Health Committee on Feb. 2nd, 2017

[Dianne Balon]

I'll speak from the perspective of a not-for-profit. I can say that Alberta Blue Cross is very effective and efficient because we deliver services on behalf of the government and it is imperative that we constantly prove to the government our value for money. I can say there's no profit there; it's on a break-even perspective.

On our corporate basis, as a not-for-profit, if there are any remaining funds from collective lines of business, they have to be reinvested in keeping premiums competitive and in offering our wellness programs to promote prevention. We believe we need to ensure that we reduce the burden of disease and lower costs to lessen the cost factor in the future. This is something I haven't heard too much about, and it is very important to us. Of course, any additional funding would go back into innovation and systems, into some of the new things that everybody wants an app for.

I looked at the CLHIA-stated industry averages. I can say that we are much lower when it comes to cost than what they have quoted. Being a not-for-profit and having no shareholders, we have a mandate that is quite different. Everything needs to be reinvested or kept at a lower premium.

[Len Webber, Conservative, Calgary Confederation, AB]

What would be some of your key cost drivers, then, in this prescription drug insurance program offered by Alberta Blue Cross?

[Margaret Wurzer]

When we look at prescription drug costs, I can probably speak to two key buckets. One would be related to the cost of the actual dispensing of the prescription, so that's your drug cost along with your dispensing fees and your markups.

With that, there's a number of plan management things that we offer to our plan sponsors to try to keep the number of dispensing activities at a reasonable level. For example, if you're on a chronic disease medication and you're stabilized on it, we have programs to try to encourage use of less dispensing, such as dispensing a three-month supply as opposed to monthly dispensing. Those are some of the cost drivers in terms of the dispensing.

We also, as Dianne alluded to, have a pharmacy agreement with our Alberta pharmacies whereby we have caps on the dispensing fees and the markups that they can charge. Through those mechanisms, we're able to control the cost.

The challenge, though, with the drugs that are now being dispensed is the very high cost drugs, the orphan drugs, the specialty drugs. More and more, we're seeing these biologics being used for very chronic common diseases. We have drugs now for treating cholesterol that used to be hundreds of dollars per patient per month. Now we're at between $7,200 to $22,000 per patient per month.

Another cost consideration and the second bucket of costs is really the mix of drugs. As I'm sure many of you have heard, if we look at drugs for treating diabetes, there are some that are in the cost range of 18¢ a day versus some that are $3 per day. At Alberta Blue Cross we put in processes similar to what was talked about with the Canadian Forces, things like step therapy and special authorization. Those are processes that we use to try to manage the cost and, at least hopefully, influence prescribing maybe some of the more cost-effective therapies.

[Len Webber, Conservative, Calgary Confederation, AB]

That's great, thank you.

Commander Grenier, I have a question for you just with respect to what you had indicated to us about spending $26.6 million in medication. You say the average cost per member of approximately $375 has been consistent throughout the last five years. But of course, we've all heard in media reports and such about the use of medicinal marijuana with veterans and how that's increased significantly.

I just wanted you to chat a bit about why these costs have remained constant, yet there is such a high demand for medicinal marijuana.

[Cdr Sylvain Grenier]

In the Canadian Armed Forces, our drug formulary is evidence-based, as I mentioned. We do cover the majority of the conditions that would be causing problems for our patients. The case of medicinal marijuana is unique. First of all, it's not considered to be a medication. If we look at the evidence.... I'm not an expert in the area, but I can tell you I've been to many conferences. From one conference to another, the studies contradict each other at this time. Until they can come up with clear evidence of the usefulness of medicinal marijuana, it's going to be hard to determine where it fits.

In our formulary, we do cover nabilone, which is a synthetic cannabinoid. There is evidence in some situations, and we have criteria to use that. Currently if patients had a need for that, they could get that prescribed without any problem.

For medicinal marijuana, because of the access the Supreme Court came out with a few years ago, we have a policy that of course if members have a need and it's recommended by their physician, then they would be allowed to use it. Then they have to be assessed, as with any other medication, to see if they need to have military employment limitations. Of course, if you have a patient using medicinal marijuana, there might be impact on whether they can pilot a plane, use weapons, and things like that. Those things have to be considered.

We don't have specific rules for medicinal marijuana compared with any other drugs or medical conditions.

[Len Webber, Conservative, Calgary Confederation, AB]

That's interesting.

[The Chair, Liberal, Bill Casey]

The time's up.

Go ahead, Mr. Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

Thank you to the witnesses for being with us today.

