Towers Watson Starts Canadian Pharmacy Plan Coalition

May 14, 2010 ( - Towers Watson has announced the launch of the Canadian Rx Coalition, a new way for employers to manage employee drug plans through a cooperative alliance with other Canadian plan sponsors.

Members of the Canadian Rx Coalition will have access to better ways to proactively manage pharmacy costs and deliver optimal care, including collaborative purchasing and much improved transparency of the deal terms available to them through their pharmacy benefits manager, according to a press release. In addition, step-by-step approaches for drug utilization management, disease management, formulary development and other efforts will have a sustainable, long-term impact on overall costs, quality and individual health outcomes.    

The announcement said the Coalition will provide significant immediate and long-term value through:

  • Transparency in drug pricing, vendor contracting, and reporting;
  • Efficiency and immediate cost savings through improved management, reduced or eliminated administrative error, and more effective coordination – without the need to change plan design;
  • Administrative responsiveness and access to flexible, rules-based administrative systems tailored to plan sponsor needs for specialized design features and effective coordination with government programs including any new regulations that could have a significant impact on drug costs;
  • New delivery models such as preferred providers and carved-out drug plan options;
  • Design support for active pharmacy benefit and clinical management;
  • Improved therapeutic results and value to patients through managed programs and formularies; and
  • Collaborative bargaining to gain a stronger position and industry voice.

Towers Watson said total drug spending in Canada is now over $30 billion, of which approximately $25.4 billion (84%) is for prescription drugs. For employers, this translates into a $14 billion – and growing – drug tab.   

The press release noted that many of the drivers of increasing costs have been “invisible” to employers. Pharmacy rebates – the method by which drug pricing agreements are established – and other aspects of drug pricing are not transparent, making it extremely difficult for employers to effectively manage their drug benefit programs. At the same time, Canadian drug plan sponsors often encounter design and administrative challenges, including vague descriptions of what is covered for employees, inconsistent adjudication, lack of incentives and processes to improve generic dispensing rates and inefficient prescription re-supply practices.   

More information is at