Delivering Community Power CUPW 2022-2023

Manulife-Loblaw reversal shows urgent need for universal pharmacare

Canadians are fed up with the private sector’s encroachment on health care

Canadian PoliticsCanadian BusinessHuman Rights

A Shoppers Drug Mart store on Dupont Street in Toronto. Photo from Wikimedia Commons.

After a week of sustained bad press, insurance provider Manulife has reversed its decision to enter into an exclusive preferred partner network, or PPN, agreement with Loblaw-owned pharmacies. Manulife has stated that, in response to public outrage over the proposal—which would have granted the grocery giant the exclusive right to fill prescriptions for drug plan members—they will no longer restrict access to specialty medications.

It was a remarkable about-face for the company, which had repeatedly (and ineffectually) justified its decision by pointing out how few Canadians it would impact.

It was also unusual that such a business arrangement would evoke such a strong public reaction. As Carleton University professor and social, health and pharmaceutical policy expert Marc-André Gagnon told the Canadian Press, “this kind of stuff is always under the radar and basically nobody’s asking questions.” The agreement had been known for about a month but had not been subject to review by the Competition Bureau, nor challenged by any provincial government.

That monopolistic omnicorporation Loblaw was involved in the agreement may have played an important role in bringing more attention to what was an otherwise routine deal between two powerful Canadian corporations. The grocer’s involvement in exacerbating the affordability crisis and its prior involvement in the bread price-fixing scandal likely also played a role in drawing additional attention and inviting a rather significant public backlash.

It is an unlikely and entirely welcome victory for Canadian consumers, health care advocates, small business owners and progressives in general. But it is not a precedent-setting court ruling or decision by the Competition Bureau, just as it is not the only such agreement of its kind right now in Canada. Given the Liberals and NDP are in the throes of negotiating a pharmacare plan, it is important for the public to continue to advocate for the rights of patients and consumers over Big Pharma, retailers, and the insurance industry.

“Manulife just cut a deal with Galen Weston to force Canadians to get their prescriptions at Loblaws,” said NDP Health Critic Don Davies when he learned about the deal last week. “This robs patients of their choice of pharmacist & hurts local pharmacies.”

That may be the least of it. Loblaw CEO Galen Weston has been making a sustained push to eat up as much of the Canadian health care market as possible in recent years. Seizing on the opportunity created by austerity budgets, pandemic mismanagement, and Doug Ford’s highly-controversial health care reforms, Shoppers Drug Mart locations in Ontario are beginning to operate for-profit, pharmacist-led clinics.

Aside from the issue of creeping privatization of health care in Canada, the evident conflict of interest issues have not been addressed. In Alberta, much of the same is occurring, with the province’s United Conservative government similarly arguing that more pharmacist-led private clinics located in Loblaw-affiliated retail stores will improve access to health care. Critics have been sounding the alarm—particularly that the scheme isn’t actually improving access or outcomes—though without much success.

Before Manulife’s retreat, Davies sent a letter to Competition Commissioner Matthew Boswell demanding an investigation into the agreement, noting that Canadians with complex, chronic and life-threatening medical conditions will now have fewer options, particularly if they live in rural areas. Additionally, “pharmaceutical policy experts have raised concerns that this type of exclusive access arrangement […] is a way for insurance companies to exercise their considerable market power in the pharmacy sector,” wrote Davies.

This concern isn’t new. A 2014 article in the Canadian Pharmacists Journal by John Greiss and Mina Tadrous outlined these considerations, noting that “increasing the probability of a patient moving between health providers means weakening the health provider relationship and having to forge new relationships with each transfer. Because PPN agreements with pharmacies may change as frequently as yearly, there is potential for pharmacy hopping, further straining the patient-pharmacist relationship.” The same article concludes, “the financial pressure to change pharmacies is akin to the awarding of loyalty points and other inducements that have been prohibited by most provincial regulatory bodies. If additional research establishes a strong detriment to patient care, there may be a need to limit the ability of pharmacies to enter into these types of agreements.”

Though there is insufficient research on the impact of PPNs on health outcomes, artificially limiting a consumer’s choices is as likely to negatively impact their morale as forced “pharmacist hopping” could result in diminished health outcomes. Greiss and Tadrous noted that there are studies demonstrating that disruptions to an established patient-pharmacist relationship increases the likelihood of errors relating to medication use, as much as it increases the likelihood of pharmaceutical adherence problems. These baseline problems would likely be exacerbated for older people (who may benefit from a particularly close relationship with a pharmacist they’ve known for an extended period), or people in rural or economically disadvantaged areas (where chain stores may not be present). Additional hardships, such as disrupting routines or forcing additional travel, add to the possibility of subpar outcomes.

What’s more, PPNs may constitute a form of discrimination based on a person’s medical condition. An individual requiring medication for a given condition should be free to acquire this medication anywhere they wish and not face a financial penalty from their insurer for frequenting their preferred pharmacist or pharmacy.

Put another way, one’s medical history shouldn’t infringe on their rights as a consumer, especially not in a society whose political and economic foundations are based on a consumer’s unfettered access to a free and fair market.

Those affected by PPNs are precisely those who would most benefit from a close relationship with a pharmacist of their choosing, at a pharmacy in close proximity of their homes. Rheumatoid arthritis, Crohn’s disease, multiple sclerosis, pulmonary arterial hypertension, cancer, osteoporosis—all examples of the conditions requiring the specialty medications that would have been affected by the now-aborted agreement—can negatively impact an individual’s mobility.

If the issue of PPNs comes up in federal pharmacare negotiations, Ottawa might consider following Québec’s lead, where exclusivity deals between pharmacies and insurance providers are illegal. Québec is unique among Canadian provinces in enforcing a mandatory prescription drug insurance program, which provides a generous public alternative to anyone not covered by private plans. The results have been encouraging, with Québecers having better access to more pharmaceuticals than Canadians in other provinces.

A national program could be created along Québec lines—a public system for everyone who doesn’t qualify for private coverage—which could theoretically still allow for exclusivity arrangements on the private side of things. This could potentially create a curious situation in which the public plan is more advantageous than the private equivalent. Time will tell what the dippers and grits come up with, or what’s been compromised to achieve an agreement.

But as the private sector continues eating away at Canada’s hobbled health care system, a national pharmacare program may not be the panacea the NDP and Liberals want and need. As long as private interests are eager to exploit patients for profit, and have the political connections to do so, any improvements to Canada’s health care offerings will come up short.

Much like the Charter defines the rights and responsibilities of the citizen within the constitution, a ‘patients bill of rights’ will be needed as a foundational organizing principle for any substantial improvements of healthcare in Canada.

One thing above all is clear: Canadians are fed up with the private sector’s encroachment on health care as much as they are with backroom corporate deals that would negatively affect their rights as consumers.

It took less than one week to kill what may have been an incredibly lucrative financial agreement. Progressives would be mindful to remember the power of sustained direct action and bad publicity.

And when Canadians demand ‘pharmacare for all,’ it will be clear they don’t mean ‘offer valid only at participating pharmacies.’

Taylor C. Noakes is an independent journalist and public historian from Montréal. In addition to writing regularly for Canadian Dimension, he contributes to the Toronto Star, Jacobin, Cult MTL, The Maple, DeSmog, and the Montréal Review of Books, among others. He holds an MA in Public History from Duquesne University and has worked on the restoration of playwright August Wilson’s childhood home. He is also a frequent contributor to the Canadian Encyclopedia, and once debated several Canadian prime ministers at once on matters of foreign policy.


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