Bill 102: how will it affect plan sponsors?

The new “Conditional Listing” and “Exceptional Access” sections in Bill 102 will hasten approval for formulary drugs, making access to brand and generic drugs easier. As more generic drugs are approved, Pellegrini said an employer could potentially save between 2% and 5%. “There will be much more opportunity for plan sponsors to now take advantage of more generic substitutions,” said Pellegrini. Before Bill 102, she continued, there were about 200 drugs that could not legally be substituted for a generic because they were not on the Ontario Drug Benefit(ODB)formulary or the generic was not provided in the same dosage form.

However, companies will have to pay out if they have older staff. For active employees age 65 and over, employers will pay an estimated $1,200 to $1,400 per insured individual, as the ODB will now become the second insurance payer for those 65 and over with private plans.

Value for money

Maintaining the bottom line may not be the case for private plan sponsors, as drug prices may not be in their favour. The government’s prices for formulary drugs will not necessarily apply to private plans, said Pellegrini, and brand drugs could see a price increase(up to limits of the Patented Medicine Prices Review Board).

“And there is no provincially or federally legislated limit on generic drugs,” said Pellegrini. “The 50% ceiling stipulated [in Bill 102] does not apply to prices or private plan sponsors.”

There is also no limit to the professional allowances paid to the pharmacist by the manufacturer. This means private plan sponsors could potentially pay more. “Where the government will theoretically achieve lower prices by legislating this allowance to 20%, there is no such opportunity for private plan sponsors,” she said.

The cost impact on plan sponsors will depend on the drug plan manufacturers and any adjustments they make to their prices. Pellegrini said Mercer is currently conducting a study to monitor drug prices. Estimates now range from a 10% to 20% increase, or some prices may not change at all, she said.

Appropriate use of drugs

To help promote appropriate use of drugs, Bill 102 introduces a set payment schedule for specific pharmacy services. “In some private plan management processes, a professional fee is allowed in exchange for pharmacist support of these programs,” said Pellegrini. Pharmacists have expressed concern over the inconsistency with these programs from one benefit plan to the next, said Pellegrini. Bill 102 provides templates for more consistent professional standards for plan sponsors to use at their discretion for similar types of support, she said.

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