With insurers increasingly adopting preferred pharmacy networks to cut costs, some plan members are pushing back, finding it inconvenient and challenging to switch pharmacy providers, not to mention the lack of variety. 

That’s not without the Ontario Financial Services Regulatory Authority (FSRA) stepping up to ensure fairness in this evolving space by widening its oversight to include Preferred Pharmacy Networks (PPNs) and how they fit into insurance companies. With concerns about patient care continuity and access—especially in rural areas—regulatory changes are on the horizon.

What Are Preferred Pharmacy Networks?

Preferred pharmacy networks have existed for almost ten years, yet many benefits plan members remain unaware that these setups have become the norm. Businesses in various sectors often adopt preferred provider networks to ensure consistent value, quality service, and cost control.

“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.” – CLHIA

Why Did This Start In The First Place? 

The FRSA’s mission is to ensure everything runs smoothly—think transparency, fairness, and easy access to care, especially in employer-sponsored benefit plans. So this decision was spurred by the major buzz earlier this year over Manulife’s exclusivity deal with Shoppers Drug Mart, which triggered concerns about limited choices for plan members seeking pharmacies.

This review is just a piece of a giant puzzle, and it’s a valid conversation. So while the FSRA tightens its oversight on preferred pharmacy networks, will we ultimately sacrifice pharmacy choice for lower costs? 

Manulife’s Reversal Came After Public Backlash

The debate surrounding PPNs came to the forefront when Manulife faced criticism for establishing an exclusive partnership with Loblaw’s Shoppers Drug Mart. 

After the public outcry, Manulife reversed its decision, reinstating plan members’ autonomy to select the pharmacies to fill their prescriptions. This incident has sparked wider conversations regarding the delicate equilibrium between controlling costs and preserving member autonomy in the configuration of drug plans.

Manulife’s pharmacy partnership backtrack essentially shows the importance of preserving pharmacy choice in insurance plans. 

Ministry of Health Review on Preferred Pharmacy Networks

The Ministry of Health’s current review of preferred pharmacy networks examines how they impact employer-sponsored drug plans, concentrating on cost implications, patient freedom to choose, and accessibility to vital medications. 

An essential point in their initial consultation paper is the worry that closed, obligatory, preferred pharmacy networks might restrict pharmacy options, especially for plan members in rural regions. The report also highlights concerns about the “potential disruption of continuity of care” if plan members are compelled to switch pharmacies, which could result in medication complications.

Advocating for Stronger Regulations

Justin Bates, CEO of the Ontario Pharmacists Association, is pushing for stricter rules on preferred pharmacy networks to protect community pharmacies. 

Bates argues that PPNs might harm small pharmacies and only sometimes save money as promised. He believes new laws are needed to ensure fair competition, transparency, and sustainability while providing Canadians with pharmacy options and equal care.

Stronger regulations and a focus on transparency and competition will be essential to preserving the integrity of Canada’s healthcare system. This will ensure that all Canadians, regardless of their location or insurance provider, have access to the medications they need, especially given Canada’s growing drug costs. 

Preferred Pharmacy Networks and Their Growing Role

PPNs were originally all about managing costs and handling discounts for certain medications. But now, they’ve morphed into handy tools for plan members to navigate the healthcare maze. These networks make it easier for patients to deal with insurance, like getting reimbursed and managing their cases. 

The growing adoption of PPNs in Canada’s healthcare landscape has been designed to manage costs while delivering consistent value to plan sponsors. 

The Canadian Life and Health Insurance Association (CLHIA) emphasizes that PPNs offer insurance companies the advantage of enhancing the health and well-being of plan members through strategic partnerships with healthcare providers. Still, the debate on cost and care quality will always be there. 

Plan Members Need Reassurance 

The deals between insurance companies and providers must uphold Canada’s care standards. 

As the FSRA and Ontario’s Ministry of Health continue their reviews, the future of preferred pharmacy networks in employer-sponsored benefit plans remains uncertain. Ensuring a balance between cost-saving measures and maintaining pharmacy choice for plan members will be key to the success of any reforms.

Plan members, particularly those requiring specialty medications, need reassurance that care quality will not be compromised in favor of cost savings and that they will continue receiving personalized attention through a PPN or a non-partner pharmacy. 

What are your thoughts on PPNs and their role in Canada’s healthcare system?