‘An exceptionally important conversation’: Debating preferred pharmacy networks in wake of Manulife backlash

Manulife’s quick reversal on its plan to have some specialty medications filled only by Shoppers Drug Mart and other Loblaw-owned pharmacies was seen by many as a victory for choice earlier this month.It came after a backlash that included comments from Francois-Philippe Champagne, federal minister of innovation, science and industry, who told reporters he was watching the situation and had concerns about fewer choices for consumers.Just weeks after its announcement, Manulife said it would allow its specialty medication prescriptions to be filled at any pharmacy.“We have listened to and are addressing the concerns we have heard over the past week,” Naveed Irshad, CEO of Manulife Canada, said in a statement. But while this deal made headlines, it’s not unusual for insurance companies to have a preferred pharmacy network, or PPN. In these arrangements, certain pharmacies are the only ones covered to dispense certain drugs under a benefits plan. Read: Manulife to cover specialty drugs at any pharmacy following backlashPPNs are common in the U.S.—and here in Canada as well. The questions around them are more important as they grow in number and with the deadline for a pharmacare deal around the corner. “As we consider systems that may include a combination of private and public drug coverage, this becomes an exceptionally important conversation,” says Jen Belcher, vice-president of strategic initiatives and member relations at the Ontario Pharmacists Association.In Quebec, PPNs aren’t allowed, thanks to legislation introduced in 2016 that prohibits group insurance or employee benefit plans from restricting their beneficiary’s rights to choose pharmacists. But in other provinces, Sun Life, Green Shield and Canada Life have PPN arrangements with pharmacies. Manulife also had a PPN with Bayshore HealthCare for specialty medications for years before it added Loblaw pharmacies to it in the fall of 2022 (the recent controversy was sparked by it removing Bayshore HealthCare from that PPN.) “Preferred provider networks have been around for a while, and really what they are for the most part are insurance providers looking for savings, particularly in high-priced drugs,” says Joelle Walker, vice-president of public and professional affairs at the Canadian Pharmacists Association. That’s partly because the impact of those high-priced medications is growing. Quinn Grundy, an assistant professor at the University of Toronto who researches the pharmaceutical sector, told the Globe and Mail that drug costs are being driven higher by rare disease treatments that cost more than $250,000 annually.Read: A patient’s journey: Shedding light on the value of pharmacy services for Canadians taking high-cost specialty drugsInsurers see this as a way to help employers manage their benefit plan costs and keep coverage affordable for their members while providing consistent quality. The Canadian Life and Health Insurance Association said in an email that “through preferred providers, protocols are established to ensure a high standard of care is consistently met at lower costs—a benefit that is passed on to both employers and Canadians. This is important, particularly as costs for medications continue to increase in Canada, especially for specialty drugs.” Pharmacists’ organizations see it differently. The Alberta Pharmacists’ Association released a statement last year that said they opposed PPNs. It said most of the arrangements “limit prescription dispensing and pharmacy services related to prescriptions, to a smaller subset of pharmacies, sometimes geographically isolated from the plan member, resulting in mail order prescription delivery without any ability to establish an in-person relationship with the pharmacist.” It also described the system as confusing and said patients feel pressured to transfer their care to the PPN pharmacy. “Plan members are given no ability to remain with their existing pharmacy and pharmacist and are encouraged to change providers solely out of a desire to cut cost, without consideration for what is truly in their best interest,” it reads. The Ontario Pharmacists Association also released a position statement noting the rise of PPNs in 2018. Read: How U.S. pharmacy groups and legislators are pushing back against PBMsIt distinguishes between closed network PPNs and open ones. In closed network agreements, where private payers have deals with certain pharmacies for some drugs. In some cases, patients can only get those drugs at those pharmacies; in others, they have to pay more if they choose to go elsewhere. In open networks, private payers set the amounts they are willing to pay, and any pharmacy that can agree to those terms can dispense the drugs. The OPA points out that the Ontario Drug Benefit Program is, in fact, an open PPN. The OPA is “seeing a greater proliferation of the closed network type arrangements,” says Belcher. In 2018, it pushed for “any willing provider” networks that would continue to allow Preferred Provider Networks but only open ones. Walker also says they’re worried about PPNs expanding into other drug areas. “We’re seeing that a lot in the U.S., is that [PPNs] could very well go into the chronic disease management space—companies are looking for major cost savings, and thinking, 'oh, we could do mail order,'” says Walker. “So we have to be really cautious about what that means for pharmacy in Canada.” PPN arrangements of any kind can affect the bottom line of some pharmacies. “When we look at the impact of losing patients . . . it absolutely is a challenge, especially when pharmacies don’t have the opportunity to participate in the bidding process,” says Belcher.But she’s more focused on the potential impact on continuity of care and choice for patients who might have to divide their care or switch to a different pharmacy. “It’s our firm and absolute belief that patients should have the right to choose their healthcare provider,” she says. “Payers should not be directing the care that patients have access to and their choice of provider.” Read: The Express Scripts discussion is broader for Canadian pharmacy

‘An exceptionally important conversation’: Debating preferred pharmacy networks in wake of Manulife backlash

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