Pacific Blue Cross. Pacific Blue Cross and BC Life are represented by CUPE local 1816.

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2 Pacific Blue Cross Pacific Blue Cross is a not-for-profit organization our resources are used to serve stakeholders, not stockholders. financial surpluses are reinvested into the business for the current and future benefit of our members. Pacific Blue Cross and BC Life are represented by CUPE local

3 Underwriting The contract is underwritten on an Administrative Services Only (ASO) basis. An ASO plan is a self-funded plan. The contract holder is exclusively responsible for all financial aspects of the group benefit plan. The carrier handles the claims adjudication and payment process and is paid a percentage of paid claims for their work. 3

4 Underwriting - Insured Pay a set rate regardless of usage. 4

5 Underwriting - ASO Pay for actual usage. 5

6 Prescription Drug Benefit Changes Pay Direct Drug Card increased claim submissions due to forgotten claims additional purchases New coverage sexual dysfunction prescription drugs contraceptive prescription drugs Coverage changes Blue Rx managed formulary 6

7 Blue Rx Managed Formulary Drugs that are more expensive without offering better treatment outcomes are not covered or are only covered if first line therapy has been tried and failed. Most new drugs have no incremental therapeutic value but are usually the most costly in their respective therapeutic class. *In 2011, there were 109 New Brand Drugs 1% breakthrough 5% substantial improvement *PMPRB Annual Report 2011, Appendix 2, Government of Canada 7

8 Blue Rx Managed Formulary - Categories Single Source Brands Multiple Source Brands & Generics Blue Rx Limited Benefit High Cost 8

9 Single Source Brands Innovator Brand No generics available Usually still under patent protection e.g. Lyrica 9

10 Multiple Source Multiple Brands Source & Generics Brands Brand drug for which patent has expired Generic versions are available e.g. Lipitor 10

11 Generics Same active ingredients Same dosage form Same strength Same conditions of use Different inactive ingredients but must have been proved safe 11

12 Generic Drugs Health Canada Reproduced with permission from the Minister of Health,

13 Generic Drugs Interchangeability Section of the Health Professions Act allows a British Columbia Pharmacist to dispense an interchangeable drug (generic). Generic dispensing frequently happens without the patient knowing. In 2012, a study of the most common drugs prescribed to BCTF members showed generics were dispensed 82% to 96% of the time. 13

14 Limited Benefit 2 nd and 3 rd line treatments for which a less expensive alternative is available Requires Prior Approval Categories: Diabetes Ulcer Therapy Asthma / COPD Acne Anticoagulation 14

15 High Cost Drugs that have an annual cost of $1,500 or more per year Require PharmaCare Special Authority to access government funding 15

16 Blue Rx Cost Containment Single Source Brands Multiple Source Brands & Generics Blue Rx Limited Benefit High Cost 16

17 Pharmacy Services Fees all categories Maximum Dispensing Fee and Mark up are limited to Reasonable and Customary amounts as determined by an agreement reached between BC PharmaCare, the BC Pharmacy Association and the Canadian Association of Chain Drug Stores. Pharmacy Compass is an online tool developed by Pacific Blue Cross that helps you compare the price at different pharmacy locations across British Columbia. 18

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19 Single Source Brands Ingredient Cost Limit Maximum eligible cost is the Manufacturer s List Price. For 21 drugs the maximum eligible cost is the reference drug price (limited benefit). 20

20 Multiple Source Brands & Generics Ingredient Cost Limit If there are chemical equivalents, the maximum eligible cost is the lowest cost of all the chemical equivalents. If there are no chemical equivalents, the maximum eligible cost is the Manufacturer s List Price. 21

21 Limited Benefit Payment reduced to covered drug Prescribed drug: Januvia $3.00 per day Covered drug: Metformin $0.20 to $0.50 per day Physician completes form (specialist exemptions) PBC evaluates the submission If approved, payment for prescribed drug 22

22 High Cost Payment declined Physician completes form (specialist exemptions) PharmaCare evaluates the submission If approved, payment for prescribed drug 23

23 Generic Cost Containment Effective April 1, 2013 generic drugs in BC will be priced at 25% of the equivalent brand drug. As announced by The Council of the Federation, all provinces and territories (except for Quebec) have agreed to establish a price for the 6 most common generic drugs at 18% of the equivalent brand drug. 24

24 Generic Cost Containment Prior Coverage Blue Rx Lipitor, 20mg Atorvastatin, 20 18% Monthly drug cost: $70.80 Monthly drug cost: $12.74 Plan pays (80%): $56.64 Plan pays (80%): $10.19 Member pays: $14.16 Member pays: $2.55 Member saves: $ Plan saves: $

25 Special Authority Cost Containment Prior Coverage Remicade Blue Rx Remicade Est. annual cost: $19,000 Est. annual cost: $19,000 No Special Authority approval Special Authority approval Plan pays: ~ $19,000 Plan pays: ~ $4,000* PharmaCare pays: ~$15,000 Plan saves: ~$15,000 * Assumes $100,000 annual family income and 100% PharmaCare coverage after 4% of income. 26

26 Resource Centre 27

27 Thank you