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 1816.

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Underwriting

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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.

Underwriting - Insured

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Pay a set rate

regardless of usage.

Underwriting - ASO

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Pay for actual usage.

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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

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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

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Single Source Brands Multiple Source Brands

& Generics

Limited Benefit High Cost

Blue Rx

Blue Rx Managed Formulary - Categories

• Innovator Brand

• No generics available

• Usually still under patent protection

• e.g. Lyrica™

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Single Source Brands

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• Brand drug for which patent has expired

• Generic versions are available

• e.g. Lipitor™

Multiple Source Brands & Generics

Multiple Source Brands

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• Same active ingredients

• Same dosage form

• Same strength

• Same conditions of use

• Different inactive ingredients but must have been proved safe

Generics

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Generic Drugs – Health Canada

Reproduced with permission from the Minister of Health, 2013

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Generic Drugs – Interchangeability

Section 25.91 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.

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• 2nd and 3rd line treatments for which a less expensive alternative is available

• Requires Prior Approval

• Categories:

• Diabetes

• Ulcer Therapy

• Asthma / COPD

• Acne

• Anticoagulation

Limited Benefit

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• Drugs that have an annual cost of $1,500 or more per year

• Require PharmaCare Special Authority to access government funding

High Cost

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Single Source Brands Multiple Source Brands

& Generics

Limited Benefit

High Cost

Blue Rx

Blue Rx Cost Containment

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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.

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www.pharmacycompass.ca

• Maximum eligible cost is the Manufacturer’s List Price.

• For 21 drugs the maximum eligible cost is the reference drug price (limited benefit).

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Single Source Brands

Ingredient Cost Limit

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• 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.

Multiple Source Brands & Generics

Ingredient Cost Limit

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Limited Benefit

Prescribed drug: Januvia

$3.00 per day

Covered drug: Metformin

$0.20 to $0.50 per day

Payment reduced to covered drug

Physician completes form (specialist exemptions)

PBC evaluates the submission

If approved, payment for prescribed drug

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Payment declined

Physician completes form (specialist exemptions)

PharmaCare evaluates the submission

If approved, payment for prescribed drug

High Cost

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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.

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Generic Cost Containment

Prior Coverage Blue Rx

Lipitor, 20mg Atorvastatin, 20 mg @ 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: $ 11.61

Plan saves: $46.45

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Special Authority Cost Containment

Prior Coverage Blue Rx

Remicade 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.

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Resource Centre –

www.pac.bluecross.ca/teachers

Thank you