Reforming Private Drug Coverage in Canada: Inefficient Drug Benefit Design and the Barriers to Change in Unionized Settings

O’Brady, S., Gagnon, M. A., & Cassels, A. (2015). Reforming private drug coverage in Canada: Inefficient drug benefit design and the barriers to change in unionized settings. Health Policy, 119(2), 224-231.

8 Pages Posted: 10 Nov 2016

See all articles by Sean O'Brady

Sean O'Brady

University of Montreal - School of Industrial Relations

Marc-Andre Gagnon

Carleton University - School of Public Policy and Administration

Alan Cassels

University of Victoria

Date Written: February 1, 2015

Abstract

Prescription drugs are the highest single cost component for employees’ benefits packages in Canada. While industry literature considers cost-containment for prescription drug costs to be a priority for insurers and employers, the implementation of cost-containment measures for private drug plans in Canada remains more of a myth than a reality. Through 18 semi-structured phone interviews conducted with experts from private sector companies, unions, insurers and plan advisors, this study explores the reasons behind this incapacity to implement cost-containment measures by examining how private sector employers negotiate drug benefit design in unionized settings. Respondents were asked questions on how employee benefits are negotiated; the relationships between the players who influence drug benefit design; the role of these players’ strategies in influencing plan design; the broad system that underpins drug benefit design; and the potential for a universal pharmacare program in Canada. The study shows that there is consensus about the need to educate employees and employers, more collaboration and data-sharing between these two sets of players, and for external intervention from government to help transform established norms in terms of private drug plan design.

Keywords: Private drug plans, Employee benefits, Drug coverage, Collective bargaining, Pharmaceuticals, Health insurance

JEL Classification: I13, O15, J52

Suggested Citation

O'Brady, Sean and Gagnon, Marc-Andre and Cassels, Alan, Reforming Private Drug Coverage in Canada: Inefficient Drug Benefit Design and the Barriers to Change in Unionized Settings (February 1, 2015). O’Brady, S., Gagnon, M. A., & Cassels, A. (2015). Reforming private drug coverage in Canada: Inefficient drug benefit design and the barriers to change in unionized settings. Health Policy, 119(2), 224-231., Available at SSRN: https://ssrn.com/abstract=2867517

Sean O'Brady (Contact Author)

University of Montreal - School of Industrial Relations ( email )

United States

Marc-Andre Gagnon

Carleton University - School of Public Policy and Administration ( email )

Ottawa, Ontario
Canada

Alan Cassels

University of Victoria

3800 Finnerty Rd
Victoria, British Columbia V8P 5C2
Canada

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