IT’S BEEN A MONTH OF FERVENT DEBATE CONCERNING Ontario’s Bill 102, The Transparent Drug System for Patients Act. First, George Smitherman, Ontario’s Minister of Health and Long-term Care, touted the bill, aimed at reforming the province’s drug system, as a means of creating a fair drug system which provides “the right drug to the right patient at the right price.” Next, Marc Kealey, chief executive officer of the Ontario Pharmacists Association (OPA)in Toronto weighed in. Drawing a parallel between Minister Smitherman and a gospel preacher seeking a “hallelujah” from his chorus, Kealey said there would be no hallelujahs. The OPA has made its position clear: it has “significant concerns about the real impact of the bill.” Kealey is particularly alarmed about the proposed reduction in allowable price mark-ups by pharmacists to 8% from 10%, up to a maximum of $25—a change that will make it cost-prohibitive for pharmacists to stock high-cost drugs. He warns patients could end up seeking medication in hospitals.

Where are plan sponsors in all this? The news is positive. Three of the main proposals: off-formulary interchangeability, modifications to the pharmacy structure and the rapid review of breakthrough drugs all appear—in large part—to reduce the burden of drug costs for employers. “Those price points, the way they’ve described them today, would result in some flow-through of savings—the magnitude of which is yet to be determined,” says Laura Mensch, leader of the Health Strategies Practice for Aon Consulting’s Central/Western Region in Toronto.

With the interchangeability measure, brand name medications would no longer have to be listed on the Ontario Drug Benefit (ODB)formulary for generics to be considered equivalents. This would make cheaper generic drugs more interchangeable with higher-cost brand name drugs, increasing their usage and saving sponsors an estimated $30 million.

The proposed change to the pharmacy reimbursement structure, which has the OPA up in arms, also means that prices for medications would drop. And that would mean more money in the pockets of plan sponsors. But if Kealey’s dire predictions concerning the sale of high-cost drugs come true, sponsors could end up covering hospital-prescribed medication.

The rapid review of “breakthrough” drugs and the introduction of a conditional list that integrates payment criteria onto the drug formulary appear to be positive for employers who offer post-retirement programs. Seniors will enjoy a more streamlined process and drugs should be added more quickly to the provincial formulary, says Sandra Pellegrini, a principal with Mercer Human Resource Consulting in Toronto. “The administrative barriers that cause drugs to be picked up by the private sector(private drug plans or out-of pocket costs) should be significantly alleviated.”

RETIRING BENEFITS
The area of employer concern in Bill 102 is around working seniors. The bill states that the Ontario government would become second-in-line payer for working seniors with private insurance plans. That means that if at age 65 an employee elects to continue working, an employer would be solely responsible for covering their drug costs—not the ODB. That’s a far cry from the current situation in which the employer and the province share these costs. “They’ve(the government)completely offloaded their first-line accountability,” says Mensch.

For now, Minister Smitherman seems to holding firm in his resolve to pass Bill 102. And this has OPA’s Kealey equally determined to make changes. “When our own Minister George Smitherman took to the pulpit five weeks ago and shouted to the world: ‘Bill 102,’ he expected that the congregation would rise up together and shout back ‘Hallelujah,’” he says. “It hasn’t happened that way.”

It certainly hasn’t. But for plan sponsors, Bill 102 might not be so bad after all.

Anna Sharratt is managing editor of BENEFITS CANADA. anna.sharratt@bencan-cir.rogers.com