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

Health Policy. 2015 Feb;119(2):224-31. doi: 10.1016/j.healthpol.2014.11.013. Epub 2014 Nov 22.


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: Collective bargaining; Drug coverage; Employee benefits; Health insurance; Pharmaceuticals; Private drug plans.

MeSH terms

  • Canada
  • Cost-Benefit Analysis
  • Health Benefit Plans, Employee* / economics
  • Health Benefit Plans, Employee* / organization & administration
  • Health Care Reform / methods
  • Health Care Reform / organization & administration*
  • Humans
  • Insurance, Pharmaceutical Services* / economics
  • Labor Unions
  • Organizational Innovation