Benefits

Introduction The drug pipeline is filled with new, more specialized and more expensive drugs to treat various diseases. High-priced drugs make it challenging for plan sponsors to provide a sustainable and comprehensive plan to their plan members and thus, decisions about reimbursement can be difficult. While it is imperative that plan sponsors know the financial risk associated with listing a pharmaceutical product on their drug plan, it is equally important to know whether the cost of listing a drug represents good value for money. For instance, an expensive drug may increase survival, improve productivity, or reduce disability claims. Cost-effectiveness analysis (CEA) is relatively new to Canadian private payor and is one aspect of TELUS Health's Enhanced Drug Review (EDR) program to help ensure plan sponsors get value for their drug plan spend, for employees. CEA considers the cost and benefits of therapies to determine if new drugs are worth the increased cost. The goal is not to find the cheapest alternative, rather, it is to find the drugs that offer the most efficient use of the money spent. A drug may be costly—but it may be cost-effective. The analysis can identify therapies that represent good value for money and therefore, can help to inform an evidence-informed, value-based drug plan. While published guidelines for conducting CEA from the public payor perspective exist, there are several aspects to consider when conducting an analysis from a private payor perspective, as well as some methods to avoid. This guidance document is intended to help those producing CEAs for private payor so the analyses are credible and relevant for plan sponsors, economic information is standardized, as are the methods, and reporting. The ultimate goal is to facilitate well-informed decision-making specific to private payor. CEAs submitted to private payor should follow the recommendations set out in this document, as well as the Guidelines for the Economic Evaluation of Health Technologies: Canada 4th Edition published by the Canadian Agency for Drugs and Technologies in Health (CADTH). Use of a standard approach increases transparency in the process and confidence that the results are relevant to the private payor and useful for reimbursement decision-making. These guidelines will be reviewed and revised as necessary. This article is part 2 of a 2-part series following the publication of our Budget Impact Analysis (BIA) guidance document. Private payor perspective When conducting a CEA, the costs included must be relevant to the decision-maker. Public plan decision-makers are interested in healthcare system costs, such as hospitalizations and physician visits, whereas plan sponsors are more concerned about the drug cost and it's potential to improve workplace productivity, reduce absenteeism, or prevent a disability claim. As a result, the objectives differ due to the population they cover and the benefits they value in a drug. It is not necessary to create a completely new economic model for the private payor, but some adjustments should be made to what is submitted to the public payor. Creating the option to remove all public payor costs would be a first and simple adaptation. Also, it should be noted that a societal perspective is not the same as a private payor perspective. For example, patient out of pocket costs (e.g., transportation, parking, hotel) or caregiver burden are not relevant. It is recommended that manufacturers include the costs of other benefits that might be impacted. Remember, the payor is the employer who pays for all the benefits. As a result, if possible, include productivity costs in the analysis relevant to the private payor (e.g., absenteeism, presenteeism); disability costs, allied healthcare provider costs (e.g., chiropractic, physiotherapy, massage), assistive devices, rehabilitation and out of hospital costs that are not covered by the public healthcare system. Getting value for money from private payor drug plans: Considering more than just costs. Part 2 of a 2-part series.

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