Drugs at Rock Bottom Prices!

by Tags:

The pan-Canadian Pharmaceutical Alliance and the Canadian Generic Pharmaceutical Association have just announced an agreement to reduce the cost of generic drugs in Canada effective April 1, 2018. Under the new agreement, the price of some of the drugs will fall to 10% of the brand-name price.

According to the press release “the prices of nearly 70 of the most commonly prescribed drugs in Canada will be reduced by 25% – 40%, resulting in overall discounts of up to 90% off the price of their brand-name equivalents. These drugs include those used to treat high blood pressure, high cholesterol, and depression, and are collectively used by millions of Canadians.” This is a five-year initiative and will benefit both public drug plans and employer sponsored drug plans.

While high cost drugs are getting all the attention currently, the majority of claims under drug plans is for lower cost drugs to treat chronic conditions, such as high blood pressure, high cholesterol and depression as mentioned previously. Cost reductions on these drugs help by leaving a little more in the budget for less frequent but higher cost drugs for the treatment of catastrophic illnesses.

Is your benefit plan designed to maximize the savings opportunity this presents? Employees may be a bit resistant to change. It is important that they understand that generic drugs must contain the same medicinal ingredient as the name brand. Incentives built into the plan, such as reimbursing only up to the cost of the generic drug, encourage employees to change behaviour.

Let me know if you want to talk about the challenges of changing your plan. I’ll buy the coffee, so it is another win for your budget!

Related insights

Healthcare access and COVID-19

On 31st January 2020, the first two cases of COVID-19 in the UK were...

Read more

Keeping your eye on the ball: Consideration of non-financial factors in the selection of defined contribution plan investments

One prominent issue recently impacting defined contribution plans has been whether plan fiduciaries are...

Read more

10 tips for staying connected with employees through the holidays and into 2021

In what has been an unprecedented year, employees’ concerns around health and financial wellness...

Read more