The effect of high costs on plan sponsors

As high-cost drugs continue to plague plans, what are sponsors thinking?

The effect of high costs on plan sponsors
What goes up must come down – and as drug claims sky rocket, plan sponsors’ confidence is plummeting.

It’s leading many plan sponsors to worry about the long term viability of their plans.

“These rising drug plan costs have many plan sponsors concerned with the sustainability and affordability of their group benefits plans,” said Loretta Kulchycki, Vice-President, Group Marketing at Great-West Life.

Prescription drug benefits play a significant role in the overall health and well-being of an organization’s employees, contributing to a more productive and satisfied workforce.

But the costs of keeping these plans might be proving too much.

Over a five-year period (2008 - 2013), IMS Brogan reported that biologic and specialty drug costs by pay-direct private drug plans in Canada grew from approximately 12 per cent of total drug spending to approximately 21 per cent of total drug spending ($1.3 billion).

“As the prescription drug landscape evolves, plans will need to keep pace,” said Kulchycki. “Issues like provincial drug reform and new high-cost biologic and specialty treatment options are presenting challenges and opportunities for drug plan management. For example, new high-cost breakthrough treatments for Hepatitis C are poised to significantly drive drug spending increases over the next few years.”