A Shoppers Drug Mart pharmacy in Bowmanville, Ont. on Jan. 12, 2022. Last year, Manulife Financial reversed its decision to give Loblaw, owner of Shoppers Drug Mart, the exclusive right to fill prescriptions on certain specialty medications.Doug Ives/The Canadian Press
Ontario’s pharmacy regulator is considering a motion to punish pharmacies that strike exclusive deals with insurers restricting how patients receive their medications – the latest example of growing pressure to rein in these agreements, known as preferred pharmacy networks or PPNs.
A board member with the Ontario College of Pharmacists – which oversees the licensing of pharmacy professionals in Canada’s most populous province – tabled the motion at the board’s most recent meeting in December. It calls on the college to declare any pharmacy or pharmacist participating “in any payor-directed care model, including a PPN,” to be in violation of the regulator’s code of ethics.
If passed, the motion would require that any person accredited by the college, or directors or shareholders of a corporation accredited by the college, must exit such agreements within 12 months. It would also require pharmacy professionals to attest that they do not participate in PPNs when they go before the college to have their accreditation renewed.
A legal review of the proposal is now under way, and the board will deliberate on the motion at its next meeting, scheduled for March 24.
“Staff are also continuing to work on other policy options to address the Board’s concerns related to payer directed models and PPNs and an update on that work will also be discussed at the Board meeting,” OCP spokesperson Todd Leach wrote in a statement.
The issue of PPNs drew widespread attention last year, when Canada’s largest insurer, Manulife MFC-T, and the country’s largest grocery and pharmacy retailer, Loblaw Cos. Ltd. L-T, struck an exclusive PPN deal that would have required people covered by Manulife to fill prescriptions for certain specialty medications at Loblaw-owned pharmacies, including Shoppers Drug Mart. Facing public backlash, the companies later walked back the agreement.
But the increased scrutiny on the issue has led to calls for tighter regulation of PPNs. Ontario’s Ministry of Finance is currently reviewing submissions to a consultation it launched on “whether policy intervention is needed” on PPNs.
A spokesperson for the Canadian Life and Health Insurance Association (CLHIA), an industry group that represents the majority of insurers in the country, declined to comment on the OCP motion.
Specialty-care pharmacies Express Scripts Canada and Innomar Strategies (which currently have PPN arrangements with Sun Life Financial Ltd.) and Bayshore HealthCare (which has a PPN arrangement with Manulife) declined to comment on the OCP motion. BioScript Solutions (which is also in a PPN arrangement with Sun Life) did not respond to requests made by The Globe and Mail.
The difference between the Ontario government consultation and the OCP motion is that the government is considering regulation that would affect insurance companies, while the OCP is responsible for regulating pharmacists.
Access to medication is increasingly being dictated by preferred pharmacy networks
“The spirit of the motion is what we have been advocating for,” said Justin Bates, chief executive officer of the Ontario Pharmacists Association, an advocacy group that represents thousands of pharmacy professionals. The group has pushed for prohibiting payer-directed care, both through changes to Ontario’s Insurance Act, as well as through the college disciplining those found in violation of its code of ethics. However, Mr. Bates added that the motion before the college will “require some changes to be practical and effective.”
Insurance companies say that PPNs can provide savings for group benefits plans and their members, at a time when drug prices continue to climb. However, because the terms of such agreements are opaque, it can be difficult to quantify those savings or to demonstrate whether savings trickle down to plan members.
Critics of PPNs, including patient advocacy groups and independent pharmacists, say they unfairly exclude small businesses that lack the clout to negotiate with large insurers, and that they limit people’s access to drugs and restrict their right to choose a crucial health care provider to manage their medications.
In the summer, the college issued a position statement saying that PPNs and other payer-directed care models represent a “potential risk of harm to patients, contravene established ethical principles guiding the profession and conflict with standards of quality patient care.”
But the motion now under consideration urges the college to go further than the position statement and enact a policy against payer-directed care.
Some industry experts applaud the principle of the motion but also question whether it is likely to pass.
“The college council can’t direct the accreditation committee to do something, because the accreditation committee by statute is an independent committee,” said Michael Nashat, a director of OnPharm-United – a network of more than 600 independent pharmacies – and a former chair of the Pharmacy Practice Committee with the regulator.
The college has other policies in place that explain permissible conduct for pharmacies, Mr. Nashat added, citing the example of loyalty points. While loyalty programs such as Air Miles and Aeroplan are not permitted to award points for a member’s payment for prescriptions or other pharmacy services, points that are tied to a credit card are permitted for such purchases.
“It gives you clear examples of when certain behaviour is allowed, and when it’s not allowed,” he said. “I think that’s what we need for this.”
Aly Haji, a lawyer focusing on the industry who trained as a pharmacist, also said that the motion in its current form oversteps the role of the college’s board, which sets general policy but leaves determinations about violations of the code of ethics to independent committees. However, he applauded the motion in its attempt to encourage greater enforcement of those rules.
“I think it’s a really big deal. It clearly sets the tone, and it will clearly be the direction that they take on PPNs,” Mr. Haji said. “It just needs to be operationalized properly.”
The college’s discipline committee has investigated these issues before.
In 2023, it reprimanded a pharmacist who was a senior director at Innomar because the company would not distribute an anti-narcolepsy drug to other pharmacies.
The disciplinary committee found the Innomar pharmacist had entered into an agreement “that restricted a person’s choice of a pharmacist” without their consent.