Ontario regulator condemns exclusive deals between pharmacies, insurance companies

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A person walks past a Shoppers Drug Mart pharmacy in Bowmanville, Ont. Earlier this 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 has condemned exclusive networks between drug stores and insurance companies, but stopped short of taking immediate enforcement action, after hearing concerns about such arrangements amounting to patient steering and violating the individual right to choose a health care provider.

On Monday, the board of the Ontario College of Pharmacists (OCP) voted to issue a position statement saying exclusive deals called preferred pharmacy networks (PPNs) and other payer-directed care models pose a “potential risk of harm to patients, contravene established ethical principles guiding the profession and conflict with standards of quality patient care.”

The majority of Canada’s largest insurance companies have some form of PPN arrangements with pharmacies, particularly for agreements that cover expensive specialty drugs to treat conditions such as rheumatoid arthritis, Crohn’s disease and multiple sclerosis. The agreements are often complex for consumers to navigate and provide very little transparency on whether there are any financial arrangements between the parties involved.

In an open or voluntary PPN, plan members can choose from an approved list of pharmacies for specialty drugs, or they may fill prescriptions at an out-of-network pharmacy that may be more expensive. In a closed or mandatory PPN, insurers restrict plan members to using only their approved pharmacies, forcing them to pay out of pocket if they go elsewhere.

Earlier this year, Canada’s largest insurer, Manulife Financial Corp. MFC-T, reversed its decision to give Loblaw Cos. Ltd.’s L-T pharmacies the exclusive right to fill prescriptions on certain specialty medications.

That deal caused regulators to take a closer look at PPN arrangements in Canada. Shortly after Manulife cancelled the deal, the OCP voted to draft a position statement critical of PPNs, and directed staff to work with the Ontario Ministry of Health to develop new regulations restricting their use in the province.

In its statement Monday, the OCP said it “has zero tolerance for any payment or reimbursement models involving pharmacies and pharmacy professionals that put patients at risk, disregard patient autonomy, or that get in the way of a pharmacy professional’s duty to put patient interests first.”

The statement only takes aim at closed PPNs, but board members said it was the start of a multistage approach that could lead to a change in regulation.

“It could have gone further,” Michael Nashat, a director of OnPharm-United, which is a network of more than 600 independent pharmacies, said in an interview.

“However, I don’t think they were ready to draft on the spot and ensure there are no unintended consequences, and they really need to ensure that they remain patient-focused and in scope of their powers as a regulator.

“I think policies and regulations and enforcement is what needs to follow … and it sounds like that is coming.”

One example that falls under a closed network is the Ontario Teachers Insurance Plan. Last year, OTIP, with help from health care company Cubic Health, launched its own in-house pharmacy, MemberRx, to be the exclusive supplier of specialty-care drugs to its members.

Amy Miller, a high-school teacher in Waterloo, attended Monday’s board meeting to share her concerns about being forced to switch from her original pharmacy to MemberRx and called on the OCP to take a stance on PPNs. She manages her condition, ankylosing spondylitis arthritis, with the high-cost Humira drug.

“A person’s right to choose their health care provider instead of being steered is something that should be protected,” Ms. Miller told the board.

“These small shifts are never obvious in their initial stages. They are not meant to be sold under the guise for convenience or saving money. But they are meant to infringe on a person’s right to choose what they believe is best for them.”

After the vote, board chair James Morrison said that “we continue to hear concerns from patients and pharmacy professionals about the risks that closed PPNs pose to quality patient care.”

The board on Monday also heard the results of the OCP’s final report into the issue of corporate pressure on pharmacists. College staff conducted a survey of pharmacy professionals in March; its final analysis released last week involved 4,289 responses, or roughly one-third of all professionals in Ontario working for a corporate-owned pharmacy. The OCP also gathered comments from approximately 1,300 participants in virtual town halls.

The survey found that 85 per cent of the respondents are currently experiencing or have previously experienced workplace pressures, including to meet quotas to increase revenues, while 70 per cent were currently experiencing pressures. A few chains – Rexall, Walmart, and Loblaw-owned pharmacies including Shoppers Drug Mart – had more than 80 per cent of respondents report workplace pressures.

In both the survey and the town halls, pressures to meet certain volumes or revenue targets were the most common subject of comments.

The most commonly cited instances of pressure included MedsChecks, in which pharmacists call people to review their medications; distribution of naloxone kits to combat overdoses; other services such as providing opinions on pharmaceuticals; and minor-ailment assessments, which can include prescribing drugs for common illnesses.

The last example stood out, according to the report, as more than one-third of professionals reported being pressured to perform assessments in five minutes or less, while a further 50 per cent reported pressure to complete them in 10 minutes or less.

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