Towers Watson Launches Canadian Rx Coalition - A First of Its Kind Employer
Alliance to Transform the $14 Billion Pharmacy Benefit Industry

New coalition enables organizations to improve corporate drug plan management to achieve immediate and long-term drug plan efficiencies and savings benefiting employees and employers

TORONTO, May 13 /CNW/ - As governments scramble to reform the prescription drug market in Canada, Towers Watson today announced the launch of the Canadian Rx Coalition, a ground-breaking new way for employers to manage employee drug plans through a cooperative alliance with other Canadian plan sponsors. Membership in the Canadian Rx Coalition will give organizations control over their pharmacy benefit plans, and ensure long-term sustainability in the face of rising costs.

"The majority of working Canadians and their families depend on corporately-sponsored health benefits to ensure affordability of the prescription drugs they need," said Wendy Poirier, Director of the Canadian Health and Group Benefits Practice at Towers Watson. "But today, the Canadian pharmacy industry is at a crossroads. Prescription drug plan costs have continued to escalate over the last two decades, translating into a drug tab costing billions of dollars each year. The new Canadian Rx Coalition will enable participating organizations to better manage their drug plans, to the benefit of both employers and their employees."

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. 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 Coalition is a win-win for both employers and employees," states Poirier. "The dynamic nature of pharmacy management means plan sponsors must continuously recalibrate design, pricing and utilization levels to achieve their cost and productivity objectives. The Canadian Rx Coalition will provide the tools that plan sponsors and members need to manage their health and drug programs more effectively."

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
    -   Collaborative bargaining to gain a stronger position and industry
        voice
    

The Canadian Pharmacy Industry at a Crossroads(1)

Prescription drug costs in Canada are continuing to rise, having more than doubled over the past decade. At the same time, drug expenditure per capita has soared, with Canada now ranking second in the world after the United States according to the Canadian Institute for Health Information. Total drug spend 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.

Unfortunately, however, 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, make 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.

According to the Canadian Competition Bureau, the private sector could save up to $600 million each year if changes were made to the way we pay for generic drugs alone. These savings could be used to reduce drug plan costs or expand employee coverage. As Poirier notes, "there is a growing awareness of the need to make the pharmacy benefit system more flexible and accountable, not only to reduce costs but also to improve patient outcomes. By launching the Canadian Rx Coalition, we're starting this process, so that employers can better manage their programs, obtain fair pricing deals and encourage a healthier, more productive workforce."

Further information on the Towers Watson Canadian Rx Coalition can be found at www.towerswatson.com.

About Towers Watson

Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of employee benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at towerswatson.com.

    
    (1) Editors Note: Statistics cite Canadian Institute for Health
    Information, Drug Expenditure in Canada, 1985-2009 which is freely
    available online at www.cihi.ca.
    

For further information: Media Contacts: Laura Snell, [phone], [email protected]; Jim Black, [phone], [email protected]