PharmaCare 2020

Barbara Walman

Assistant Deputy Minister

Pharmaceutical Services Division

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Outline

Welcome BC PharmaCare Program

Quick overview Current State & Trends Observations ~

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BC PharmaCare

BC PharmaCare Program

Primarily a publically funded drug insurance program Prescription drugs and designated medical supplies

2011/12 820,000 beneficiaries Approximately 30 million claims Almost $1 billion in benefits

2011/12 budget = $1.140 billion

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Plan B4.7%

Plan C30.5%

Plan D0.1%

Plan F0.5%Plan G

2.6%

Plan I58.9%

Plan P1.8%

Plan S0.9%

11/12 Total PharmaCare Expenditure by Plan (Millions)

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Fair PharmaCare Fair PharmaCare provides coverage for eligible prescription drug

and medical supply costs based on a family’s net income. Families pay 100% of costs until they reach their annual deductible,

at which time PharmaCare begins paying 70% of costs and the beneficiary the other 30% as a co-payment. There is no deductible for lower income families.

When the family maximum is reached (2% to 4% of net income), PharmaCare covers 100% of eligible costs.

All BC families are encouraged to register for Fair PharmaCare since families who do not register are assigned an annual default deductible/family maximum of $10,000 per family member.

As of January 1, 2013, 1.2M families were registered under the plan.

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Other PharmaCare Plans Plan B – permanent residents of licensed residential care facilities Plan C – individuals receiving BC income assistance Plan D – patients with cystic fibrosis Plan F – disabled children registered in the At Home Program Plan G – patients for whom the cost of psychiatric medication is a

significant barrier to treatment Plan M –medication management services provided by pharmacies Plan P – patients who wish to receive palliative care at home Plan S – nicotine replacement therapies under the Smoking

Cessation Program Plan X – anti-retroviral drugs provided through the BC Centre for

Excellence in HIV/AIDS

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Highlights (examples): Pharmaceutical Services Act ~ proclaimed in May/12

New pricing regulation specific to generic drugs Research/Developing an EDRD Framework Improvement of the drug review process Do Bugs Need Drugs? (education) Provincial Academic Detailing PharmaNet Modernization project

Includes ePrescribing

BC Trends: Total Claims Expenditures (All Plans: B, C, D, F, G, I, P, and S)

FY 07/08 FY 10/11 FY 11/124 Yr %

Chg1 Yr %

Chg

Total Claims (millions)24.08 28.03 29.77 24% 6%

Beneficiaries (millions) 0.79 0.79 0.82 3% 3%

Ingredient Cost Paid ($M) $690.55 $784.36 $767.47 11% -2%

Professional + Capitation Fees Paid ($M) $171.20 $187.94 $215.29 26% 15%

Total Amount Paid ($M) $861.75 $972.30 $982.76 14% 1%

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BC PharmaCare Total Annual Expenditure

2005

/2006

2006

/2007

2007

/2008

2008

/2009

2009

/2010

2010

/2011

2011

/2012

$0

$200

$400

$600

$800

$1,000

$1,200

$867$913

$947$989

$1,032$1,093 $1,109

Total Annual Expenditure

Mil

lion

s ($

)

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CIHI - Changing Look of the Health Care System

60%

9%

9%

9%

13%

1975

Hospitals and Physicians Drugs Other Professionals Other InstitutionsOther Expenditures

SourceNational Health Expenditure Database, CIHI.

44%

16%

11%

11%

19%

2012

The Challenge We Face

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$8.7$9.7 $10.2 $10.5 $10.6

$11.4$12.1

$13.0 $13.3$13.9

$14.6$15.6

$16.2$16.8 $17.3

$8.5

$9.6

$10.4 $10.4 $10.8

$11.7 $12.1

$13.2

$13.9

$14.6

$15.4$16.3

$17.0$17.6

$18.1

38.1% 39.0%40.6% 41.6%

43.0% 43.2% 43.0% 44.2% 43.9% 44.5%45.6%

46.5% 47.8%49.3% 49.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

5

10

15

20

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15

% o

f CRF

Billi

on$

Ministry Actuals Ministry Estimates

Provincial Government Health Expenditure estimates/health function CRF Health Function as % of total CRF

Note: 2011/12 CRF Total adjusted for Reimbursement of HST Transition Funding ; 44.5% if not adjusted

Health Care Sustainability/Affordability

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

0

10

20

30

40

50

60

70

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$ B

illio

ns

Base Expenditure

General Price Inflation

Pop Growth

Utilization

Health-related Inflation

Holding at 8.4% of GDP

At 8.4%+0.05% points

Pop Aging

Source: HMB2011_122, HSP, Ministry of Health

BC public health expenditure was estimated at 8.4% of GDP in 2010. It has grown an average of 0.09 percentage points (as a % of GDP) since 1981.

At 8.4%+0.09% points

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The Current System

1. Health promotion and disease prevention

2. A province wide system of integrated primary and community care

3. High quality and accessible hospital care

Improved innovation, productivity and efficiency across the system

The Innovation and Change Agenda

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Observations ~ Questions

New ADM~

WOW!

&

REALLY?

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Statement: Drugs are the 2nd highest cost in Health Care. Cost control ~ “move the dial” = drug reform

Generic: lower and lower prices as a % of brand Low Cost Alternative/Referenced Priced programs Product Listing Agreements with Manufacturers Pan-Canadian Alliance(s): Top 6 generics~ 18% brand Formulary management:

Product listing decisions are evidence base & cost effective Driving more and more product through Special Authority

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Continued: Expensive Drugs for Rare Diseases

“willingness to pay” research underway Developing a framework to help decision making

New, newer, newest…. Personalized medicine Subsequent entry biologics Orphan drugs Catastrophic illnesses

Drug shortages Working with jurisdictions to track and manage

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COMPLEXITY ~ from a public plan perspective Supply chain~

Very, very complex business model Manufacturing ↔ Wholesale ↔ Pharmacy Includes rebates, incentives, clinical services,

mark-ups, business practices, etc.

☼ On top of business model: We need to define government’s role ~ In supply chain In pharmacy/business With pharmacists

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INTEGRATION ~ How do we integrate effective, efficient and safe

drug use into the primary health care continuum? Need to move from a cost driven model to an outcome

focussed model Educate prescribers, other healthcare professionals,

patients and public on: the optimal use of drugs to achieve improved health outcomes in a fiscally responsible manner

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Ability ~

Affordability Sustainability Accessibility Accountability

There are many opportunities for us to work together on these key principles ~ for improved health outcomes for Canadians.

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Thank you.

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