Towers Watson launches drug plan coalition

Essentially a three-way agreement between Towers Watson, participating employers, and Green Shield, the Canadian Rx Coalition offers drug plan sponsors a range of options in managing pharmacy costs, such as collaborative purchasing and improved transparency of the deal terms available to them through their pharmacy benefits manager. Other services included drug utilization management, disease management and formulary development.

For a fee—which is based on the size and flexibility of the participating organization—clients get membership privileges such as strategic pharmacy consulting and pharmacy management strategy.

“The majority of working Canadians and their families depend on corporately-sponsored health benefits to ensure affordability of the prescription drugs they need,” says Wendy Poirier, director of the Canadian health and group benefits practice at Towers Watson. “But today, the Canadian pharmacy industry is at a crossroads. Prescription drug plan costs have continued to escalate over the last two decades, translating into a drug tab costing billions of dollars each year. The new Canadian Rx Coalition will enable participating organizations to better manage their drug plans, to the benefit of both employers and their employees.”

According to Poirier, the benefits of membership include:

• transparency in drug pricing, vendor contracting and reporting;
• efficiency and immediate cost savings through improved management, reduced or eliminated administrative error and more effective coordination — without the need to change plan design;
• access to flexible, rules-based administrative systems that provide specialized design features and coordination with government programs, including new regulations that could have a significant impact on drug costs;
• new delivery models such as preferred providers and carved-out drug plan options;
• design support for active pharmacy benefit and clinical management;
• improved therapeutic results and value to patients through managed programs and formularies; and
• collaborative bargaining to gain a stronger position and industry voice.

Towers Watson explains that while prescription drug costs in Canada continue to rise, drug expenditure per capita has soared, with Canada now ranking second only to the United States, according to the Canadian Institute for Health Information. Canada’s total drug spend is now more than $30 billion, of which approximately $25.4 billion (84%) is for prescription drugs, translating into a $14 billion drug tab for employers.

However many of the drivers of increasing costs remain “invisible” to employers, such as pharmacy rebates and other aspects of drug pricing. At the same time, Canadian drug plan sponsors often encounter design and administrative challenges, including vague descriptions of what is covered for employees, inconsistent adjudication, lack of incentives and processes to improve generic dispensing rates and inefficient prescription re-supply practices.

“There is a growing awareness of the need to make the pharmacy benefit system more flexible and accountable, not only to reduce costs but also to improve patient outcomes,” says Poirier. “By launching the Canadian Rx Coalition, we’re starting this process, so that employers can better manage their programs, obtain fair pricing deals and encourage a healthier, more productive workforce.”

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