Issue link: http://clhia.uberflip.com/i/406567
EXECUTIVE SUMMARY The prescription drug system in Canada must be fundamentally reformed if it is to serve Canadians well in the long-term. The current system is inequitable both in terms of access and price. It is also increasingly being challenged from a financial perspective by the ongoing growth in drug costs which, ultimately, must be paid by plan sponsors, typically employers, or ordinary workers who pay for their prescription drugs through co-payments or directly out-of- pocket. Rising drug costs, particularly related to the increasing incidence of rare but very high cost drugs, undermines the ability of employers to continue to offer drug coverage benefits to employees. In 2011, life and health insurers made benefit payments for prescription drugs of $10.1 billion and private payers accounted for roughly 55 per cent of all prescription drug purchases. A pullback on drug coverage by employers would have dramatic implications, not only for individuals, but also for governments who are themselves struggling with rising healthcare costs. Any long-term solution to these challenges will require both public and private payers to make adjustments to their programs and to work more collaboratively going forward. The Canadian life and health insurance industry has a unique and important perspective on how the current system functions and therefore how to reform pharmacare for the benefit of Canadians. As administrators of the vast majority of drug benefits plans in Canada, we have a responsibility to employers and individual Canadians to constructively seek improvements to the current system. In addition, the industry is unique amongst payers in that we operate on a national basis, which gives us a strong and deep pan-Canadian perspective on the issue of drug coverage reform.