By Rob Taylor and Helen Stevenson

When it comes to benefit plan sustainability, the main challenge continues to be rising prescription costs, including specialty drugs. Combine that with an increased focus on mental health and its impact on long- term disability costs, and it’s no wonder plan sponsors are feeling overwhelmed and ill equipped to manage their drug plan.

Drug costs are high for a variety of reasons, but according to a recent report from Innovative Medicines Canada the top drivers of rising costs are:

  1. Shift your attitude. In today’s climate of rising drug costs, it’s essential to actively manage your employee benefits plan. And with innovative – and expensive – drugs coming to market almost every month, it might be the newest one that has the most cost impact on your plan. Instead, be proactive, review your drug plan spend regularly and prepare your next steps, such as considering a more actively managed formulary, before any changes come to market.
  2. Stay educated. The key here is increased education and awareness of your drug plan. Working with an advisor who specializes in employee benefits can help you make a decision about drugs in the market with confidence. The advisor can help you find a reasonable solution that provides the right coverage and also communicate the changes to your employees.
  3. Work toward prevention. More than 80% of Canadians believe their employers have a responsibility to support their physical and mental health. Create a workplace culture that supports and promotes good health and healthy lifestyles. This means looking at all aspects of the workplace, from policy to programs, and leadership to culture.

The challenge, however, isn’t just the large price tag. It’s the open-ended nature of the drug coverage in employee benefit plans. Unlike dental or supplemental services benefits, the drug benefit doesn’t have a “reasonable and customary” spend attached to it; it doesn’t have an annual cap or maximum; and it doesn’t have an end date.

Just one employee prescribed a $50,000 per year drug can impact whether a small or mid-sized organization can continue to offer drug benefits. With prices rising, your organization should ‘future-proof’ your drug plan. Consider these three tips to protect your organization and its employee benefits plan:

This is not a DIY project. Planning should have a sense of urgency, but it should also be intentional. The system is so complex that your plan should be guided by a pharmacy benefits advisor, who can help you address and manage these costs with confidence.

Helen Stevenson is the founder and CEO of Reformulary Group.

HUB International’s team of brokers is constantly in touch with new trends and developments in employee benefits, ensuring that clients can access the information needed to make informed decisions.


1 Cost Drivers Analysis of Private Drug Plans in Canada 2016-2018, Innovative Medicines Canada, http://innovativemedicines.ca/wp-content/uploads/2020/01/Cost-Drivers-Analysis-Report_2019_withLinks-002.pdf.

1 “Chronic Disease in the Workplace: Focus on Prevention and Support,” Sun Life Financial, https://www.sunlife.ca/static/canada/Sponsor/About%20Group%20Benefits/Group%20benefits%20products%20and%20services/The%20Conversation/Bright%20Papers/files/GB10267-E.pdf