Ontario’s Ministry of Health is consulting on the role of preferred pharmacy networks in the province’s employer-sponsored drug insurance sector to determine how these agreements impact plan members’ costs, choice, accessibility and access to medicine and quality of care.
In its draft consultation paper, the ministry said a common concern among consumers is when PPNs are closed and mandatory, they may restrict the ability of plan members to select the pharmacy at which they can access medication, noting this impact is particularly pronounced for plan members living in smaller or rural communities not served by PPN participants.
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It also said these agreements could potentially impact continuity of care and the risk of adverse interactions for patients who switch pharmacies for some medications but not all due to the terms of their plans’ PPN.
PPNs have come under increased scrutiny, after Manulife Financial Corp. announced it was establishing a preferred pharmacy network with Loblaw Cos. Ltd.’s Shoppers Drug Mart earlier this year. The announcement was met with public backlash, resulting in the insurer reversing its decision.
The Ontario Pharmacists Association has been advocating for more regulation in this area for well over a decade, says Justin Bates, the association’s chief executive officer. “I think it’s an important step in recognition of some of the more recent challenges that we’ve seen emerging in the Canadian marketplace and certainly looking south of our border in the U.S. market, where we’re starting to see some trends that don’t align well with the universality of our health-care system in Canada.”
Some of these arrangements are hurting pharmacies and aren’t necessarily as cost-effective for plan sponsors or their members, he adds, noting in some instances, they may create a conflict of interest. He believes legislation is needed in this area to ensure plan sponsors continue to have mechanisms at their disposal to achieve sustainability of their private health plans, while allowing for fairness and transparency in how these networks are established, maintaining an even playing field that opens the door to participation by all pharmacies across the province and providing choice for plan members.
Read: Manulife, Loblaw deal to deliver specialty drugs sparks access, competition concerns
Indeed, Bates notes that Quebec has regulations in place that prevent insurers from implementing PPNs. “We believe that is necessary to enshrine patient choice in the Insurance Act and have any willing provider — in this case, a pharmacist — be able to provide care to their patients.”
In an email to Benefits Canada, Susan Murray, vice-president of government relations and policy at the Canadian Life and Health Insurance Association, said PPNs “help deliver consistent value, quality and cost containment” to plan sponsors and their members.
“For insurance companies, this often means partnering with providers to support the overall health and well-being of plan members. 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.”
The province is seeking comments from key stakeholders during a 60-day public review and comment period until Oct. 22, 2024.
Read: More private payers seeking to reduce costs turning to preferred pharmacy networks: expert