The Price of Drugs

IT MAKES NO CENTS – but it might add up to THOUSANDS

One of the first questions we get asked about when we are implementing a new Benefits Plan is about drug costs. How is a company supposed to make sense of them and how can a benefits program keep costs down? Let’s take a look at an example.

The example below is an example of how if 1 employee takes the brand name drug over the generic can cost your company $827.82 in premiums next year:

Lipitor                                                                          $1.97 for a 10mg pill.

Atorvastatin is the generic equivalent cost:              $0.35 per 10mg pill. 

Brand added daily cost:                                              $1.62

365 days a year                                                           $591.30

Insurer charges take the cost up to:                           $739.13

Add in that trend factor:                                             $827.82


Now that one employee is taking that one drug, it may end up costing you $827.82 in premiums next year…OUCH. 

Now multiply this one drug, by all the drugs with generic equivalents and multiply that by all your employees choosing to use the brand, and the questions becomes:

Just how much extra might you be paying??

Now we have not dived into the most ironic part of this whole equation. GenMed is a company that makes Atorvastatin. They are owned by Pfizer. Can you guess what else Pfizer manufactures…? Lipitor. Yes, you read that right, Pfizer manufactures Lipitor but also owns the same company who produces a generic equivalent. Now, we can’t comment on the quality of Atrovastatin as we aren’t medical professionals. But if the same company owns both the generic and the brand name it stands to reason that there may very well be few differences between the two

 Now that we have covered the crazy cost equation, let me leave you with an example of how this plays into a benefits plan:

A friend of mine recently asked me to review her flexible benefits plan.  She is a highly skilled employee working with an international organization with thousands of employees in Canada alone.  Her benefit plan has been gutted.  Massage, Physiotherapy and Chiropractic coverage was reduced.  Dental coverage was cut.  All the bits that employee love to use and give them positive feelings towards their employer had been reduced.  But guess what was left within the plan? If you wanted to purchase the brand name drug, no problem!

The above example truly baffled me! Yes, the plan does most likely reach the company’s financial goals but at the cost of its employee’s enjoyment and well-being. With education and communication to the employees, the cuts may have been easily avoided in the above example. Take a moment today and review your benefits program—you may find that it is time to try something new and implement a new generation of Cost Management Strategies!



Despina Williams is the Vice President of the Employee Benefits Divison at The Dupuis Lange Group. Despina has specialized in benefit plans for over 12 years since joining the Dupuis Langen Group in September 2004.  As VP of the Employee Benefits Division, and with her years of experience, she is confident she can customize benefit plans for even the most challenging industries, such as community services, long-term care, community living, mining, and energy resource. Despina’s number one goal is to find workable benefit plan for organizations in any sector.