GroupNews – January 2022
Eckler’s GroupNews monthly newsletter provides commentary on the issues affecting Canadian group benefit plans.
In this edition:
- British Columbia covers drug to treat rare genetic disorder
- Federal government announced further delay of coming-into-force of the Regulations Amending the Patented Medicines Regulations
- Federal Bill C-3 increases paid sick leave for federally regulated private-sector workers
- Canadian Institute for Health Information report examines national health expenditure trends
Benefit plan management
British Columbia covers drug to treat rare genetic disorder
British Columbia has added burosumab (Crysvita) to the list of Expensive Drugs for Rare Diseases. Funding for the drug will be available to eligible individuals to treat X-linked hypophosphatemia (XLH), a rare genetic bone disorder. Coverage will be considered by the Ministry of Health on a case-by-case, last-resort basis.
While there are approximately 15 individuals under age 18 with XLH in the province, the cost of treatment, which usually starts at the time of diagnosis and continues until bones stop growing, ranges from $130,000 to $1.17 million depending on the age and weight of the individual.
Impact: While XLH is an extremely rare genetic disorder, providing coverage for the high cost of treatment may potentially help to ease the financial burden for those families with no other means of funding. As the federal and provincial governments continue to work toward a national strategy for drugs for rare diseases, private benefit plans should continue to review their own strategies for prescription drugs that treat rare diseases.
Legal and legislative news
Federal government announced further delay of coming-into-force of the Regulations Amending the Patented Medicines Regulations
On December 23, 2021, Federal Health Minister Jean-Yves Duclos announced that the Regulations Amending the Patented Medicines Regulations (Regulations) would be further delayed and are now scheduled to come into force on
July 1, 2022.
The Patented Medicine Prices Review Board (PMPRB) Regulations govern the steps taken by the PMPRB when assessing whether a patented medicine appears to be priced excessively in the Canadian market, and the required information patent-holding companies in Canada must provide to the PMPRB in order to assess pricing. The Regulations are the result of consultations with interested stakeholders that began in November 2019, with draft guidelines released in July 2020. Health Canada first postponed the Regulations until July 1, 2021, to provide pharmaceutical manufacturers with additional time to make changes required by the new reporting requirements, and further delayed the coming into force until January 1, 2022. The latest delay is intended to provide additional time for stakeholders, industry and government to continue to engage in discussions related to the changing pharmaceutical landscape during the ongoing COVID-19 pandemic.
Impact: The Regulations are intended to protect Canadian consumers and plan sponsors from excessive drug prices. Lower drug costs will help workplace benefit plans remain sustainable in the face of more specialized, potentially high-cost drugs. The continued delays may prove costly for plan sponsors, especially now that discussions between the government and interested stakeholders have resulted in delays of almost two years, to July 2022.
Legal and legislative news
Federal Bill C-3 increases paid sick leave for federally regulated private-sector workers
The federal government has announced that Bill C-3, an
Act to amend the Criminal Code and the Canada Labour Code, received Royal Assent. Bill C-3 amends the Canada Labour Code to repeal the existing personal leave that employees can take to treat illness or injury, and to provide 10 days of paid sick leave per year to workers in the federally regulated private sector.
Additional details on the new leave provisions include:
- Employees will earn the first three days of paid sick leave under the new provisions 30 days after the provisions come into force on a date to be fixed by order of the Governor in Council;
- Employees are entitled to earn one day of medical leave with pay for each month of employment up to a maximum of 10 days per calendar year;
- New employees will earn the first three days of paid sick leave 30 days after starting a new job; and
- Employers are permitted to request a medical certificate from an employee for a medical leave of absence that is five days or longer.
The legislation also amends bereavement leave under the Canada Labour Code to provide up to eight weeks of leave for employees who lose a child or experience a stillbirth.
Impact: The COVID-19 pandemic has revealed the difficult position in which many workers find themselves due to lack of mandated paid sick days. Additional paid sick days will provide workers with increased security and help prevent employees from having to work with illnesses in order to remain employed. Employers and private plans that already provide sick leave or short-term disability benefits that are more generous than the legislated minimums are not impacted by these changes.
Research
Canadian Institute for Health Information report examines national health expenditure trends
The report on National Health Expenditure Trends, 2021 recently released by the Canadian Institute for Health Information (CIHI) provides an in-depth view of Canada’s health expenditure trends, including annual spending on drugs, hospitals, and physician services. This year’s report provides final health expenditures for 2019 and preliminary estimates for 2020 and 2021.
Highlights from the report:
- Health spending in Canada is expected to reach $308 billion for 2021 – a growth of 2.2%. While growth in spending averaged 4% per year from 2015 to 2019, total expenditure grew by almost 13% in 2020 due to COVID-19 spending.
- Total average spending on healthcare per person in 2021 is expected to be $8,019 per person with wide regional variations from $9,585 in Newfoundland and Labrador to $7,773 in Ontario.
- Hospitals (25%), drugs (14%) and physicians (13%) represented the three largest health spending categories accounting for 52% of the total health spending in Canada in 2021. COVID-19 Response Funding is expected to account for 7%.
- Of the total health expenditures for 2021, the government pays for approximately 75% while the private sector accounts for the remaining 25%.
Impact: While the response to the COVID-19 pandemic caused a significant increase in health spending in 2020, health spending increases are expected to stabilize to be more in line with pre-pandemic levels.
This publication has been prepared by the GroupNews editorial board for general information and does not constitute professional advice. The information contained herein is based on currently available sources and analysis. The data used may be from third-party sources that Eckler has not independently verified, validated, or audited. They make no representations or warranties with respect to the accuracy of the information, nor whether it is suitable for the purposes to which it is put by users. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such.
Current editorial board members are: Ellen Whelan, Charlene Milton, Philippe Laplante, and Nick Gubbay.