Reforming private drug coverage in Canada: Inefficient drug benefit design and the barriers to change in unionized settings

O’Brady, Sean, Marc-André Gagnon and Alan Cassels

Health Policy, 2015, vol. 119, issue 2, 224-231

Abstract: Prescription drugs are the highest single cost component for employees’ benefits packages in Canada. While industry literature considers cost-containment for prescription drug costs to be a priority for insurers and employers, the implementation of cost-containment measures for private drug plans in Canada remains more of a myth than a reality. Through 18 semi-structured phone interviews conducted with experts from private sector companies, unions, insurers and plan advisors, this study explores the reasons behind this incapacity to implement cost-containment measures by examining how private sector employers negotiate drug benefit design in unionized settings. Respondents were asked questions on how employee benefits are negotiated; the relationships between the players who influence drug benefit design; the role of these players’ strategies in influencing plan design; the broad system that underpins drug benefit design; and the potential for a universal pharmacare program in Canada. The study shows that there is consensus about the need to educate employees and employers, more collaboration and data-sharing between these two sets of players, and for external intervention from government to help transform established norms in terms of private drug plan design.

Keywords: Private drug plans; Employee benefits; Drug coverage; Collective bargaining; Pharmaceuticals; Health insurance (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:hepoli:v:119:y:2015:i:2:p:224-231

DOI: 10.1016/j.healthpol.2014.11.013

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