Strategies and Accountability: Four essential elements to meet the reality of higher-cost drugs

1. Strategies and Accountability: Four essential elements to meet the reality of higher-cost drugs Oct 2012

2. The Rationale for Benefits Keep employees at work/return to work Attract/ retain employees • Balance of selfish and unselfish objectives • Good corporate citizens

3. Four Essential Elements Innovation in plan design Foster employee consumerism Measure and respond Challenge/lobby government

4. Innovation in design • Why were drug benefit plans designed with a flat fee co-pay?

5. Innovation in design • Plan design needs to evolve to keep pace with evolving realities (escalating costs) • Sharing of high priced drugs by insurers step in the right direction • Need to examine ways to combine: • Flex benefits/defined contribution/healthcare spending accounts • Pluck ideas from the US • High-deductible, account-based consumer-directed health plans (CDHPs) • Break the old Models • Carve out insurance for select disease categories and continue ASO for balance • Build exceptions into the process

6. Employee Consumerism Source: Harness the potential of Generation Y, http://www.sunlife.ca/static/canada/Sponsor/Bright%20papers/GenY%20BrightPaper%20E.pdf

7. Employee Consumerism Source: Harness the potential of Generation Y, http://www.sunlife.ca/static/canada/Sponsor/Bright%20papers/GenY%20BrightPaper%20E.pdf

8. Employee Consumerism • Employees need to make informed decisions about their benefits • Need to examine ways to combine: • Flex benefits/defined contribution/healthcare spending accounts • Elements of consumer-directed health plans (CDHPs) • Allow accumulation and role over • Optional/non-optional insured components for high cost disease areas • Seek tax advantaged treatment of premiums for high cost areas (like LTD)

9. Challenge/lobby government • What percentage of drugs for renal cell cancer are funded by the private sector? • Ten years ago?

10. Challenge/lobby government • Significant percentage of product pipeline in cancer are oral meds (1/3) and other biologics are often oral formats • Private sector share of drug coverage increasing and will continue to do so • Government NOT playing well with others • What can be done? • Stop providing benefits • Dump on your employees • Live with it • Work to change the environment

11. Challenge/lobby government • Work to change the environment • Define government roles/accountability • Tax supportive policies • Push for trade offs • Quantify expenditures

12. Measurement • Considering all drugs paid for in the private sector in 2011, what are the top 3 diseases being addressed? • Considering all drugs paid for in the public sector in 2011, what are the top 3 diseases being addressed? “While 82% of respondents agree that their company’s benefits plans provide good value … only 29% say they calculate the ROI of their plans Leigh Doyle | August 01, 2012 http://www.benefitscanada.com/benefits/health-benefits/justifying-the-investment-30572 • What is the potential cost impact to the private sector of prostate cancer in 2020?

13. Measurement • Tools can be built to provide strategic insights in healthcare expenditures • Challenge existing providers • Create industry/private sector working groups to design/fund/build • Work with the Pharmaceutical industry • Utilize technology as an enabler “While 82% of respondents agree that their company’s benefits plans provide good value … only 29% say they calculate the ROI of their plans Leigh Doyle | August 01, 2012 http://www.benefitscanada.com/benefits/health-benefits/justifying-the-investment-30572

14. Who owns this? Innovation in plan design Gov’t Employees Employers Health Care Community Foster employee consumerism Measure and respond Challenge/lobby government WHO NEEDS TO LEAD IT?