The Canadian Drug Insurance Pooling Corporation was established in February 2012 by Canadian insurance companies as a means to share the risk of very high drug costs that repeat year after year. In so doing, insurance company can help maintain the affordability of extended health care insurance plans for employers.

In order to fairly share these drug costs CDIPC’s member companies established rules that have contributed to ensuring consistent insurance premium pricing approaches for employers, while at the same time maintaining a competitive extended health care insurance market for fully insured plans.

Drug plans using CDIPC’s risk sharing mechanism cover thousands of small and mid-size employer extended health insurance plans accross Canada. Through these plans, protection against high cost drugs is offered to millions of Canadians who are employees and their dependants. Without CDIPC being in place, the increases in insurance premiums to cover only one employee needing high cost drugs could render the insurance plan unaffordable to the employee’s employer.

To put insurance plan cost presures born from high cost drugs into perspective, from 2012 through 2015, claims paid by insurers for plan members with drugs exceeding $25,000 per member have increased by 73% (from $132M in 2012 to $229M in 2015).