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the biggest hurdle for private plans is simply that many plan sponsors are not aware of the developments taking place in the world of brand name and generic drugs. And for those who are following developments, it isn’t clear what actions can be taken to obtain competitive prices.

Even though private plans pay for a significant number of the drugs used by Canadians, private payers have had limited influence on generic drug pricing. But there are options available that can begin to change this. Plan sponsors need to follow developments in this area closely, and

work with their insurance companies to make sure their plans are designed to take full advantage of opportunities that arise, especially in regard to legislative changes.

Plan designs such as managed formularies, including Manulife Financial’s Dynamic Therapeutic Formulary (DTF), encourage plan members to select more cost-effective drugs by offering them higher reimbursement for the drugs listed on the formulary. Plan members can also influence competition between pharmacies by comparison shopping when choosing where to buy.

The Competition Bureau says that in the United States, preferred pharmacy networks and mail order pharmacies have been used to lower drug costs while also creating a more competitive market. Pharmacies compete to be part of the network offering discounted pricing with patient incentives, such as reduced co- payments to encourage plan members to use preferred pharmacies. In addition, mail order pharmacies compete to secure customers who are on long-term medications, offering another competitive alternative to customers and their plans.

In July 2009, the Ontario Ministry of Health and Long-Term Care began a review of the Ontario drug system. The goal of the review is to deliver world class value in the province’s drug system and it will include representation from the private sector. Manulife Financial and the Canadian Life and Health Insurance Association will participate in the review process, representing the interests of plan sponsors in an effort to achieve greater value from generic drugs.

Source: Competition Bureau of Canada, Benefiting from Generic Drug Competition in Canada: The Way Forward.

Tips and tools for employers

Absence and disability solutions

Managing workplace absences and disabilities is always a challenge. The task can become especially important during bouts of economic volatility. To help plan sponsors meet those challenges, Manulife Financial has created a special Benefits Bulletin for employers. The Bulletin discusses the subject of disability and absence management solutions and each article has been written by a member of Manulife’s network of experts across the country. To read about all the tips and tools available to employers and managers who are dealing with absence or disability claims, visit www.manulife.ca/groupbenefits. Look for the “Newsletters” page, then go to “Group Benefits Bulletins” and look for the May 2009 posting titled “Being WellConnected®.”

Benefits Bulletin

May 2009

Information Update for Group Benefits Plan Sponsors and Plan Advisors

Being WellConnected


Donna Carbell joined Manulife in 2000 and holds an MBA from Wilfrid Laurier University. Donna has held a variety of senior leadership roles within Group Benefits and currently Donna is Vice President for our Life, Disability and Absence Management Solutions team.

Even in the best of times, managing absence and disability presents both opportunities and challenges for employers. And over the past number of months, we have heard how employers are struggling with the current economy and the impact that it is having on employees who are away from work due to illness and/or injury. Now, more than ever, it is critical that we work together to focus on the fundamentals of disability management. At Manulife Financial, we are here to help.

A number of factors affect long-term disability trends and absenteeism in the workplace including, but not limited to, the following: the industry you operate in, the age of your workforce, and external factors impacting your workplace such as lay-offs or work- shortages. While there has been little long-term objective analysis on the impact a recession may have on a specific plan’s disability experience, research and our experience at Manulife Financial suggest that group disability claim incidence rates will climb and durations will increase. More recent research suggests that in a quick economic

decline, absenteeism may actually improve as employees are often nervous to be away from work; however, returning employees to work is a challenge for employers due to situations such as downsizing, outsourcing, or shift reductions.

Listening to your concerns, Manulife Financial brought together our network of experts in Group Disability and Absence Management Solutions to provide a practical resource for individuals in your organization who are involved in your disability management program. This resource highlights some of Manulife’s fundamentals and our proactive strategies in disability management, relating those strategies to opportunities in the current economy. Inside this bulletin, you will find helpful tips and tools you can use and share within your workplace.

As always, we welcome your feedback and we look forward to working with you. Please contact your Manulife Financial representative if you wish to discuss this bulletin or explore strategies for your workplace.

This information is intended to assist with the administration and management of group benefits plans. It is not intended for public use.

WellConnected® is offered through Manulife Financial (The Manufacturers Life Insurance Company).

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