I have a number of questions about Alberta Blue Cross. I was born in Edmonton, and I was also a beneficiary of the Alberta system for several decades. Thanks for being here and for your work.

I want to talk first about copayments. According to Dr. Braden Manns, a researcher with the University of Calgary's Cumming School of Medicine, he estimates that up to 30% of Alberta's low-income seniors report regularly not taking preventative medicine for conditions like high blood pressure and diabetes because of financial barriers. I know that in Alberta, Blue Cross provides 70% drug coverage for seniors, but according to Dr. Manns, the 30% copay may be having an impact. He says oftentimes people are taking six to 10 medications. What we understand is that the average out-of-pocket cost per year is in the range of $300.

In your view, what impact do copayments for prescription drugs have on cost-related non-adherence? Would you have any advice to this committee, if we were to set up a universal system, on what role copayments should or should not play in that system?

[Dianne Balon]

First of all, Dr. Manns is actually currently doing a research project with the Government of Alberta in that particular area. They are offering to a trial group of seniors no copayment, so that they're able to go back and see whether or not there is any evidence in the end. That's currently under way.

I'm going to turn to Margaret in one minute, but I think the question of copay has been around for quite a while. In the group business that certainly does have an impact and it is a plan sponsor's decision. I know over the years, being with Blue Cross for 29 years, that even the government should choose because currently they have the 30%, to a maximum of $25 per prescription. No one pays more under the government program, under that particular seniors' program or non-group, than $25 per prescription regardless of the cost. The 30% does have a cap associated with it as well.

[Margaret Wurzer]

I'll just add one thing to the government plan and the structure for the coverage for seniors. The way that copayment structure is modelled, so 30%, up to a maximum $25, I had spoken earlier about trying to encourage a maintenance supply of medications for use in chronic diseases. Really, if you look at that copay structure, it does really incent seniors to fill for a longer day supply, so a three-month supply, for example, instead of a one-month supply, because their copay is capped at $25 per prescription. That is a consideration. Certainly when we talk to our private plans, a lot of times they don't have a cap on their copayment structure. So, really, having a cap in that way does encourage, I think, the use of chronic medications being filled less frequently.

Certainly we do have plans on the private side that have 100% coverage, with no copays. We have plans that have fairly high copays. I would say that when it comes to the issue of compliance or adherence to medications, I think financial is one of the factors, but there's a number of other factors. Even on those plans that have 100% coverage for conditions like blood pressure or diabetes, where maybe you don't feel the effects of the disease itself, we still do see people not filling their prescriptions. Sometimes the side effects of those drugs are nasty and they're not feeling the effects of the disease.

[Don Davies, NDP, Vancouver Kingsway, BC]

Right. Thank you.

I want to move to the formulary. As you've said, Alberta Blue Cross offers supplemental health insurance plans for individuals and businesses, and is also responsible for managing three prescription drug insurance plans offered by the government, including the non-group coverage benefit program, the coverage for seniors program, and the palliative care benefit program. I'm wondering if you could tell us how broad or restrictive the formularies offered by Blue Cross's private plans are in comparison to the government-sponsored plans.

[Margaret Wurzer]

Sure.

If we look at the Government of Alberta plan in terms of the number of drugs—we call them drug identification numbers—that are covered on the plan, roughly 5,000 are covered on the Government of Alberta plan. In contrast, if we look at one of our typical private plans, what we consider our managed formulary, we're looking at roughly 8,500 DINs that are covered on those private plans. From a numbers perspective, there certainly is more coverage on those private plans.

[Don Davies, NDP, Vancouver Kingsway, BC]

How do you handle brand names versus generics on the formulary?

[Margaret Wurzer]

Plan sponsors have a choice in terms of what they do around coverage for brands versus generics. I would say that the vast majority of our plan sponsors, and certainly government, have adopted the policy to enforce generic pricing. I would say that probably upwards of 80% to 90% of our private plans also follow that model.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Commander Grenier, I'll address the same question to you. How does your plan handle brand names versus generics on your formulary?

[Cdr Sylvain Grenier]

When it's filled in the military pharmacies, we always go with the cheapest one we can get. If we do have a drug in the contract, whether it's a brand name or generic—because sometimes we get brand name drugs cheaper than generic drugs—our pharmacies are made aware. Centrally, we just inform them of the brand they have to buy. If we don't have a contract, the local military pharmacist will go through whatever is available from the supplier and go with the cheapest one for the formulary.

