A constant in the group insurance arena is how to combat the increasing costs of prescriptions, while continuing to ensure employees receive the coverage they need.

Before a strategy to battle these increasing costs can be implemented, it is imperative to understand why the costs are increasing and IF the strategy proposed will be effective for your company.

According to one ESI Canada report, annual drug spending per employee in the year 2000 was $329 annually compared to present data, which states those same employees now spend more than $736. Getting to the ‘why’ is crucial when building a benefit plan design strategy to fight these escalating costs.

52% of all drug costs are spent on chronic diseases such as High Blood Pressure, Type 2 Diabetes, Arthritis, and High Cholesterol. By the age of 45, it is estimated 85% of Canadians will have a chronic condition.


Every year, new drugs are introduced, new prescription therapies; Biologic medications are becoming more mainstream and cost substantially more than traditional drug therapies. As some medications lose their patent exclusivity, leading to the introduction of low price generic equivalents, these costs are offset somewhat, but the fact of the matter is with an aging demographic, the ‘need’ for these treatments continue to monopolize the funds allocated to benefits, resulting in double digit plan cost increases.

Where’s the good news? 85% of people who utilize pharmaceuticals, claim less than $1,000 per year.

Consider the implementation of a wellness plan, such as an Employee Assistance Program that costs a mere fraction of what a drug benefit costs can be the difference between a condition being remedied, treated, stabilized and lessened, as opposed to escalating into a chronic situation.

A healthy workforce saves benefit dollars. The old adage rings true: “an ounce of prevention . . . ”

In actuality, for business, the cost of prevention is a long term investment strategy that will pay dividends long term both in money NOT spent and a successful workforce.

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