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Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada
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Arthur Fabbro - Role of Private Insurance for Prescription Drugs in Canada

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  • The core of Magna’s capabilities and uniqueness is our Engineering. Not only do we design and develop components, but we offer a wide range of engineering services to our customers, from complete vehicle design to crash testing.Magna’s product range is easier to explain by naming the product areas we do not manufacture – namely tires. As you can see, we make almost all parts of the vehicle’s body, exterior, drivetrain and interior.Finally what sets Magna apart from any other supplier in the world is our complete vehicle assembly capability. Knowing how to design and assemble of a complete vehicle gives us a holistic knowledge of the automobile; this is invaluable to our engineering of the components that go into it.Together – these three capabilities make us the most diversified supplier in the world.
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    • 1. Current and future roles of private insurance forprescription drugs in Canada – Employer’s PerspectiveArthur A. Fabbro, Jr.February 26, 2013
    • 2. Table of Contents• Magna International Corporate Overview• Current Employer Rx Challenges• Current Rx Benefit Structure• U.S. & Canadian Rx Plans Compared• Differences between U.S. and Canada PBM Practices• Future Canadian Rx Benefit ConsiderationsMarch 2011 Disclosure or duplication without consent is prohibited 2
    • 3. Global Presence Western Europe 82 32,650 34 Canada 46 18,500 10 35 Eastern Europe 10,900 3 59 USA 16 19,700 37 Asia 22 9,375 Mexico 30 20,400 1 South America 14 5,425 2 2 Africa 100Manufacturing/AssemblyEngineering/Product Development/SalesNumber of Employees ~ 117,000 People | 27 Countries | 305 88 | $28.7 Billion (2011 Sales) (As of Q3 2012)March 2011 Disclosure or duplication without consent is prohibited 3
    • 4. Magna Overview: Global Capability Exteriors Roof Systems Interiors engineering + services Closures Vision Systems product systems Body & Chassis Systems vehicle assembly Seating Hybrid & Electric Vehicles/Systems Electronics Powertrain SystemsMarch 2011 Disclosure or duplication without consent is prohibited 4
    • 5. Current Employer Rx Challenges• Increasing Rx Benefit Cost vs. Competitive Rx Benefit• Rx Adherence for Chronic Conditions• Limited Rx Distribution (Retail, some Mail)• Lack of Employer negotiating power• Limited PBM Rx Program Management• Formulary Management• Lack of Incentives and Value Based Rx Designs• Lack of full price transparencyMarch 2011 Disclosure or duplication without consent is prohibited 5
    • 6. Canada Rx Plan Design Drug Plan Design Current Reimbursement Two Tiers: 90% ODB Formulary*, 80% Prescription Formulary Deductible Nil Dispensing fee cap $8 per prescription Generic substitution Mandatory Out-of-pocket maximum Nil Smoking cessation $250 per lifetime Weight loss drugs $500 per lifetime Fertility drugs $3,000 per lifetime Erectile dysfunction Not coveredMarch 2011 Disclosure or duplication without consent is prohibited 6
    • 7. U.S. & Canadian Rx PracticesKey Rx Practice Magna U.S. Magna CanadaPricing Discounts Mark-upsGeneric Pricing (vs. U.S.) N/A 117%Brand Pricing (vs. U.S.) N/A -47%Rx Rebates (professional allowances) Magna Shares RetainedAverage Dispensing Fees $1.25 $9.70Generic Dispensing Rates (% of scripts) 86% 36%Generic Spend (as % of Total Rx $) 15% 28%Mail Order Pharmacy Utilization Rate (% of total Rx scripts) 61% < 1%March 2011 Disclosure or duplication without consent is prohibited 7
    • 8. U.S. & Canada PBM Services• US PBM • Canada PBM – Adjudicate Claims – Contracted with Insurer – Safety Checks and Drug – Adjudicate Claims Utilization Review – Some Price Negotiation – Negotiate price and – Limited $ Transparency rebates with Pharma – Limited Distribution – Negotiate preferred (Retail and minimal Mail) pricing with retail Rx – Limited Clinical Programs – Manage multiple – Limited DUR distribution channels – Retail, Mail, Specialty – Clinical Programs – Price TransparencyMarch 2011 Disclosure or duplication without consent is prohibited 8
    • 9. Future Canada Rx Plan Considerations• Annual Out-of-pocket maximums• Annual Deductibles• Special Tier for Biologic Rx / Specialty Rx• Pre-authorization for certain Rx• Automatic substitution for Generic Rx• Expand Electronic Claim Submission• Work with Insurance Provider to create new clinical programs (i.e., Step Therapy)March 2011 Disclosure or duplication without consent is prohibited 9
    • 10. Alternatives for Rx Challenges• PBMs must become more than claims adjudicators – Contracting with Private Payers and Insurers (carve-in vs. carve out strategy) – Develop and offer Clinical Programs for effective chronic condition management (Diabetes, Coronary Artery Disease, Asthma, Oncology, HIV/Immunology, etc.) – Robust Formulary Management – Robust Retail Pharmacy Contracting (Preferred Network) – Mail Order Distribution – Specialty Rx / Biologic Rx Distribution – Better Data & Analysis for adequate understanding of Rx spend, cost drivers, utilization, adherence, etc.• Regulatory Reform – Full Price Transparency & Disclosure would drive more competitive practices (Payers, Insurers, Pharma, Pharmacy)March 2011 Disclosure or duplication without consent is prohibited 10
    • 11. March 2011 Disclosure or duplication without consent is prohibited 11

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