public drug insurance plan, and plan members must meet certain criteria before the drug is reimbursed. According to INESSS1, approximately 10% of patients with familial hypercholesterolemia will be eligible for coverage. Based on these data alone, drug plan costs would climb 1% to 2%.
Elsewhere in Canada, governments are very reluctant to include PCSK9 inhibitors in their provincial formularies. A number of insurers have introduced prior authorization rules when permitted under the contract.
But the story doesn’t end there. The huge market potential of these drugs— fact not lost on pharmaceutical companies—eans that the latter will be promoting the real benefits of these drugs not only to doctors, but also to the public. According to TELUS Health Solutions, the potential sales of PCSK9 inhibitors in Canada could grow to over $2.5 billion by 2026, which is more than the cost of statins. Therefore, for this drug alone, plans that have open access provisions pertaining to covered drugs can expect to see a 3% to 5% increase in the longer term.
This should hammer home to plan sponsors the importance of containing their health plan costs. Insurers have introduced a number of measures to limit access to expensive drugs or control costs. Sponsors are sometimes reluctant to implement such measures as they want their employees to appreciate their plan.
One solution is pre-authorization, which is an approach that restricts access to costly drugs only to plan members who meet specific criteria.
Sponsors must understand that this is a more cumbersome process that interferes with the doctor-patient relationship. This option, which sometimes requires union approval if the plan is subject to bargaining, must be well explained and communicated to members. Its implementation can be facilitated if insurers provide plan members with tools for real-time access to information about which drugs are covered and which ones have restrictions; this would help encourage informed, open discussions in the doctor’s office, when the physician is prescribing the medication. In the case of PCSK9 inhibitors, this is the approach taken by the Quebec public plan and offered by some insurers.
Given the mass influx of expensive drugs, it is well worth taking the time to have meaningful discussions with the various stakeholders involved in order to understand the issues surrounding the plan’s sustainability, determine whether policy clauses need to be changed, strengthen cost control mechanisms as needed, examine which prevention techniques to use and their ROI, review risk pooling measures, focus on establishing clear communication with employees and align premium-sharing arrangements with the organization’s overall compensation strategy, among other things.
Sponsors have their work cut out for them, and they will need courage to deal with these challenges. The most successful companies will be those that consult and collaborate with the various stakeholders to make the most informed choices.
1 INESSS: Institut national d’excellence en sante et en services sociaux (in Quebec)