Employers are reacting to expensive cancer drug treatments that are more frequently being transferred from provincial health care plans to private ones, a recent online survey provided exclusively to EBNC by Hewitt Associates found.

New drugs, such as Gleevec (for leukemia) and Herceptin (for breast cancer), can cost $25,000-$50,000 per year for an employee requiring treatment. According to industry data, the number of prescriptions for cancer drugs has risen by more than 50% in the last four years. This presents a dilemma for employers who are trying to control drug-plan costs.

Hewitt’s survey of more than 200 organizations found that around 1-in-10 employers have already changed their drug plans in response to these expensive trends. These actions include: adding a drug formulary to define and perhaps limit coverage; excluding coverage of certain drugs or classes of drugs; adding an annual or lifetime maximum for drug benefits; and increasing out-of-pocket maximums. All of these options limit the employers’ liability for cancer drug costs.

About the same number of employers have taken steps to limit the costs to employees, by introducing out-of-pocket maximums for the first time.

“The number of employers who have already taken action is surprisingly high, given that this is still an emerging issue,” says Tim Hadlow, a benefits consultant with Hewitt Associates in Toronto. “But what’s even more surprising is that between a quarter and a third of respondents don’t know what their coverage levels are, and haven’t taken any steps to find out. Only 21% of respondents had recently reviewed their plan to specifically look at cancer drug coverage.”

Hadlow also noted that according to the survey, 58% of respondents were currently covering oral cancer medications.

“In some cases, insurers may be using open formularies that automatically include these drugs, without the employer having made a conscious choice to fully cover them,” Hadlow says. “Employers have an opportunity to review their insurance contracts and make sure they understand how cancer drugs are being handled, and what options are available. Making informed choices can end up saving employers money, without jeopardizing employees’ health.”