What is a drug formulary?
A drug formulary is a list of prescription drugs that are covered by a plan sponsor’s benefits offering.
Why choosing a drug formulary is important
Customizing your plan to employee needs
Prescription drug coverage is a key part of your benefits plan. However, high costs of some medications have many plan sponsors looking for ways to keep their benefits plans affordable. Specific formularies can help you control drug costs while ensuring plan members have access to the medications they need.
Cost management
Promoting generic and biosimilar drugs to plan members can help keep your benefits plan affordable.
When a company develops a new drug, it will have the patent to make and sell the brand name drug for a period of time.
When the patent ends, other companies can make and sell generic versions which usually cost less than the original brand-name drug and contain the same active ingredients.
Biosimilar drugs are highly similar versions of originator biologic drugs (such as insulin) which are made from living organisms or cells. Biosimilars can help provide another great way plan members can get the treatment they need at much lower cost.
Choosing a formulary for your benefits plan
The drug formulary you choose for your benefits plan is important to balance coverage to plan members while keeping your plan cost sustainable.
Canada Life can work with you to:
- Determine the range of coverage and cost management strategies, etc.
- Discuss employee contributions or any cost-sharing between employer and employee
- Help you communicate your plan with employees, making sure they understand.
Provincial and territorial drug coverage
Each provincial and territorial government offers a drug benefit plan for eligible groups. Some are income-based universal programs. Most have specific programs for populations. These groups include seniors, recipients of social assistance, and individuals with certain diseases or conditions, such as diabetes.