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This report is based on medical evidence presented at sanctioned medical congress, from peer reviewed literature or opinion provided by a qualified healthcare practitioner. The consumption of the information contained within this report is intended for qualified Canadian healthcare practitioners only.

HEALTH RESOURCE LINE

March 2009

The number of vaccines is expected to grow exponentially in the coming years—not only for the prevention of infectious disease, but also for the treatment of cancer, asthma, tobacco addiction, obesity and other problems. Public programs do not (or only partially) cover new therapeutic vaccines, so it is up to private insurers to decide whether or not to cover them.

In order to help insurers and employers evaluate the benefits of vaccination in the private sector, Merck Frosst Canada Ltd. organized a conference on January 29 at the Fairmont Queen Elizabeth Hotel to give health industry stakeholders—including medical personnel, health insurance advisors, private group insurance plan managers and employers—the opportunity to present their point of view.

Optimizing employee health through vaccines

“We often hear in the media that we’re overloading children’s immune system, but it’s important to understand that in the vaccines we administer today, the total amount of antigens is significantly lower and purer than in the injections we used to give.”

Dr. Marc Lebel, Pediatric Infectious Disease Specialist, CHU Sainte-Justine

Since the advent of vaccines in 1796, there has been a marked increase in the number of vaccine-preventable diseases, but also a major shift with regard to vaccine production and target antigens. In 1985, children received some 3000 antigens from four vaccines. Today, the immunization schedule includes about 10 vaccines, but the number of antigens administered has decreased to about 130.

A number of organizations issue recommendations in Canada, including the National Advisory Committee on Immunization (NACI), but these recommendations are implemented at the provincial level here, unlike in the US, where a single immunization schedule is followed in all 50 states. Consequently, prioritizing vaccines has not only medical repercussions, but also political and budgetary ones. Additionally, there are often long delays between the introduction of a vaccine on the market and the establishment of a free immunization program.

Many key vaccines are not provided free of charge through provincial vaccination programs. Government decisions are often based on a given vaccine’s cost effectiveness at the population level, which only takes into account direct costs for the government (e.g. the cost of medical personnel, medications, equipment, etc.). For example, in Quebec, influenza vaccines are only free for certain at-risk groups, whereas in Ontario, they are free for everyone. The employer perspective is different: every year, influenza results in an increase in absenteeism and a decline in productivity. Many companies provide their employees with flu shots because it is clear for the employer that the flu is a major disease

The governments will probably never cover certain vaccines, including vaccines for travellers, who are usually reimbursed for medications to prevent malaria and diarrhea, but not for hepatitis A or B vaccines. However, people who contract hepatitis are likely to be much sicker than those suffering from traveller’s diarrhea.

Human papillomavirus (HPV) is the most common sexually-transmitted infection in the world: 70% of sexually-active adults contract it in their lifetime. HPV is a necessary factor in the development of nearly all cases of cervical cancer: the link between HPV and this type of cancer is seven times higher than the link between tobacco addiction and lung cancer.¹ HPV can also cause cancer of the vulva, vagina, penis and anus, as well as precancerous lesions. It is important to stress that the HPV vaccine also protects against anogenital warts, which lead to work absence and considerable costs for employers. Despite free screening tests, cervical cancer remains the second most common cancer among women aged 20 to 44 in Canada.² There is now a vaccine that offers almost 100% protection against the types of HPV that cause cervical cancer. In Quebec, this vaccine is free for young girls 18 and under, and some schools have vaccination programs. However, over 40% of HPV infections affect women aged 20 to 24.³ As a result, a sizeable group of at-risk women will not be protected unless they buy the vaccine themselves. Having a private plan cover the cost of vaccination could help reduce absenteeism due to mandatory regular screening tests, as well as the costs associated with treatment.

It is also in the employers’ best interest to prevent infections among their employees’ children. Rotavirus (RV) is a pathogen that can cause severe gastroenteritis in children. This virus survives on surfaces for a long time and secondary infections in the family are common. Almost all children will experience a RV infection in the first five years of their lives: about 35% of them have to see a physician, 15% visit the emergency room and 7% are hospitalized.⁴ According to a Canadian study, in 57% of cases, at least one parent had to miss an average of 6.4 days of work as a result.⁵ The RV vaccine, which is not included in the Quebec immunization schedule, could have a tremendous positive impact on absenteeism and loss of productivity among parents.

A new shingles vaccine was approved last year and will soon be available. Shingles cause lesions and, in certain cases, postherpetic neuralgia (intense and debilitating pain). The initial treatment is expensive and pain medication is sometimes also needed. In some individuals, shingles can cause substantial disability. This vaccine must first be included in national recommendations and then be approved by provincial committees. There could therefore be a relatively long period—depending on the economy and government priorities—during which this vaccine will be available but not covered.

The impact of vaccination on private insurance plans

“By working together, not only could we maximize the impact we have on reducing the burden for boosting productivity, prosperity and the well-being of individuals and society, but we could also reach this shared objective much sooner.”

