Reforming private drug coverage in Canada: Inefficient drug benefit design and the barriers to change in unionized settings

- We conducted 18 interviews with companies, unions, insurers and plan advisors.
- Interviewees were asked about the benefit design process in unionized settings.
- All participants agreed that most private plans failed at providing value for dollar.
- Participants blamed lack of information sharing, education, and insurer incentives.
- All participants favored some form of government intervention.

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.