Employee Benefits

Virtual Pharmacies and Their Impact on Benefit Plans

By Doug Birks on May, 17 2022
3 minute read

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Doug Birks

Junior Associate

The popularity of purchasing pharmaceuticals online has grown dramatically due to the convenience, efficiency and low prices. Whether you prefer to video chat, call, or email, you can connect to a licensed pharmacist from anywhere in Canada. With many virtual options shaking up the industry, employers and employees alike are reaping the rewards. 

Private healthcare expenses in recent years continue to rise at a rate that is faster than general inflation. This emphasizes the importance of staying up to date on emerging trends that impact healthcare costs, such as the increase in approved specialty drugs and cost-shifting from provincial health insurance to private healthcare plans. For instance, prescription chemotherapy medications can be administered from home instead of the hospital.   The Canada Health Act limits payments for cancer medications to those administered in a hospital.  Therefore, patients taking medications at home pay out of pocket for their therapy and, in turn, will look to their employer-sponsored benefits to pick up the costs.

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The virtual pharmacy approach with automation technology to sort, manage and fill prescriptions at a level of efficiency reduces their costs to operate. The reduced operating costs are in turn passed to the Canadian consumer by offering lower prices compared to their brick-and-mortar competitors. These cost savings result in a positive impact on the bottom line of Canadian benefit plan sponsors. 

Another important consideration is that in your province there may be little provincial regulation on the dispensing fees pharmacies can charge on top of the cost of medication. The competitive pricing and simple lines of communications virtual pharmacies are now offering empowers Canadians to strategically shop drug price markups in a new way. As a plan sponsor, ask your benefits advisor about providing an employee webinar about transparent dispensing fees offered by the multitude of virtual pharmacies in Canada.  

A major influence on the consumer’s desire to make the switch from their traditional pharmacist may be whether they are responsible for a portion of the expense out of pocket. Most benefit plans in Canada include a coinsurance percentage split of the costs per claim. It’s not uncommon for employees and their dependents to be responsible for 10% or 20% of the cost of prescription medication. Even when this is not the case, and the benefits plan pays 100% of eligible drug expenses, plan sponsors can work with their advisors to educate employees on the other values. In particular, the convenience of service and the ability to consolidate medical records all in one accessible database.

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The convenience of removing the in-person component, waiting in lines for your prescription or speaking to your pharmacists is compelling. Employees can shop virtually and arrange for medication to be delivered directly to their home with automated refills based on the recommended schedule. Electronic medical record keeping can be invaluable for patients who are on long-term medication plans or balancing different treatments with multiple medications. Allowing easier tracking of results over time and fewer errors resulting from miscommunication or lost paper records. Having personal medical data readily available and easily accessible, empowers people with the wealth of data they need to take charge of their health. 

 

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