overview of industry trends in health benefit...

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Overview of Industry Trends in Health Benefit Management

Suzanne Lepage, Private Health Plan Strategist May 10, 2017


Industry Trends 1. National Pharmacare

2. Patented Medicine Prices Review Board (PMPRB) Reform

3. Pan-Canadian Pharmaceutical Alliance (pCPA)

4. Medical Marijuana

5. Genetic Testing – Bill S-201

6. Ontario – Enhanced Trillium Drug Program Coordination of Benefits

7. Ontario - OHIP+ Children and Youth Pharmacare


National Pharmacare


National Pharmacare

• Only developed country in the world with a universal healthcare program that doesn’t include prescription drugs

• Patchwork of public and private drug coverage • Last 15 years - several federal proposals • Current federal government focus: reducing costs of

prescription drugs vs introducing a national pharmacare program

What is Pharmacare?

“…a single-payer system with a publicly accountable management agency to secure the best health outcomes for Canadians from a transparent drug budget.”

Pharmacare 2020 : http://pharmacare2020.ca/assets/pdf/Moving_From_Principles_To_Policies.pdf

http://pharmacare2020.ca/assets/pdf/Moving_From_Principles_To_Policies.pdf




National Pharmacare

Pharmacare Advocates • Patients go without medication due to cost

• Current reimbursement systems are not sustainable

• Private plans are costly and inefficient

Morgan, S.G., D. Martin, MA Gagnon, B Mintzes, J.R. Daw, and J. Lexchin. (2015) Pharmacare 2020: The future of drug coverage in Canada. Vancouver, Pharmaceutical Policy Research Collaboration, University of British Columbia.

Alternate perspectives • Access to public programs for financial

assistance for catastrophic expenses above a threshold percentage of income

• Only a small % (~100,000) have no formal drug plan

• Pharmacare may reduce access for 24M with private drug plans

Skinner et al. Pharmacare: what are the costs for patients and taxpayers? (2015)


National Pharmacare



House of Commons Standing Committee on Health Study on Development of a National Pharmacare Program

• Multi-partisan committee of parliament that examines healthcare issues

• Operates at arm’s length from the Ministry of Health

• Debating pharmacare over the past year

• Received 26 briefs and heard 87 witnesses


House of Commons Standing Committee on Health Study on Development of a National Pharmacare Program

• Pharmacare would result in access restrictions and limit choice

• Private insurers generally provide access • to more drugs than public plans • to new drugs more quickly than

public plans

• Best solution leverages strengths of public and private sectors and brings them together in a coordinated way • Allow private insurers to join the pCPA • Reform to the Patented Medicines Prices

Review Board (PMPRB) • Work together to develop a common

approach to providing access to orphan drugs

Canadian Life & Health Insurance Association (CLHIA) (May 9, 2016)

CLHIA OPENING REMARKS TO HOUSE OF COMMONS STANDING COMMITTEE ON HEALTH STUDY ON THE DEVELOPMENT OF A NATIONAL PHARMACARE PROGRAM https://www.clhia.ca/domino/html/clhia/clhia_lp4w_lnd_webstation.nsf/4b9ffde42507452b8525791b0069e13b/2c62d4df6861a9d185257fd900637094!OpenDocument


National Pharmacare What is the true cost?

Savings through National Pharmacare:

Universal public drug coverage would reduce total spending on prescription drugs by $7.3 billion

Morgan et al. Estimated cost of universal public coverage of prescription drugs in Canada (2015);

Increased costs of National Pharmacare:

Immediate $14.1 billion gap that governments would be required to address

Canadian Life and Health Insurance Association. CHLIA Report of Prescription Drug Policy (2012)

Shift costs from private to provincial plans

Shift at least $13.2 billion in annual costs from the private sector onto Canadian taxpayers


Shift costs to Federal Budget

Federal Pharmacare would shift $25.5 billion off provinces and private sector onto federal budget. Skinner et al. Pharmacare: what are the costs for patients and taxpayers? (2015)


National Pharmacare

• Could displace private drug insurance business: 18,799 jobs worth over $1.3 billion in lost incomes annually1

• Could reduce access for 24M with private drug plans1

• Will employers be able to top up government programs?

