Amy Miller (left) and Independent pharmacist Ron Yochim at Pharmasave Waterloo Wellness Pharmacy in Waterloo on June 10.Sarah Palmer/The Globe and Mail
As the school year comes to an end, high-school teacher Amy Miller is preparing for an appearance before Ontario’s pharmacy regulator to advocate against a recent move by the Ontario Teachers Insurance Plan. The plan’s new specialty-drug pharmacy, MemberRx, takes away teachers’ rights to choose their own health care provider, she will argue.
Ms. Miller is appearing at a meeting of the Ontario College of Pharmacists on July 8, along with her current pharmacist, Ron Yochim, who has helped her manage her ankylosing spondylitis arthritis. Last year, Ms. Miller received an e-mail saying that her plan would no longer cover the costs for members to use their pharmacy of choice for specialty-care drugs, as of April 4, 2024.
At issue is a brand-new model of pharmacy that advocates say could help keep costs down and make insurance plans more sustainable, but which critics say is an example of “patient steering,” a practice that is attracting more scrutiny across the industry.
MemberRx is a “plan sponsor pharmacy” and was set up by Cubic Health, a Toronto-based company that consults with employee benefit plans and helps to manage those plans. The Ontario Teachers Insurance Plan (OTIP) launched MemberRx in May, 2023, running its own pharmacy to administer expensive specialty medications.
The issue has been in the spotlight since earlier this year, when Loblaw Cos. L-T Ltd.-owned Shoppers Drug Mart cancelled a deal with Manulife Financial Corp. MFC-T that would have required people covered by the insurer to receive specialty drugs exclusively through Shoppers. Regulators are now looking closer at such deals, known as “preferred pharmacy networks” or “preferred provider networks” (PPNs), over concerns that they limit patient choice.
Unlike a PPN, plan sponsor pharmacies are owned by the plans themselves. But in OTIP’s case, what it has in common with a PPN is the direction of patients exclusively to a designated pharmacy. Cubic Health chief executive officer Mike Sullivan said the mandatory nature of MemberRx is necessary to make it work.
“The challenge is, if you make it voluntary, it won’t get used because we have a saturation of outlets,” Mr. Sullivan said, referring to the more than 10,000 pharmacies that exist across Canada. The benefit, he argues, is that it operates with zero earnings before interest, taxes, depreciation and amortization (EBITDA). While MemberRx is registered as a for-profit company, any proceeds generated by the vertically integrated pharmacy go back to improving coverage for members, he said. “The money stays inside the plan.”
Cubic Health also charges OTIP a fee for its services, which include setting up wholesaler relationships for MemberRx, hiring pharmacy staff and handling payroll. MemberRx has a brick-and-mortar facility in Mississauga that employs a team of pharmacists, but all drugs are shipped to plan members.
“There is no profit motive or retail element in the MemberRx model – we ensure that all proceeds are returned proportionally to the benefit plans that have partnered with MemberRx,” OTIP spokesperson Patricia Wilkinson-Bizjak wrote in an e-mail to The Globe and Mail, adding that the goal is to provide “the best coverage, at the best value” to members.
In OTIP’s case, those plan sponsors are the Employee Life and Health Trusts for each of Ontario’s teachers’ unions.
Three out of four of the trusts have so far joined MemberRx: the one for the Elementary Teachers’ Federation of Ontario (ETFO), the Ontario Secondary School Teachers’ Federation (OSSTF) and the Ontario English Catholic Teachers’ Association (OECTA). The remaining trust, for members of l’Association des enseignantes et des enseignants franco-ontariens, is still analyzing the option to transition to MemberRx and will make a decision this fall, spokesperson Mélanie Routhier Boudreau wrote in a statement.
Ms. Miller is not alone. Aly Háji, a lawyer with Ricketts Harris LLP who specializes in regulation of pharmacy practices, said he has also heard complaints about MemberRx from pharmacists as part of his firm’s work on preferred provider networks.
Ms. Miller reached out to the Catholic school teachers’ union to ask if they would reconsider the decision and allow her to continue to work with the pharmacist she trusts. Ms. Miller receives an injection of specialty-care drug Humira every 10 days. The initial e-mail she received specified that members who choose to use a pharmacy other than MemberRx would have to pay out of pocket – something that would cost Ms. Miller thousands of dollars a month. She said OECTA has not responded to her e-mails.
“I consider my benefits part of the compensation for the job that I do,” she said. “This is about privacy and choice, and those are fundamental in our democracy.”
There is another plan sponsor pharmacy in Canada, run by the Alberta Retired Teachers’ Association (ARTA). Cubic Health also helped to set up that pharmacy, called ARTARx, which ARTA now runs independently. The group has decided not to make it mandatory for members.
“We really believe in choice,” ARTA CEO Daniel Mulloy said in an interview. “We have members who really like their community pharmacy; they’ve had a relationship with their pharmacists for years. Why change that?”
Mr. Mulloy specified that ARTA is an unusual case: Because it is the “second payer” after the Alberta Seniors Drug Plan, he said its situation may not apply to other plans. But even with a relatively limited number of users – about 2,500 in Edmonton, where ARTARx has a brick-and-mortar pharmacy – the plan has been able to negotiate better prices on some drugs and other items such as glucose monitors for diabetes. In those cases, it passes on savings to members, allowing their coverage to go further, he said. ARTA is hoping to open a second pharmacy in Calgary to reach more of its members.
“We were paying money out of the plan into pharmacies for dispensing fees and for other services. We thought if we could bring that in-house, maybe we could take that revenue and reinvest it back into the plan,” he said.
Some believe that this way of operating – keeping such pharmacy plans voluntary for members – is a better model.
“At the core of it, it still comes down to patient choice,” said Mike Cavanagh, a pharmacy owner and former board member and chair of the Ontario Pharmacists Association. “Would I say that the plan-sponsor one is better than a for-profit [PPN]? For sure. But if it doesn’t contain that guiding principle, then it doesn’t really sit well with me.”
The three unions whose trusts have joined MemberRx declined multiple requests to answer questions about whether they would be in favour of allowing teachers the choice to opt out if they prefer to work with another pharmacy and whether they believe the shift has been positive for teachers. In all three cases, they referred questions to OTIP, which does not represent teachers. The unions for the elementary and secondary school teachers, OSSTF and ETFO, wouldn’t say whether they had received questions or concerns from members about the new model. The Catholic school teachers’ union, OECTA, denied receiving any such communication, and did not respond when The Globe pointed out that this contradicted the account of one of its members.
“I have received, through the pharmacy team, five to 10 times more e-mails of gratitude and thanks for service and things like that than anybody that has raised any kind of concerns through the union,” Mr. Sullivan of Cubic Health said.
The future of such pharmacies may depend on whether regulators create rules restricting such arrangements. Ms. Miller hopes that her coming meeting with Ontario’s regulator could have an impact.
“Speaking to somebody on the other end of the phone that I don’t know just doesn’t make sense to me,” she said. “I have to be able to trust who my people are in my health care and in my circle.”