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R e l e a s e d: m a r c h 3 1, 2 0 1 5 Cost-drivers of public drug plans in canada E l e n a l u n g u Manager, NPDUIS, PMPRB 2015 CADTH Symposium.

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Presentation on theme: "R e l e a s e d: m a r c h 3 1, 2 0 1 5 Cost-drivers of public drug plans in canada E l e n a l u n g u Manager, NPDUIS, PMPRB 2015 CADTH Symposium."— Presentation transcript:

1 r e l e a s e d: m a r c h 3 1, Cost-drivers of public drug plans in canada E l e n a l u n g u Manager, NPDUIS, PMPRB 2015 CADTH Symposium

2 About NPDUIS  Established in 2001 as an F/P/T research initiative to provide policy makers and drug plan managers with analyses of price, utilization and cost trends  A partnership between the PMPRB and the Canadian Institute for Health Information (CIHI)  CIHI developed the NPDUIS Database in consultation with the PMPRB  The NPDUIS Database houses pan-Canadian prescription claims-level data from publicly financed drug benefit programs in Canada  The NPDUIS Advisory Committee advises the PMPRB and provides expert oversight and guidance for the analytical reporting of the initiative  Representation: BC, AB, SK, MB, ON, NB, NS, PEI, NL, YK, NIHB & HC, CIHI and CADTH 2

3  Purpose  Points towards the most important cost pressures, measures their impact, and delves into the factors determining trends  Value  Insight into the recent drivers allows to anticipate future cost pressures and expenditure levels  Methods  Builds on the cost driver methodology developed by the PMPRB  Main data source: NPDUIS Database, CIHI  Plans reported: AB, SK, MB, ON, NB, NS, PEI and NIHB  Focus: 2012/13  Includes drug costs, dispensing fees, and pharmacy markups 3 Cost-drivers of public drug plans in Canada

4 4 Drug cost component – largest share

5 5 Declining rates of growth in drug cost

6 6 Sustained growth in fee expenditures

7

8  Changes in drug expenditures are multifactorial  e.g. aging of the population, the increased use of drugs, the rate of generic substitution, price changes, and shifts in the mix of drugs utilized  Some factors may have a “push” or positive effect on the change in prescription drug expenditures  e.g. aging and the increased use of drugs  Other factors may have a “pull” or negative effect  e.g. generic substitution and price reductions  The net effect of these opposing forces yields the rate of change in prescription drug expenditures 8 Cost drivers – 101

9  Demographic Effects  Population effect  Aging effect  Gender effect  Volume Effects  Prescription volume effect  Prescription size effect  Strength-form effect  Drug Mix Effects  Existing drug effect  Entering drug effect  Exiting drug effect 9 “Push” and “Pull” Effects  Price Effects  Price change  Generic substitution effect “How much would public plan drug expenditures have changed between 2011/12 to 2012/13 if only one factor (e.g. price of drugs) changed while all the others remained the same?” In reality though, multiple factors change simultaneously, creating a cross effect.

10 10 Important push and pull effects drive costs

11 11 Price effects pull drug costs downward

12 Pull effect: generic price reductions

13 Data Source: NPDUIS Database, CIHI Pull effect: generic substitution

14 Push effect: Growth in beneficiaries

15 Push effect: Higher use of drugs

16 Push effect: Increased use of high-cost drugs

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18 18 Fee expenditures mainly driven by push effects

19 19 Fee Driver: reduction in Rx size

20  Low rates of change in drug cost in recent years in public plans  Driven by opposing “push” effects and “pull” effects which nearly off-set each other  Demographic, volume, and drug-mix pushed costs upward:  In the absence of generic savings, would have increased drug costs by 8.5% in 2012/13  Generic price change and substitution pulled costs downward:  In the absence of other cost pressures, would have decreased drug costs by 9.2% in 2012/13  Prescription size matters, and pushed dispensing costs in some plans. 20 Conclusions Future editions of the CompassRx will monitor cost drivers in public plans

21 Thank you Elena Lungu NPDUIS website


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