• Will there be additional taxation for employers to fund programs?

1 - Skinner et al. Pharmacare: what are the costs for patients and taxpayers? (2015)


Patented Medicine Prices Review Board (PMPRB) Reform


What is PMPRB? • Federal Agency established 1987

• Regulates maximum list price a pharmaceutical company can sell a brand name drug

• Does NOT regulate

• Generic drug prices

• Retail price (e.g. markups or dispensing fees)

• Price can never be higher than highest international price of: France, Germany, Italy, Sweden, Switzerland, UK and USA

• Key factors: • Therapeutic improvement relative to standard of care • Therapeutic class comparators • Canadian prices of comparators • International prices

• Drug prices cannot increase by more than the Consumer Price Index (CPI)

• If a drug is excessively priced PMPRB hearing can order price reduction and/or require excess revenues be paid back


Pricing – International comparisons • Many countries reference other countries’ prices • Complex and constantly changing • Requires active monitoring and management • Significant financial implications • May delay or forego product launch in a country if

international impact determined to be net negative • Canadian pricing teams must consider impact of

Canadian prices on other countries • Price often a global head office decision


Why PMPRB Reform?

• PMPRB consultation on guidelines reform • Discussion Paper and public submissions (2016)

Objectives: • informed discussion on changes that have taken place in the operating environment • identify areas of the guidelines that may be particularly in need of reform • encourage public participation to obtain a diverse array of viewpoints PMPRB Guidelines Modernization – Discussion Paper – June 2016

“Recent and significant changes in the Patented Medicine Prices Review Board’s (PMPRB) operating environment necessitate corresponding changes to modernize and simplify its regulatory framework.”

67 Submissions as of deadline (October 31, 2016)


PMPRB Reform

"There is no question that the current status is not fair, that it's not right, that we're paying much higher prices than other countries are and that's exactly what I'm working on," she said. "Canadians are going to see that we are going to be able to save [them] in the order of billions of dollars per year."

Federal Health Minister Jane Philpott – CBC Fifth Estate January 2017

“Improving access to prescription medications, lowering drug prices and supporting appropriate prescribing through an investment of $140.3 million over five years, starting in 2017–18, with $18.2 million per year ongoing, for Health Canada, the Patented Medicine Prices Review Board and the Canadian Agency for Drugs and Technologies in Health”

Federal Budget 2017

http://www.budget.gc.ca/2017/docs/plan/chap-03-en.html#Toc477707430









CLHIA Submission to PMPRB Highlights • Adjust comparator countries • Strive for lowest possible price • Affordability threshold • Value for money metric • Periodically review prices as market changes • Re-evaluate how funds returned via voluntary compliance undertakings (VCUs)

CLHIA response to PMPRB Guidelines Modernization Discussion Paper: https://www.clhia.ca/domino/html/clhia/CLHIA_LP4W_LND_Webstation.nsf/page/E9C772B99FCDB4FB8525805700727F7C/$file/CLHIA%20response%20to%20PMPRB%20Modernization%20Consultation%20-%202016.pdf

https://www.clhia.ca/domino/html/clhia/CLHIA_LP4W_LND_Webstation.nsf/page/E9C772B99FCDB4FB8525805700727F7C/$file/CLHIA response to PMPRB Modernization Consultation - 2016.pdf


PMPRB Reform – Next Steps • Public Policy Hearing (Dates TBD) • Publication of proposed changes to Guidelines (Date TBD)

PMPRB Guidelines Modernization – Discussion Paper – June 2016


pCPA - Pan-Canadian Pharmaceutical Alliance


What is pCPA?

