This article was provided by Co-operators.
According to the 2024 Benefits Canada Healthcare Survey, the most significant challenge faced by plan sponsors is sustainability – they’re plagued with the delicate balancing act between offering comprehensive benefits plans while ensuring long-term costs are manageable, specifically due to rising drug plan costs. Prescription drug costs continue to represent the largest share, 32 percent, of health benefits spending in 2023, totalling over $15 billion (CLHIA, 2024 Life & Health Insurance Facts).
Private drug plan expenditure experienced an 11 percent increase in total drug spend from 2022 to 2023, with 8.4 percent of that increase coming from plan members claiming new drugs they had never claimed on before. The two conditions that drove most of the growth were diabetes (drugs such as Ozempic) and new diagnoses of ADHD, which both saw notable increases in drug costs and number of claimants.
It is widely recognized that the increase in diagnoses of the above conditions is caused by multiple factors. “Over the last few years, we’ve seen a level of influence from social media that our industry has never seen before,” explained Peter Ricci, manager of pharmacy programs at Co-operators.
“We’re in this age of technology where there is so much information available at our fingertips, but it is hard to cut through what is the right information for each individual,” said Ricci.
It is this level of influence that has undoubtedly played a role in the increase in diagnoses and subsequent claims for Glucagon-like-peptide-1 (GLP-1) medications. Direct-to-consumer advertisements for drugs such as Ozempic empower plan members to speak to their doctor and inquire about the treatment. A study by Anschutz Medical at Colorado University showed up to 33% of patients asked their provider for a prescription for a GLP-1 in response to a social media advertisement.
Co-operators' approach to managing the changing landscape is unique; they employ five pillars to provide fair, transparent and sustainable drug plans. The first of which leverages artificial intelligence (AI) to analyze claims for GLP-1 agonists and diabetes health technology. Their tool instantly reviews the claims for low-to-moderate cost, high-volume drugs while the plan member is standing in the pharmacy.
The system looks at the plan members’ claims history, previous drugs they have tried, how long and at what doses, to deliver a decision on the claim in seconds. This eliminates the need for another visit to their doctor to complete forms and provides a seamless experience for plan members to get the coverage they need.
“We understand how important these drugs are to those who need them and are thrilled to offer technology that makes it easy to work with us, and most importantly, very fast for plan members to get approved instantly,” explained Ricci.
Since implementation, the tool has ensured that only the appropriate claims are approved through the employer drug plan, helping to achieve sustainability of drug costs. It is important to keep in mind that employer health plans are designed to cover Health Canada approved drugs for their intended conditions – not to cover off-label usage.
“With the high use and desire for weight management drugs, we identified the need to address this demand, and we now offer weight management solutions as part of our Inclusive Coverages product that launched in June,” said Ricci. This gives employers an opportunity to support the unique needs of their employees and encourage a proactive approach to well-being.
“We acknowledge the importance of supporting an inclusive and diverse workplace,” Ricci said. “That includes providing coverages that support diverse health challenges with effective health management.”
By removing barriers and expanding access to inclusive health and wellness benefits to a broad spectrum of underrepresented groups, Co-operators is helping to build resilience - for workplaces, communities and all Canadians.
Navigating the challenging group benefits landscape is not just about controlling costs; it’s about balancing the needs of both advisors and plan sponsors. Co-operators is committed to serving as an ‘advisor to advisors,’ helping them make the best decisions for their clients.
We are proud to deliver industry-leading service, coupled with innovative products and solutions that ensure our clients are equipped to navigate the challenges of rising costs while ensuring comprehensive benefits remain part of their compensation strategy.
To learn more, visit cooperators.ca/group-benefits/advisor-resources.
