Pharmacoeconomics: Everybody wins

3 minutes

With drug prices skyrocketing, you face a major challenge: offering your employees a competitive and valuable group insurance plan while keeping costs under control.

Mission impossible? Not with pharmacoeconomics!

Pharmaco… what? Pharmacoeconomics

Derived from health economics, this field evaluates new medications and pharmaceutical treatments by analyzing their clinical effectiveness, long-term cost and overall impact on the healthcare system or a group insurance plan.

There are four main types of pharmacoeconomic analyses:

  • Cost minimization
  • Cost/benefit
  • Cost/effectiveness
  • Cost/utility

Given today’s budget constraints (among other factors), pharmacoeconomics has become essential for anyone involved in health care—including you, who must ensure the sustainability of your employee insurance plan.

Here’s a concrete example

Pharmacoeconomic experts determine that, despite being more expensive, a new once-daily medication is more advantageous than an older alternative.

Why? Because a simpler, more effective treatment with fewer side effects increases adherence, leading to:

  • Fewer relapses
  • Fewer hospitalizations
  • Reduced need for complex, expensive treatments

In short: a more advantageous medication can cost less in the long run.
 

The benefits of pharmacoeconomics

Keeping up with all new medications in Canada? That’s not your job.

Your role is to ensure your group insurance plan helps your team access the right treatments.

Pharmacoeconomics helps you do just that—making informed decisions that benefit everyone. It improves cost management and enhances plan performance. It also shows you care about your team, reinforcing your image as a responsible, human and committed employer.

When treatments are accessible and affordable, everything improves: It reduces financial stress from often expensive and unexpected medical expenses. Employees can focus on their health instead of worrying about their wallet. The result: greater security, stability, and well-being. They feel supported—and truly cared for.

How to integrate pharmacoeconomics into your group insurance plan

Convinced to adopt pharmacoeconomics? Great! But to make it a success, you need to collaborate closely with your insurer or plan manager.

This way, you’ll better understand the impact of new treatments, reimbursement criteria, and existing measures like prior authorizations. This support helps you make informed decisions. With this approach, your company can stay aligned with advances in healthcare—without sacrificing cost-effectiveness.

To prevent runaway premium increases, each new treatment is thoroughly evaluated before being included in a group plan. Some prescription drugs are extremely expensive. That’s why a strict screening process and access controls are in place to manage them properly—ensuring they’re used at the right time, by the right people. Most importantly, this helps maintain the financial stability of the insurance plan.

That said, a pharmacoeconomic evaluation can take several months to complete.

1. New prescription drug

We monitor the market to identify upcoming medications in Canada.

If a drug is flagged for deeper analysis, its coverage is temporarily on hold for proper assessment.

Sometimes, the pharmaceutical company sends a submission file including:

  • Drug summary
  • Price
  • Clinical summary
  • Published clinical studies
  • Product information sheet
  • etc.

2. Prescription drug evaluation

Our team of pharmacists and drug management specialists reviews the submission file provided by the pharmaceutical company.

On the one hand, they focus on the product’s effectiveness. Does it improve patients’ quality of life? What are the side effects? What happens if it’s not taken correctly?

On the other hand, we study the direct costs of the drug, which include the unit price and the duration of treatment. Other factors, such as productivity, reduced disability and absenteeism, are also considered in the financial evaluation. Even if a drug appears expensive at first glance, it may have indirect benefits that increase its cost-effectiveness.

3. Drug approval

At this stage, we are able to determine whether this new drug will be added to those covered by our group plans.

We also define the claims process. The new drug may require prior authorization from the insurer before it is prescribed… or not. Sometimes, an alternative cost-management solution may be suggested.

In short, everything is put in place to balance treatment access and responsible plan management!