• Joint confidential negotiations for drugs for publicly funded drug programs ONLY

• CLHIA lobbying for private payers to be included in negotiations


http://www.pmprovincesterritoires.ca/phocadownload/pcpa/stakeholder_session_for_patient_groups_pcpa_office_implementation_june_16_2015_final.pdf

Scope of pCPA Process




What is pCPA? • “Generic Value Price Initiative” lowered prices for certain generic drugs for all

Canadians • “Biosimilars First Principles” may lower prices for all Canadians

• Biosimilars must provide a reduction in the drug’s transparent price to benefit all Canadians.

• Reference biologics must – Provide overall national value to public drug plans and do not result in incremental

costs to individual jurisdictions and – At least similar overall value compared to biosimilar and – Similar or better transparent price reductions for equivalent listing


Did you say lower drug prices?

Why not have private plans be part of pCPA?


Considerations - Private Plans joining pCPA Private plans may • be required to harmonize drug plan designs • be limited by government listing recommendations • cover fewer drugs • face listing delays

pCPA negotiations – Listing Delays 1

• 40% of drugs remain at six months

• 25% remain at nine months

• Two drugs beyond one year

1 - Research conducted by Roubaix Strategies Inc (as of December 31, 2016)



Considerations - Private Plans joining pCPA



• have different objectives than government plans • be first and only payer (in pCPA for certain drug and competitor(s) or province(s) are not)



Scope of pCPA Process






• have different objectives than government plans • be first and only payer (in pCPA for certain drug and competitor(s) or province(s) that are not) • lose competitive advantage • may get less savings than individual negotiations • potential to dilute overall potential savings due to consensus based negotiating • require additional resources to manage pCPA participation


Potential Impacts of Private Plans joining pCPA?

• Would private plans be better served by negotiating their own agreements with pharmaceutical manufacturers?

• Individually (e.g. Remicade)

• Collectively (buying group)

Potential Challenges

• Competition Law

• Harmonization of plan designs

• Reduced competitive advantage

• Resourcing and expertise


Medical Marijuana


Medical Marijuana • Approved for use since 1999 • New regulations around supplying it • Access to Cannabis for Medical Purposes Regulations

(ACMPR) (August 2016) • Health Canada licenses producers • Medical use must be prescribed by Doctor • Health Canada hasn’t reviewed for safety and

effectiveness, approved for therapeutic use or assigned DIN

• Shoppers and Loblaw's employee coverage max $1,500/year for MS and Chemotherapy

Legalizing Marijuana • BILL C - 45 – CANNABIS ACT (April 13, 2017 ) • Framework for regulation of the production,

distribution, sale and possession of cannabis in Canada

• Provides regulations for recreational use - similar to alcohol and tobacco

Background


Medical Marijuana • Not currently covered under traditional drug

benefits, may be eligible in HCSA • Little evidence regarding the relative costs/benefits

of medical marijuana use • Review workplace policies around the safe use of

medicinal marijuana • Review disability plan for reimbursement as a

rehabilitation program expense • Medical use - duty to accommodate- human rights

legislation • Potential impairment on the job - safety-sensitive

positions

Legalizing Marijuana • Review occupational health and safety policies -

clarification of drug, alcohol, substance use policies with respect to impairment, detection and tolerance levels

• Potential impairment on the job - safety-sensitive positions

Employer Considerations


Genetic Testing Bill S-201


Genetic Testing – Bill S-201

• Prohibits requiring a person to undergo or reveal results of genetic test as condition of employment or before selling insurance

• Received Royal Assent May 4, 2017 • Minister of Justice – once parliamentary process is complete

• Government will get advice from Supreme Court of Canada to determine constitutionality

• Concerns that it intrudes on provincial jurisdiction to regulate the insurance industry


Genetic Testing – Bill S-201 Potential impact • CLHIA committed to never asking applicant for genetic tests for life

insurance applications for coverage under $250,000 • May impact private payers’ ability to request genetic test info for Prior

Authorization for certain drugs • Personalized medicine - some drugs only work for patients with a

specific genetic marker • Health Canada may only approve drug for patients with markers • Drs. may request tests • Private payers cannot ask for test results to validate eligibility for Prior

Authorization • If drug doesn’t work for those without genetic marker?

