Canadian HR Reporter

Canadian HR RepoRteR april 6, 2015 14 FeAtures 2015 ONTARIO LAWYER'S PHONE BOOK THE MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS With more than 1,400 pages of essential legal references, Ontario Lawyer's Phone Book is your best connection to legal services in Ontario. Subscribers can depend on the credibility, accuracy and currency of this directory year after year. More detail and a wider scope of legal contact information for Ontario than any other source: • Over 27,000 lawyers listed • Over 9,000 law firms and corporate offices listed • Fax and telephone numbers, e-mail addresses, office locations and postal codes CANADA LAW BOOK ® This text is the first of its kind – designed to provide a comprehensive introduction to the topic and analysis of different policy approaches to green energy. 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Price subject to change without notice and subject to applicable taxes. Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation Perfectbound Published December each year On subscription $77 One time purchase $80 L88804-677 Multiple copy discounts available. Plus applicable taxes and shipping & handling. (prices subject to change without notice) Labour law research just got faster, easier and more comprehensive. LabourSource™ on WestlawNext® Canada combines the most robust collection of grievance arbitrations with court and board decisions, expert commentary, legislation and collective bargaining-related content – with Canada's most advanced search engine. A single search delivers the content you're looking for, whether it's case law, legislation, commentary, or legal memos. You can then filter your results to get exactly what you need. With LabourSource, you'll always be confident that your research is complete and that you haven't missed anything. Experience the benefits • Prepare winning grievance arbitrations and labour board applications • Successfully negotiate favourable collective agreements • Stay up to date on the latest labour-related decisions, industrial relations and economic news Legal content that is labour focused, not labour intensive Introducing LabourSource™ on WestlawNext® Canada See the LabourSource advantage View a demo at westlawnextcanada.com/laboursource 00224EP-A47770 BEnEFiTS Controlling rising drug plan costs Pharmacy benefit management strategies reduce waste, improve efficiencies By Bill Bright A prescription drug benefit plan is a key element in a total rewards program and it plays an integral role in employee health management. It's also the biggest component of an employer's medical plan costs. While the trend in drug plan costs has been moderate over the past several years, there are a num- ber of factors that are expected to contribute to increased costs in the future — increased use of high-cost drugs, a growing num- ber of employees and dependants with chronic conditions, and the shifting of public costs to private payers. Canadian employers remain committed to providing compre- hensive drug coverage to employ- ees but they are also cognizant of the need to manage costs. As organizations seek ways to con- trol rising health-care costs and ensure drug plans remain viable over the long term, many em- ployers have been implementing pharmacy benefit management strategies aimed at reducing waste and improving efficiencies. Cost increases Drug cost trends have been mod- erate in the past few years primar- ily because of a greater availability of lower-cost generic drugs and a lack of "blockbuster" brand name drugs entering the market. How- ever, employers are likely to see increases in the future for several reasons: •High-cost drugs are typically used by less than two per cent of employees, but can account for 20 per cent or more of an employer's total drug spend. For example, new drug therapies for Hepatitis C, while more effective at reducing the virus than prior treatments, create budget chal- lenges for employers because the typical cost is about $55,000 for a 12-week treatment. Other new drugs in the pipeline may drive costs even higher. New, high- cost therapies will account for 30 per cent or more of drug plan expenses within the next three to five years, according to Towers Watson's 2014 Canadian Health Care Cost survey. In the United States, high-cost drug spend is predicted to reach 40 per cent to 50 per cent of total drug spend by 2018. •Unhealthy lifestyles coupled with aging have resulted in an increase in chronic conditions and are likely to contribute to in- creases in employer health-care costs. In fact, claimants with diabetes have six times the num- ber of drug claims compared to those without diabetes, accord- ing to Green Shield Canada's 2014 Health Study. Similarly, claimants with high blood pres- sure have more than three times the number of drug claims com- pared to those without. •Pharmaceutical advancement is also contributing to the cost shift from public to private payers. It seems inevitable that as our un- derstanding of "the chemistry of life" grows, we will find new, better and more expensive phar- macological solutions to counter the effects of disease. e incredible innovation in can- cer treatment is a good example of this. For example, it is now possible to treat some cancers with oral medication. As can- cer treatment moves out of the hospital setting, it is no longer covered by public hospital plans — which places the financial bur- den on the private payer. Pharmacy benefit management strategies Research shows a clear correla- tion between pharmacy ben- efit management strategies and health-care cost reductions. As the prevalence of high-cost drugs increases and health-care costs and trends begin to rise, organiza- tions will need to actively manage drug benefits to mitigate the im- pact on the bottom line. ere is a wide variety of tactics employers can implement to reduce waste and improve efficiencies. e average annual drug cost per active employee at organiza- tions without a formal drug plan management strategy is $1,124, according to Towers Watson's survey. Average annual costs, however, are 24 per cent lower, or $266 less per employee, for plan sponsors that have three or more drug cost management strategies in place. Even implementing one or two techniques reduces annual costs, on average, by 12 per cent or $135 per employee. Here is a quick list of activities that can save money for future drug spending: Lower administration fees: Stop paying administration fees based on a percentage of claims cost, especially for high-cost drugs. Ask the vendor for a "per transaction" administration charge. Limit dispensing fees: Limit the number of dispensing fees paid for employees' ongoing maintenance medications. Insti- tute a policy to pay for one dis- pensing fee for each 90-day refill. reduce drug waste: Make sure employees are not throwing away drugs. Limit the amount you pay for new, untried drugs to a seven- to 30-day trial period. reduce drug misuse: Safe- guard against fraud and drug misuse in the plan by imposing a limit on the number of narcotics employees can access. improve medication adher- ence: Support employee health by introducing an adherence pro- gram that will ensure employees are getting the medications they need. Daily medication or refill reminders are easy programs to put into place. Bill Bright is a Calgary-based licensed pharmacist who leads Towers Wat- son's Canadian pharmacy practice. For more information, visit www. towerswatson.com.

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