For civilian pharmacies, because we can't really control what they have in stock, we basically have to open it up to whatever they have. If they give a brand name versus a generic, they will still be paid.

What we've seen, because we're so small a player across the country, is that as soon as we implement new rules that make it more restrictive, the patient has to pay out of pocket because the pharmacy doesn't want to do the necessary process to get paid. Then the patient claims it, for which they will be reimbursed, but it just adds a layer for the patient because they don't get it right away.

[The Chair, Liberal, Bill Casey]

Mr. Ayoub.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

Thank you, ladies and gentlemen, for being with us today.

Perhaps I'll ask a simple question to get a quick overview of the drug reimbursement process on the well-known list that is accepted by the insurance companies and the armed forces.

In Alberta, the final version of this list is approved by the Alberta minister of Health, on recommendation from experts, of course. However, the minister has the final say.

How do you see the acceptability of this list and its evolution over the years in relation to the drugs? In Alberta, we see that there are specific programs for catastrophic drugs and specific diseases. It's a little different from what we saw elsewhere and from what I know in Quebec.

How do you see the evolution of this list? Perhaps we could start with Ms. Balon.

[Dianne Balon]

The Government of Alberta decides what is covered, so it is inappropriate of me to speak to what is covered under their plan, but I will say that it certainly has evolved over the years I have been there. They have moved to add different variations, different products, different programs.

The programs have certainly grown in the province in the last several years, especially the programs that you spoke about. They cover the human services programs. I don't have the list in front of me, but there are significant programs that they do cover. I'm going to let Margaret talk a little bit about the expert committee and what is there, but I certainly think it's very important to say that it has evolved.

I want to make sure. There is sometimes a misconception in the province because we administer the programs. We administer the programs for the government, and they use their formulary, but we also have, under our 5,700 groups, probably thousands of variations of formularies as well. Everyone in the province doesn't follow exactly the same one. They have what one could refer to as the core base, as Margaret said, the 5,000, minus some of the speciality programs. Then the private ones have their own formularies outside of that.

[Margaret Wurzer]

To the question on the Alberta health process. Certainly they use the recommendations of the common drug review and they have local experts that sit on the Alberta expert committee. Those local experts are doctors, pharmacists, and so on, who work within the province of Alberta.

I think the fact that they have this extra committee that really starts to understand the environment of Alberta sometimes shapes some recommendations going forward to the minister that are more Alberta-specific.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I'm going to interrupt you so we can open up the discussion.

With respect to the pan-Canadian study conducted by the committee on the national pharmacare program, it is obvious that there are particularities. Some provinces approve certain drugs, and the lists aren't always the same. They are not comparable among the provinces.

My question is general. I would like to know your assessment of what drugs are approved in Alberta. I don't want to put you in the hot seat on the government's acceptance of drugs, but we still need a general view on this. We are here to look at the situation in Canada as a whole, which is why I'm asking this question.

Could you give me a 30-second answer, because I would also have a question for Mr. Grenier.

[Dianne Balon]

Absolutely I would say that, generally speaking, we see a population that is very pleased with the formulary that is there for the government-sponsored programs. There are private groups that want to mimic it because they do feel that it is efficient.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Okay.

Mr. Grenier, the list is established by the Canadian Forces Pharmacy and Therapeutics Committee, the CFPTC, and is therefore even more limited. The list is drawn up by the Canadian Forces itself.

Could you tell me more about that? Who makes these decisions?

We were talking about evidence-based science. How is the situation in your small group compared to the rest of Canada?

[Cdr Sylvain Grenier]

We use the services of the Canadian Agency for Drugs and Technologies in Health—the CADTH—to assess medications. The agency uses a program called the common drug review, which we are also adopting. Once the program makes a recommendation regarding a drug, it is sent to the CFPTC. At that point, we determine whether additional restrictions should be imposed for recommended drugs in the military community.

We don't have statistics on that. However, I can tell you, based on my experience, that about 95% of recommendations are followed in our case. On thing we could look at, for instance, is that one drug is cheaper than another, but it may need to be refrigerated, which would not be the case for another product. This would have an impact on our activities because we can't necessarily ensure refrigeration in all circumstances. So these are the kinds of factors we consider.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you.

The table you presented shows that there are significant savings in the comparative cost of prescriptions, but obviously your expenditures may be more closely monitored.

Have the armed forces ever been called upon to publicize this formula, which appears to be more cost-effective for prescriptions? Have you ever been asked to share this information with other levels of government or other bodies?