Private health plans in Canada continue to implement many changes in their design and use of technology aimed at balancing the containment of health expenditures with the improvement of health and wellness. Yet what may be lost in any focus on cost-containment initiatives, is the opportunity for better management of personal wellness. Plan sponsors, beneficiaries (employees and their families), and health product and service providers can find ways to invest in simple reimbursement measures yielding far-reaching returns through better health, productivity and broader cost-benefits for health plans. This is the case for Nicotine Replacement Therapies (NRT) in Canada, which include a variety of non-prescription products used as part of a stop smoking action plan.

These seemingly accessible products actually face substantial barriers to access for those who are at greatest risk of continued tobacco use in Canada. Rather than looking at the reimbursement of smoking cessation products as strictly an additional cost, it is important to consider the net value gained by incorporating the reimbursement of products and services that may fall outside of some private plans’ reimbursement policies.

J&J Consumer Healthcare recently commissioned PDCI to complete a Policy Paper (“Nicotine Replacement Therapy: The Case & Roadmap for Comprehensive Private Coverage”) exploring the reimbursement of NRT under private health plans. This research investigated what opportunities exist for the reimbursement of non-prescription (over-the-counter, or “OTC”) health products. While federal tax legislation governs what is deemed tax exempt (and typically reimbursable) under private health plans, there are important considerations in plan policy and design that may offer flexibility for covering OTC smoking cessation products and services, as part of plan benefits offered among Canadian employers (plan sponsors).

PDCI research uncovered a few considerations:

• Tobacco use remains a serious and complex addiction that carries significant morbidity and mortality risk to Canadians and employers.
• 17% of Canadians still smoke¹, directly and indirectly costing employers about $4,256 per year for each employee who smokes.²
• Despite the OTC status of NRT, which was laudably intended to improve individual access to treatment, access barriers remain for many of the 17% of Canadians still smoking.
• Underutilization may be explained in part by personal cost barriers: In a 2012 survey, more than half of smokers identified product cost as a barrier to NRT self-purchase.³ The Canadian Agency for Drugs & Technologies in Health (CADTH) has similarly recognized that cost can be a barrier for Canadians to access these medications.⁴
• The cost of combination NRT treatment per successful quit is estimated to be $2,377. This is about half the annual cost to an employer in terms of lost work productivity per smoker.

PDCI’s research identified several policy opportunities that could enable improved coverage of NRT under employer health plans, leading to a healthier workforce, improved productivity and presenteeism, and reduced economic burden on broader health benefits & disability expenses.

Click here to read the full report.

1. Statistics Canada. Health Fact Sheet: Smoking, 2016. September 27, 2017.
2. The Conference Board of Canada. Benefits of Workplace Programs: Smoking Cessation and the Workplace. Ottawa, Canada: October 2013.
3. McNeil Consumer Healthcare. HelpThemQuit.ca [Internet]. [updated June 18, 2018; cited August 11, 2018]. Available from: https://www.helpthemquit.ca/treatment/costs-coverage.
4. Canadian Agency for Drugs and Technologies in Health (CADTH). In Brief A Summary of the Evidence: Drugs for Smoking Cessation. Ottawa, Canada: May 2016.