Is it possible Express Scripts Canada will break the camel’s back?

Wow, there has been a lot going on in pharmacy in Canada. I was starting to write a completely different blog, but that update simply had to wait, given the recent communication from Express Scripts Canada (ESC) introducing a monthly service fee to pharmacy providers beginning January 1, 2024.

I’ve been involved with community pharmacy for a long time, but I’ve rarely seen the tumult this proposed user fee has stirred up across the sector. It should raise the hackles of employers and government too! 

To be fair, I wanted to educate myself on what ESC could possibly require these service fees for, so I listened to the video ESC produced on their website featuring Dr. Dorian Lo. In the video, Dr. Lo states that through a new portal that is yet to be developed, enhanced reporting, communication, and processing will be better for pharmacy. 

ESC is a vertically integrated company that operates its own pharmacies and is positioned to direct patient care away from community pharmacies (the most accessible and trusted frontline healthcare providers in Canada) to its corporately owned mail order pharmacies. At the very least this seems like a conflict of interest. It is so galling to be in the middle of filling a prescription for a patient, only to have the third-party insurance screen pop up in reply to an online claim, asking for the pharmacy to direct their patient to a toll-free number, where an operator tells the patient they must begin filling their maintenance medications from the insurer’s own mail order pharmacy. That is the definition of chutzpah!

Besides the sheer audacity of examples like the one above, I’ll share a few additional thoughts on why I believe this has caused such an uproar. As a reminder, my personal thoughts may differ from those of the various organizations I am professionally affiliated with.

The ESC’s service fee proposal feels like a money grab by a pharmacy benefits manager (PBM) which may be positioned to impose such a fee on pharmacies due to their dominant position in the marketplace. Further, they are not allowing pharmacies to either opt out of the fee, or to pass along any fee related to the claim to the patient.

At the beginning of January 2023, NAPRA reported 11,554 licensed pharmacies in Canada. At that time, it showed 1,921 of those pharmacies were in Quebec. Removing Quebec pharmacies from the equation (because they are exempt), ESC stands to gain up to $23 million in annual revenue from this user fee. 

The current financial strain on pharmacy is well documented. Through the pandemic and in these inflationary times we are already experiencing higher costs. In our regulated environment, we are generally unable to pass along these extra costs to patients. If ESC has had to reduce their fees to insurers to entice them to move from a competitor, pharmacy probably looks like an easy place for them to recover lost revenue.

ESC forgot to read the room and the result is they became tone deaf.

While managing patient’s various insurance at the counter may have become a necessary evil, there is not a pharmacy in the land that does not believe this is a huge waste of time at the counter. In the ESC video, Dr. Lo reports that pharmacy currently enjoys between $3.50 and $6.00 in value per prescription submitted and saves 8-10 minutes per prescription over the system used in the late 1980s where pharmacy submitted manual claims for patients. This is tone deaf!

Frontline pharmacy staff are so frustrated with dealing with insurance companies that I believe they either want to charge a processing fee for handling online claims, or they want to have the patient pay and submit. The pharmacy will get their money right away and will gain valuable time speaking to their patients about their health, rather than trying to navigate their insurance. Pharmacy isn’t going back to filling out paper claims. Some pharmacies may decide to do what some dentists do: make their patients pay and submit their own claims for reimbursement.

In responding to a query from the Canadian Pharmacists Association, ESC reported that they consulted with pharmacy before making their plans public and that they regularly met with individual chains and banners. ESC reported they were reacting to changes that have been requested by pharmacies. Forgive me for feeling like we have entered the spin room!

In fairness, it’s probably accurate that stakeholders have been asking carriers to upgrade their systems to accept claims greater than $9,999.99. I believe it was 1990 when CPhA developed the Pharmacy Claims Standard that is still being used today. In 1990, it probably was not contemplated that any therapy would cost >$10,000. 

I invite any chain or banner to weigh in on what else was requested in your consultations with ESC that gave them the idea we are prepared to pay them $23 million per year to support them. 

I could go on about why this is such a terrible idea for all parties, except the ESC shareholders, but I’ll close simply by stating my utter disappointment in ESC for abusing (in my opinion) their position in the marketplace. At a time when frontline healthcare in Canada is so stressed, ESC forgot to read the room (or they read the room and decided pharmacy will once again simply acquiesce). ESC, this may just be the straw that broke the proverbial camel’s back.

Please support your provincial pharmacy advocacy associations and the Canadian Pharmacists Association in their efforts to bring sanity back into this conversation.