Ontario Premier Doug Ford speaks during a news conference at a Shoppers Drug Mart pharmacy in Etobicoke, Ont., on Jan. 11, 2023. A now-cancelled deal between Loblaw Cos. Ltd. and Manulife Financial Group would have seen patients restricted to buying drugs from Loblaw-owned pharmacies, such as Shoppers Drug Mart, a practice that health care providers are urging the province to restrict.Tijana Martin/The Canadian Press
Health care providers are urging Ontario to restrict exclusive agreements between insurers and pharmacies that limit patient choice, while insurers argue the deals are necessary to keep costs down.
The comments come in formal submissions to the Ontario government’s consultations on whether to restrict preferred pharmacy networks (PPNs), which closed Tuesday.
PPNs came into the spotlight earlier this year with a now-cancelled deal between Loblaw Cos. Ltd. L-T and Manulife Financial Group MFC-T, which would have seen patients restricted to buying drugs from Loblaw-owned pharmacies, such as Shoppers Drug Mart. Since then, the Ontario College of Pharmacists has decried the practice and the provincial government has been consulting the industry on whether to restrict these deals – even pointing to reporting by The Globe and Mail on the pervasiveness of PPNs.
Industry submissions are not posted publicly, so The Globe reached out to a number of groups and asked for copies of their submissions.
Groups that represent health care providers and small businesses are in favour of Ontario restricting these deals, with some advocating for the province to copy Quebec, which bans PPNs entirely.
The Ontario Pharmacists Association (OPA) said restrictions on PPNs are needed to protect patients’ choice of which pharmacists they work with, along with creating an equal playing field for all pharmacies to compete for patients’ business.
The OPA advocated for Ontario to adopt “any willing provider” legislation, which would allow any pharmacy to join an insurer’s preferred network if it can meet the network’s standards.
OnPharm-United, a group that represents 600 independent pharmacies, went even further in its submission and argued the province should ban PPNs altogether.
“If a business’s model depends on forcing customers to use its services instead of earning their trust and loyalty, it reveals a fundamentally flawed approach,” the group wrote in its submission.
The OPA said these deals also affect patient safety because PPNs introduce difficulties for patients in navigating the health care system, and they can result in delays in treatment and negative effects on people’s health. PPNs may force patients to leave pharmacies where they may have comprehensive health records, and transfer to other pharmacies that cannot access those files. That can interfere with pharmacists’ ability to monitor possible drug interactions and medication safety, according to the submission.
The Canadian Life and Health Insurance Association (CLHIA), which represents insurers, is strongly against any restrictions on PPN agreements.
It pushed back against the idea that these deals restricted patient choice, saying that if an insurer won’t cover a member’s medication because of their choice of pharmacy, the member still has the choice to pay out of pocket.
The association also said there is competition in the market because pharmacies can compete against each other for an insurer’s PPN contracts. “PPNs are no different than any other organization or industry that chooses vendors that can offer lower prices and enhanced services,” the submission said.
The insurance group’s biggest argument is that PPNs offer cost savings to insurers – which, it says, are then passed on to employers and employees – because pharmacies will offer lower prices in exchange for guaranteed business. The CHLIA’s submission does not put a number to how much could be saved in premiums, or provide any examples of instances in which participating in a PPN led to lower premiums for plan members.
But other industry groups said insurers have never proven these cost savings have ever materialized or been passed on.
“We have been unable to find credible data in Canada about savings resulting from PPNs in the pharmacy sector – or anywhere else, for that matter, nor have we seen data demonstrating the need,” wrote the Ontario Rehab Alliance (ORA), which represents various health care professionals, including physiotherapists and nurses.
The Canadian Federation of Independent Business (CFIB), which represents 97,000 small businesses across the country, said it “is generally very supportive of measures that reduce business costs,” but “it is extremely unclear that PPNs deliver on that promise.”
The ORA and the CFIB did not specify whether they think PPNs should be eliminated, but did say they feel the deals should be restricted in some way.
“It is crucial that any decisions coming out of this consultation protect free-market access and patient choice,” CFIB wrote.
The Ontario College of Pharmacists said in its submission that it would stop short of making specific recommendations to the province at this time while it decides what it is doing as a regulator of the profession.
However, the college does outline what it sees as many problems with PPNs and, more broadly, “payer-directed care,” in which the payer – such as an employer or insurer – puts restrictions on patients. The college said research showed these arrangements can make it harder for patients to stick to medication plans, or to find care, including in places such as rural communities that have few health care providers. As well, the college said these deals can drive independent pharmacies out of business and contribute to “pharmacy deserts,” where patients have no access at all.
The Ontario government is not currently proposing legislation. The consultation notes the province will review submissions before deciding on its next steps.