The Canadian Pharmacists Association (CPhA) is calling for the regulation of pharmacy benefits managers (PBMs) like Express Scripts Canada and TELUS Health, saying PBM’s practices – undertaken for the benefit of both insurers and the PBMs themselves – is disrupting care and limiting patient choice.
They say these practices are placing unnecessary strain on pharmacies and undermining patient’s ability to choose where they receive care. To draw attention to this unregulated sector of the insurance and pharmacy ecosystem, the pharmacist’s association has released newly published template legislation for different levels of government to consider.
The template legislation proposes to prevent insurers and PBMs from requiring patients to use specific pharmacies. It also proposes to prevent conflicts of interest in the audits PBMs do of pharmacies which the association says are often punitive, sudden and inconvenient. The template also proposes banning administrative fees charged by PBMs for electronic claims submission – the reason the entities were created in the first place.
PBMs are contracted by insurance companies to process the payment of prescription drug claims. The intermediaries were created to reduce the administrative and financial costs associated with paper claims and to reduce out of pocket expenses for patients. Their role has since expanded considerably to include formulary management and rebate negotiations. According to the association, pharmacies, meanwhile, assume all costs for the drug and their services until they are reimbursed by the PBM, sometimes up to a month later.
Highly concentrated industry
“Like the United States, the Canadian PBM industry is highly concentrated, with few large PBMs controlling approximately 80 per cent of all prescription drug claims. This concentration gives PBMs substantial power to impose contracts and implement practices that increase revenue for themselves at the expense of pharmacies and patients,” the association’s researchers write in a Fact Sheet about PBMs.
More, the template also addresses the fact that PBM’s are also the pharmacy’s auditors. “While these audits are intended to detect fraud, PBMs claw back significant amounts of money from pharmacies for minor administrative mistakes that do not involve fraud or intentional misconduct,” they add, calling for rules to prevent conflicts of interest where PBMs benefit from the outcomes of their own audits.
In an interview with the Insurance Portal, Joelle Walker, executive vice president of public affairs with the association, says it’s not at all unheard of for PBMs to claw back the cost of a drug, even when the drug has actually gone to the right patient.
In addition to this, the association filed a complaint against Express Scripts Canada on behalf of 40,000 pharmacists working in more than 12,000 pharmacies with the Competition Bureau, over patient steering and other anti-competitive behaviours that they say are particularly alarming in light of the fact that Express Scripts Canada owns its own pharmacy.
Patient conflicts
As for PBM’s other actions, the association says 36 per cent of pharmacists say they are forced to field multiple patient conflicts each day while managing third-party payer claims; 75 per cent say they spend five hours a week or more managing such claims, with nearly 20 per cent dedicating more than 15 hours weekly to the process. Notably, despite assertions that patient steering is not the widespread problem it is in the United States, 75 per cent of those surveyed by the association say they have been required by third-party payers to direct patients to other pharmacies or preferred pharmacy networks or PPNs.
To date, only Ontario has proposed regulating PPNs. “Our data shows the urgency: when pharmacists spend hours on paperwork instead of with patients, and Canadians are being steered away from their pharmacy of choice, it’s clear intervention is required — and that’s where our draft legislation comes in,” Annette Robinson, chair of the association said in a statement.
