Manulife-Loblaw deal raises questions over ties between insurance companies, big drug retailers

Manulife says its coverage of certain specialty prescription drugs will only apply at Loblaw-owned pharmacies, raising questions over the relationship between insurance providers and major pharmacy retailers.

For independent pharmacists like Kyro Maseh, who owns Lawlor Pharmasave in Toronto, the deal signals another shift away from personalized care for patients who have a longstanding relationship with their local pharmacist.

"What it means for the patient at the end of the day is that they're going to be picking up their medications from a high-volume pharmacy, or mail-order pharmacy for that matter, thus eliminating any sort of personal care in the process," Maseh told CBC News.

Known as "preferred pharmacy network arrangements," such exclusivity deals are common in the U.S. And while they aren't new to Canada, they are gaining traction, which worries pharmacists like Maseh.

"We're slowly moving towards the American model where it's all going to be just high-volume pill factories," he said, noting that some patients might have to travel to get to a pharmacy where their medication is available.

The Manulife-Loblaw arrangement — details of which were shared with plan holders earlier this month — affects around 260 medications under the insurance company's Specialty Drug Care program.

Drugs in this class are meant to treat complex, chronic or life-threatening conditions such as rheumatoid arthritis, Crohn's disease, multiple sclerosis, pulmonary arterial hypertension, cancer, osteoporosis and hepatitis C.

If you're on medication that is covered by the Specialty Drug Care program and are concerned about how this change will affect you, send an email to ask@cbc.ca. 

"The very big and very powerful insurance companies essentially are exercising some of their market power in the pharmacy business," said Stephen Morgan, a professor at the University of British Columbia who specializes in pharmaceutical policy.

Canada spends about $10 billion per year on specialty drugs, which are medicines that cost more than $10,000 per patient annually. The markups on those drugs amount to about $600-$800 million a year, and insurance companies like Manulife want in, Morgan says.

"They want to use the power of directing those customers to particular pharmacies in exchange for, essentially, kickbacks," he said.

The Specialty Drug Care program will be carried out "primarily" through Shoppers Drug Mart and other Loblaw-owned pharmacies, starting Jan. 22, according to Manulife. The company previously also covered specialty drugs through national home and community health-care provider Bayshore HealthCare.

"At this time, to evolve our program, it's appropriate to select a single service provider to move the program forward for the benefit of our customers and their employees," said Doug Bryce, Manulife vice-president of product and platforms, in the announcement.

While arrangements like these aren't new to the Canadian market — insurance provider GreenShield introduced a preferred pharmacy network arrangement for specialty drugs in 2015 through HealthForward — they're becoming more common for specialty drugs, according to Mina Tadrous, an assistant professor at the University of Toronto.