Provinces signal growing backlash against exclusive deals between insurers and pharmacies

Open this photo in gallery:

Several provincial regulators of the pharmacist profession say they are exploring options to restrict the use of exclusivity deals between insurers and pharmacies, signalling a growing backlash against such arrangements after Ontario called for stricter legislation.

The private health insurance industry has been expanding its use of preferred pharmacy (or provider) networks, known as PPNs, for years, but such deals drew public attention recently when the country’s largest insurer, Manulife Financial Group, announced – and then cancelled – a PPN with Shoppers Drug Mart. The arrangement would have required chronically ill patients to buy certain specialty medications only from pharmacies owned by Loblaw Cos. Ltd. L-T, including Shoppers.

The board of the Ontario College of Pharmacists voted on March 25 to draft a position statement critical of PPNs, and directed staff to work with the Ontario Ministry of Health to develop new regulations restricting the use of PPNs in the province. A staff report issued to the board ahead of the vote cited as a model Quebec legislation, which states that group insurance contracts and employee benefit plans cannot restrict people’s ability to choose their own pharmacist or pharmacy.

Following the vote, The Globe and Mail reached out to the equivalent regulatory authorities in other provinces to ask about their views of PPNs and if they were following developments in Ontario.

Alberta, Manitoba and Newfoundland and Labrador expressed concern about PPNs and said they were looking into their options. Nova Scotia suggested the federal Competition Bureau should investigate PPNs.

Prince Edward Island said it was monitoring the debate in other provinces, while British Columbia and New Brunswick said patient autonomy must be protected, while not commenting on PPNs specifically. The Saskatchewan College of Pharmacy Professionals did not respond to requests for comment.

Many regulators said PPNs can be concerning because they can put business relationships ahead of what is best for patients.

“Central to this concern is the autonomy of patients and their right to choose their health provider to meet their personal health needs,” Alberta College of Pharmacy spokesperson Barry Strader wrote in a statement.

Mr. Strader added that the college is researching the issue along with other provincial pharmacy regulators. “As this is an issue of national concern, pan-Canadian efforts and strategies are important,” he wrote.

Some other regulators shared the view that PPNs required a collaborative approach across jurisdictions.

The College of Pharmacists of Manitoba “supports Quebec’s and Ontario’s advocacy for stricter legislation and recognizes the necessity of restricting the use of PPNs to safeguard the freedom of all people to choose their health care providers,” spokesperson Anja Sadovski wrote in a statement.

She added that each provincial jurisdiction has a unique health care landscape, and that any decision “must be tailored to local needs and considerations.”

The Nova Scotia College of Pharmacists (NSCP) said it raised the issue of PPNs during a consultation with the Competition Bureau in late 2022.

At the time, Manulife had just announced a new partnership with Shoppers Drug Mart, which was in addition to an existing partnership the insurer had with Bayshore Healthcare. The partnership drew more recent scrutiny when Manulife dropped Bayshore and moved to make the deal with Shoppers exclusive, a plan it cancelled following public backlash.

“As we have determined that the NSCP’s authority does not extend to regulating business agreements between insurance companies and pharmacies, we have encouraged the Competition Bureau to assess the appropriateness of these business arrangements,” college registrar and chief executive officer Beverley Zwicker wrote in a statement.

The Competition Bureau would not confirm the meeting with the Nova Scotia College, but said it was watching the PPN issue.

“The Bureau is aware of concerns about restrictive trade practices in the retail pharmacy market, including conduct that forces Canadians to use specific pharmacies,” spokesperson Georgia Simone Fakiolas said in an e-mail. “Pharmacies play a key role in the Canadian health care sector. The Bureau is determined to maintain and promote competition in that sector.”

Some authorities shared Nova Scotia’s concern about whether PPNs were in their power to regulate, given their role is to oversee professionals and not corporations, such as insurers.

The Newfoundland & Labrador Pharmacy Board “is concerned about the potential impact of preferred pharmacy networks (PPNs) on the quality and safety of patient care,” director of communications Julie Reddy wrote in an e-mailed statement.

But she noted the board has no power to regulate insurance providers that are often parties to such agreements, and that “we are actively assessing our role in managing this issue within our regulatory framework to determine if there are any actions we can take to ensure patient care is not compromised.” The NLPB has plans to issue a formal position statement on PPNs after its next board of directors meeting, coming in June.

While the New Brunswick College of Pharmacists would not say that it is considering changes to its regulations, acting registrar Heather Christ wrote in a statement that the college is in contact with other jurisdictions and is monitoring changes elsewhere related to PPNs.

Last year, the New Brunswick College made an addition to its operational goals, “to prevent activities that prioritize business or financial interests over patient care,” without specifically mentioning PPNs.

The College of Pharmacists of British Columbia was not as definitive about future actions on the issue, saying only that the province’s Health Professions Act includes a section on patient choice. That bylaw limits agreements “that limit a patient’s choice of pharmacy,” but also includes an exception for agreements “required or permitted under the bylaws.”

The Prince Edward Island College of Pharmacy said it is monitoring regulatory developments in other jurisdictions, “and will consider how the use of PPNs impact the delivery of pharmacy services for the public of PEI,” registrar Michelle Wyand wrote in a statement.