I'm trying a cut and past from an email, hope this works. What's Enbrel?
Globe & Mail 17/10/01
By VIRGINIA GALT
WORKPLACE REPORTER
Wednesday, October 17, 2001 - Print Edition, Page B3
TORONTO -- Drug plan costs could double in the next five years
as employers pick up the tab for a new generation of prescription
drugs, some costing as much as $65,000 a year for each affected employee, says Toronto-based consulting firm
William M. Mercer Ltd.
Enbrel, for arthritis, costs $19,000 a year; Todmodal, for cancer, costs $37,000 a year; and Remicade, for
Crohn's disease, costs $65,000 a year, benefits consultant Marg French told a meeting of employer
representatives in Toronto yesterday.
"When most employers introduced their drug plans, no one imagined prices of this magnitude. A single claim
could be damaging to one company's program costs." Most employers do not want to alienate employees by
imposing limits -- indeed, they believe they benefit from their investment in employees' health, she said.
Nonetheless, drug plans that now account for roughly 2 per cent of payroll on average will account for 4 per cent
of payroll within five years if costs are not contained, Ms. French said.
Most expensive are the new breakthrough drugs that are generally the first of a kind to treat a particular illness or
provide a substantial improvement from an existing product. However, these represent 5 per cent of new
products entering the market.
Roughly 52 per cent of the new drugs entering the market are "me too" drugs, often a slight modification to an
existing product, but more costly. Another 42 per cent are reformulations of existing products, such as drugs
modified with time-release aspects.
"While the blockbuster drugs make the headlines, smaller but steady incremental rises in costs are hitting a lot
more employer plans," Ms. French said.
Employees often want, and doctors often prescribe, the newest drug on the market when a less costly alternative
is just as effective, she said. "We have to develop a better perspective."
Rather than imposing caps, more employers might consider listing the drugs that a plan will cover, substituting
lower-cost generic drugs when there is no risk involved in doing so. For this they would need credible outside
advice because, currently, the recommendations for new products come from the pharmaceutical manufacturers
"who, naturally, have a vested interest in adding as many of their products as possible to the list," Ms. French
said.
Most employees do not realize that the outside firms hired to handle their company drug benefit plans are
generally providing administrative services, she said, adding that employers pick up all of the drug costs, except in
cases where they have co-payment arrangements with employees.
William M. Mercer is now pushing the insurance industry to treat the high-cost drugs, such as Remicade, in a
different manner than the more routine claims filed by most employees. "One approach to the high-amount claims
might be an insurance arrangement whereby a group of employers not willing to take the risk of a high-amount
claim would pool and pay a premium to a reinsurer to assume the risk," Ms. French said.
"You could retreat from drug benefits altogether," she said. "But, to be realistic, employers have to be competitive
and they need to keep employees on the job. Drug benefits are valued and they are a tax-effective way of
protecting and rewarding a work force." |