James Mansi, Director, Medical and Scientific Affairs, Merck Frosst Canada Ltd.

Vaccination has a direct impact on every individual because it prevents diseases, but it also has an indirect impact on society. By immunizing individuals, we block transmission of the virus, prevent the infection from spreading and thus create herd immunity. In order to reap the benefits of a vaccination program, we must adopt a societal approach, where all stakeholders—the public and private sectors, pharmaceutical industry and individuals—work together.

The public sector must take into account society as a whole. The benefits and cost reductions for the public sector must justify the funds invested in preventing a disease. It is up to the pharmaceutical industry to develop potential vaccines, improve production methods and generate data on vaccine efficacy and safety. It must work with the private and public sectors to conduct studies and compile the necessary data to enable informed decision-making. The private sector is mainly concerned with the effects prevention will have on absenteeism and employee productivity. It is up to individuals to be informed and make responsible decisions about immunization, ask for vaccines and follow the immunization schedule.

There needs to be a clear understanding of the burden of disease in order to appreciate the impact of vaccination. It is not simply a matter of gastroenteritis or genital warts, but also an immense burden on individuals, their family, society, the public health system and the private sector.

Immunization can help prevent the burden of disease for employers, i.e. loss of productivity, absenteeism and disease-related costs that can be avoided. The RV vaccine prevents severe gastroenteritis, which can cause dehydration in children. Preventing this infection therefore has a direct impact on children and an indirect impact on parents who would have to miss work to care for their children or because they themselves are infected.

The burden of shingles has a psychosocial impact: the pain felt by those suffering from postherpetic neuralgia affects all aspects of their lives, notably their concentration and ability to work and interact with their coworkers and family. In Canada, about 130,000 cases of this infection are reported every year, 20,000 of which result in postherpetic neuralgia. Together, this translates annually into about 360,000 visits to the doctor and 4000 hospital stays of about 10 days.^6–8

Every year in Canada, HPV causes some 230,000 abnormal Pap tests that require follow-up, 36,000 new cases of anogenital warts that take months to treat—and, in a high percentage, later reappear—and about 1000 to 1400 cases of cervical cancer.⁹ A Canada-wide study revealed that abnormal Pap test results had a major impact on women because they are a source of stress, depression and anxiety, and lead to a loss of productivity and absenteeism.¹⁰

An assessment was undertaken to determine the budgetary impact HPV vaccinations would have on an insurance company that covers 100,000 people. In an optimistic scenario, it was estimated that a maximum of 700 women a year (excluding women vaccinated under the public plan) would be vaccinated against HPV if the insurance plan covered the full cost of the vaccine. This projection is based on the hypothesis that, like in the public plan, not all eligible women would necessarily request the vaccine even if it were free.

For a clientele of 100,000 people, the cost of full coverage would be about $250,000 in the first year, but would decrease significantly in subsequent years. After seven to 10 years, the costs associated with this vaccine would have all but disappeared for the insurance company, because the number of people needing immunization would decline every year in the private sector. This initial budgetary impact could be mitigated through the use of a copayment, which would reduce the number of women who request the vaccine and consequently lower the cost for the insurance company.

Annual budgetary impact for a given private insurance plan covering 100,000 people in Quebec

There would be no immediate impact on cervical cancer rates, but the impact on the burden associated with abnormal Pap tests and anogenital warts would be immediate and significant.

The insurer’s dilemma: to cover or not to cover vaccines?

As Medavie Blue Cross senior director of sales and customer relations Pierre Marion explained, when the time comes for employers to make a decision, several factors come into play: the economic aspect, the importance of the vaccine, company needs, union pressure, pressure from employees, etc. Employers must also deal with ideas conveyed in the media and take into account numerous employee requests. It is also difficult to alter vested rights by modifying existing coverage.

The choices are not easy, because there is a limit to the amount employers can pay, and it is difficult for them to have all the facts needed to make an informed decision. Employers are very committed to reducing worker absenteeism, provided they have access to statistics and data that clearly illustrate the impact of vaccination. It is hard, however, to prove that a treatment can reduce the number of absences related to certain diseases when the employers themselves do not even know the reasons for the absences.

To keep prices competitive for small businesses, insurance companies must strike a balance between what they want to offer their clients based on their demands and needs on the one hand, and the price they are willing to pay on the other. This notion also exists in large companies, but it is analyzed in a totally different way: often, employers are the ones who decide what they want to cover and all they ask is that they are well informed.

Considering the number of new preventive vaccines and therapies in development, an in-depth analysis of the situation as a whole is needed, not just of specific vaccines. Consultants and employers should review their entire philosophy on healthcare benefits, not just on vaccines, and re-examine the types of coverage they offer employees (e.g. massage therapy).

Vaccination, an emerging challenge

“Vaccination is an emerging challenge in the market. Whether or not you cover it, you’re going to have a decision to make, and it’s best to give it some thought now so you can fully examine the issue and be better prepared.”

