Last week, the Ontario Ministry of Finance announced a 60-day consultation period, asking consumers and industry players to weigh in as it considers whether to limit preferred provider networks, or PPNs.Jacques Boissinot/The Canadian Press
The head of the Ontario Pharmacists Association is encouraging the province to ban exclusivity deals between insurers and pharmacies, saying that regulation is needed to protect people’s right to choose their pharmacist and other health care providers.
Last week, the Ontario Ministry of Finance announced a 60-day consultation period, asking consumers and industry players to weigh in as it considers whether to limit preferred provider networks, or PPNs.
In those arrangements, pharmacies sometimes provide drugs at a lower cost to insurance plans, in exchange for those plans directing people to fill prescriptions through a preferred pharmacy. But little is known about the financial details of such deals, or who benefits from the cost savings.
“We think it’s an important consultation, and we hope that the outcome will be the elimination of what has become problematic in the Canadian market, which is payer-directed care,” said Justin Bates, chief executive officer of the Ontario Pharmacists Association, an advocacy group that represents thousands of pharmacy professionals.
PPNs have attracted more scrutiny and criticism in recent months. Earlier this year, Canada’s largest insurer, Manulife Financial Group MFC-T, cancelled a deal with Loblaw Cos. Ltd. L-T following a public backlash. The PPN arrangement would have restricted Manulife plan members to exclusively fill their specialty drug prescriptions at Loblaw-owned pharmacies, including Shoppers Drug Mart.
“The reason I think this has gained so much traction is because we’ve seen an increase in the number of these types of exclusive arrangements, either for a select few medications or all,” Mr. Bates said. “And it is not always transparent and it’s not always by the consent of the patient.”
Among the options that the provincial government is considering is requiring insurers to open PPNs to any pharmacies willing to participate under an insurer’s terms. Mr. Bates said the OPA will be recommending an “outright ban,” but that the group would also support “any willing provider” regulations as well.
While the province is contemplating rules that would address insurers, the provincial regulator, the Ontario College of Pharmacists, has also been considering new rules to limit pharmacists’ and pharmacies’ use of PPNs. Any regulatory changes it proposes would require government approval.
The college “strongly supports” the government’s consultation, and plans to make a submission saying “that closed PPNs and other payer-directed care models pose potential risk of harm to patients, contravene established ethical principles guiding the profession and conflict with standards of quality patient care,” spokesperson Dave Bourne wrote in an e-mailed statement to The Globe and Mail.
Major pharmacy retailers – including Loblaw, Walmart Canada, Costco Wholesale Canada and Rexall owner McKesson Canada – declined to comment on their thoughts on the consultation, or whether they plan to make submissions as part of the process.
Some of Canada’s largest insurers – including Manulife, Sun Life Financial Inc. and Canada Life – also said they welcome the opportunity to provide submissions on the topic of PPNs.
Sun Life established its voluntary PPN agreement about a decade ago to help mitigate the rising costs of specialty medications, Sun Life Health president Dave Jones said in an e-mail.
“Our approach to PPNs strives to uphold a high standard of patient choice and care, while helping Canadian employers afford comprehensive benefit plans for their people,” Mr. Jones said.
Benefits provider GreenShield, which has a closed PPN of 1,800 pharmacies and clinics that provide certain specialty drugs, said it is reviewing the consultation documents and the questions being posed. The government has asked for information on issues including the impact of PPNs on competition in the pharmacy sector; their effect on consumers’ choice and access to medications; and how prices differ in insurance plans that have PPNs versus those without.
Desjardins Insurance said it would participate in the consultation through the Canadian Life and Health Association, while Empire Life declined to comment and referred The Globe to the association.
CHLIA spokesperson Susan Murray said in an e-mail to The Globe that the one of the association’s top priorities is to help employers “manage the costs” of their benefits plans.
This is important, particularly as costs for medications continue to increase in Canada, especially for specialty drugs,” Ms. Murray added.
With Canada’s largest province considering whether new regulations are needed, some other jurisdictions are keeping an eye on the consultation, which could inform their own decisions on PPNs in the future. Quebec already has legislation preventing group insurance contracts and employee benefit plans from restricting people’s choice of pharmacist or pharmacy.
“I know that our counterparts in other provinces are watching [Ontario] closely, and I’m sure they’re very much advocating that their governments follow suit,” Mr. Bates of the Ontario Pharmacists Association said. “… It doesn’t make sense to me that patients have choice in one province but not in another.”
Representatives of the governments of British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, the Northwest Territories and Yukon all said in e-mails to The Globe that they are monitoring the issue.
The B.C. government is closely monitoring trends as well as initiatives in other provinces, and will take steps if needed,” said Erin Hughes, public affairs officer with the B.C. Ministry of Finance.
Mr. Bates said he hopes that the discussion in Ontario could prompt other provinces to consider further regulations. He pointed out that the industry has seen other changes happen across the country, such as the decision in some provinces to expand the “scope of care” for pharmacists to allow them to treat minor ailments and prescribe some medications.
“If we’re moving in this direction in Ontario, we can certainly look to other provinces to adopt something similar,” he said.