• Pay for everyone? • Don’t pay for anyone?

Example

• Cystic fibrosis (CF) caused by a variety of genetic mutations

• Kalydeco corrects defect caused by mutation (G551D) present only in 4-5% of CF patients

• ~ $300K annually

• Currently PA requests info on genetic marker


Ontario Enhanced Trillium Drug Program

Coordination of Benefits


ODB – Enhanced Trillium Drug Program COB What is Trillium Drug Coverage? • ON drug benefit for patients with catastrophic drug expenses • Apply for government coverage • Eligibility based on deductible = ~4% of household income • Quarterly deductible must be satisfied by out of pocket drug expenses • Once approved, eligible for Ontario Drug Benefit and Exceptional Access Drugs


ODB – Enhanced Trillium Drug Program COB • Currently patients submit paper receipts to Trillium to satisfy deductible • Proposed system changes will allow pharmacies to electronically submit COB claims

for Trillium patients with private insurance • Target date: Fall 2017 • Consultations ongoing - processes still to be confirmed

• May streamline integration between private plans and Trillium • May require pharmacist intervention to switch order of payment once deductible

has been satisfied • Potential that only patient will be notified or know when deductible satisfied


ODB – Enhanced Trillium Drug Program COB • To satisfy deductible ONLY out-of-pocket

expenses borne strictly by the plan member (no COB or pharma PSP)

• Deductible ~4% of household income • Median income of $78,790 = ~$3,000

per year deductible Potentially only 9% of plan members

would be eligible for Trillium1

1 - De-mystifying the Trillium Drug Program (TDP) http://assets.greenshield.ca/greenshield/GSC%20Stories%20(BLOG)/Follow%20the%20Script/2017/english/Follow%20the%20Script_Spring%202017.pdf

• Two application processes 1. Trillium – Financial Eligibility 2. Exceptional Access Program (EAP)

– Clinical eligibility • Not all private plan drugs covered by

ODB • ODB EAP criteria may be different that

private plan criteria

http://assets.greenshield.ca/greenshield/GSC Stories (BLOG)/Follow the Script/2017/english/Follow the Script_Spring 2017.pdf

http://assets.greenshield.ca/greenshield/GSC Stories (BLOG)/Follow the Script/2017/english/Follow the Script_Spring 2017.pdf


Ontario OHIP+ Children and Youth Pharmacare


OHIP+ Children and Youth Pharmacare Ontario Budget Announcement – effective January 1, 2018

• Youth < 25 years old • Universal - regardless of family income or private insurance coverage • Ontario Drug Benefit (ODB) list - 4,400 drugs • Includes Exceptional Access Program (EAP) and drugs to treat cancer and rare diseases • Government will be first payer • 100% coverage – no deductible or copayment


OHIP+ Children and Youth Pharmacare Impact on employer benefit plans • Private plans

• cover more drugs than ODB • may still be required to supplement ODB

• Savings? • What impact do claims from this age group have on drug plans?

• Reduced premiums? • Principles of insurance - do premiums for the young subsidize premiums for older plan members?


Summary 1. National Pharmacare

2. Patented Medicine Prices Review Board (PMPRB) Reform

3. Pan-Canadian Pharmaceutical Alliance (pCPA)

4. Medical Marijuana

5. Genetic Testing – Bill S-201

6. Ontario – Enhanced Trillium Drug Program Coordination of Benefits

7. Ontario - OHIP+ Children and Youth Pharmacare


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overview of industry trends in health benefit...

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