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                                Summer 2013 Issue             

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Innovations in Drug

Plan Management

        - Now is the time to focus on drug plan costs.


We have experienced somewhat of a reprieve, over the last couple of years, from what was once an ongoing issue of high inflation trends for drug claims. We have had some intervention from the provincial governments to thank for a decrease in cost for generic drugs. Add to that, the falling off the 'patent protection' cliff for many blockbuster brand name drugs and it might appear that an era of manageable costs for Extended Healthcare plans is upon us.

Looking forward, however, would suggest that now is not the time to take our 'hands off the wheel.' While generic drugs may present some cost savings to many plan sponsors, we are still dealing with an aging demographic and that suggests that we will experience an increased utilization of prescription medicines as plan members get older.

Add to that the entry of 'Specialty Drugs' into the marketplace and it would seem that now is a time to focus on drug plan costs, not relax. Specialty Drugs include the new Biologic Drugs, which have done wonders for their patients but come with a very heavy price tag. Recent statistics reveal that these drugs represent less than 1 percent of all claims submitted but represent 19 percent of total claim costs.

There are many solutions out there to review but one that has moved to the forefront has been the implementation of a 'Mandatory Generic' substitution clause into many contracts. While we were initially skeptical of this as an option - it is becoming clearer that plan sponsors owe it to themselves to take a look. Our first seed of doubt came from the pricing factors that most carriers were offering for a move to Mandatory Generic. A 1 percent discount to one's rates may seem trivial relative to the change, however the true savings opportunity may present itself in the claim history down the road.

The second issue to come to our attention has been the concept of Brand Couponing. Couponing is a marketing push by the Brand Name drug companies to hold their share of the market. A Doctor can prescribe a Brand Name drug to a patient and present them with a Coupon that they can present to their pharmacist which will cover the cost difference between the Brand Name and its generic alternative. Without a Mandatory Generic substitution clause, the pharmacists in many instances, have been submitting these claims fully to the insured plan, saving themselves the hassle of filing paperwork to redeem the coupon. This means unwanted expenses in an insured plan, something that can be avoided with Mandatory Generic.


For more information, please email Advanced Benefits.


A Message to Plan Sponsors


We spend a lot of time with our clients reviewing their practice regarding continuation of benefits in the event of a disabled employee. There is no one answer that we are able to provide as a solution, but as a plan sponsor, you do have options available to you. The biggest comment we can make is that whatever your decision, it should form part of your company policy manual. This ensures that should you ever have to act on this policy, it is seen as a personnel matter, rather than a personal one.




Quote of the Day:

The employer generally gets the employees he/she deserves.


Walter Gilbey



A Client Story


We were recently asked to review a proposed renewal for a prospective new client. The renewal was presented as non-negotiable and the advisor was recommending the plan move to an association program - that the advisor happened to manage.

We disagreed with this recommendation for many reasons but the two biggest were that the plan could have and should have been negotiated; and moving this young company with a favourable claims history into an association plan meant they would no longer be renewed based on that claims history.


The client engaged our services and we have been successful in negotiating on our new client's behalf to a fair and just renewal and they don't have to go through the hassle of making a carrier change. 


Moving forward, we are now working together with the client to redesign their benefits program to improve upon the Value Proposition they are able to provide their valued employees. Check out what our clients have said, by clicking here.



Safety Awareness this Summer


At Advanced Benefits, we are passionate about our health and the health of others. This summer, enjoy yourself but stay safe. Here are some safety tips for your family.


39 Durward Place, Unit 2, Waterloo, ON N2L 4E5
Phone: (519) 576-5678