Joanne Brosseau, senior consultant, Aon Group Insurance.

Standard insurance contracts generally cover “all drugs that require a prescription.” In Quebec, l’Ordre des pharmaciens stipulates that all vaccines require a prescription. In theory, with this type of contract, the insurer should cover vaccines, but there are often contradictory clauses under which preventive treatments are not covered. Employers who wish to cover vaccines must therefore make sure that the contract clearly sets out the decisions that have been made and that their insurer can give them a certain degree of flexibility in managing vaccines.

Employers must respond to employee requests and make sure their plan is competitive compared to those provided by other employers in the same market. It is difficult to provide indisputable proof of a cost:benefit ratio that justifies vaccine use, but the profitability of many components currently included in employee benefit plans has not been demonstrated. Not only does the cost of the vaccine need to be considered, but also the potentially tens of thousands of dollars in hospitalization and drug costs that will have to be paid out if an employee contracts an infection.

In a group plan, vaccines may be covered under drug insurance or a healthcare account, with the latter option being easier because it does not require changes to the contract. A healthcare account gives employees a set amount that they are free to spend as they see fit, e.g. for massage therapy, travel vaccines, etc. This gives employees the flexibility to choose, while letting employers offer a degree of financial support.

When employee disability is reduced, employers obtain a return on the capital they have invested, even when the drug is expensive, but if the medication covered is for a dependent, it may be another employer who reaps the benefits of this investment. Company immunization programs have the benefit of funnelling costs to employees to maximize the return on the capital invested. Vaccination is also extremely well suited to company health promotion programs.

The cost impact depends on the limits imposed, such as the maximum amount allowed or paid per certificate or claimant per year or for life, etc. For an insurer with good controls in place and a well-defined contract, the impact might be between 0.5% and 2.0% the first year, but since a number of vaccines are not required every year, this impact would likely lessen over time.

A manager’s perspective

Guy Bélanger, a chartered accountant and employee benefits manager at Université de Montréal, administers the group insurance and vacation plans of four groups representing some 6000 union and non-union employees. Group plans are typically renegotiated when the collective agreement is renewed.

Professors were the first group to ask for vaccine coverage, because they often travelled abroad and needed to be protected. The other groups also received this coverage later, with the last group (unionized employees) receiving it in 2007. A cap on vaccine coverage had been initially planned, but little financial data were available to help put a figure on the impact this would have on insurance costs. Negotiations would also have been necessary to modify certain contracts in which the union was involved. As a result, the coverage remained unchanged but since it is unlimited, a cap will probably be necessary later to reduce costs, an option that is being studied with the unions. This approach would be easier to manage with employees than freezing the list of selecting eligible vaccines, because each inclusion or exclusion would have to be justified.

The cost of vaccines represented just over 1% of the overall cost of the drugs covered by the university in 2007. Is it the employer’s responsibility to cover this type of expense? This line of questioning is reminiscent of the business wellness programs of 10 or 15 years ago, which were primarily designed to decrease absenteeism. Many businesses now have such programs in place and there is no longer any doubt about their merit. The same will probably also be the case for vaccines.

There will always be a limit to what can be added to a group insurance plan. An in-depth analysis must be performed in order to put into perspective the services currently covered by insurance (like massage therapy) as well as the cost of covered drugs that must be taken regularly.

Preventive vaccines do not seem so expensive when you take into account the impact they have on reducing the burden of the diseases prevented, diseases that would otherwise result in direct costs for the company in terms of medications, medical care, loss of productivity and absenteeism. The cost of therapeutic vaccines currently being developed is not yet known, but their impact on the treatment of certain chronic diseases, as well as on private and public insurance plans and society in general, could be invaluable.

REFERENCES

1. Franco EL, Harper DM. Vaccine 2005;23(17-18):2388-94.

2. Health Canada. “Cervical Cancer Screening in Canada: 1998 Surveillance Report, 1998.” www.phac-aspc.gc.ca/publicat/ccsic-dccuac/pdf/cervical-e3.pdf.

3. Dunne et al. JAMA 2007;297(8):813-9.

4. Public Health Agency of Canada. “Statement on the recommended use of pentavalent human-bovine reassortant rotavirus vaccine. Canada Communicable Disease Report.” National Advisory Committee on Immunization. RMTC 2008;34(DCC-1):1-33.

5. Sénécal et al. Can J Infect Dis Med Microbiol 2008;19(6):397-404.

6. Brisson et al. Epidemiol Infect 2001;127(2):305-14.

7. Brisson M. “The health and economic burden of HPV infection, genital warts, cervical dysplasia and cervical cancer in Canada.” CIC 2006, Winnipeg, Manitoba.

8. Russell et al. Epidemiol Infect 2007;135(6):908-13.

9. Brisson et al. Vaccine 2007;5(29):5399-408.

10. Le et al. Int J Gynecol Cancer 2006;16(3):1089-93.