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.
Kyro Maseh, an independent pharmacist who owns Lawlor Pharmasave in Toronto, says the Manulife-Loblaw deal signals another shift away from personalized care for patients. (Craig Chivers/CBC)
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.
“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.
A Shoppers Drug Mart pharmacy is shown in Bowmanville, Ont., on Jan. 12, 2022. (Doug Ives/The Canadian Press)
‘Shadowy’ agreements
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.
Deals like the one between Manulife and Loblaw could make it more challenging for Canadians who rely on specialty drugs to navigate an already-challenging health-care landscape, says Tadrous.
“They may go to their pharmacy that they regularly go to and find out that they have to switch pharmacies or go somewhere else. And so that might be concerning and it could be especially concerning for patients that live in rural areas,” he said.
Pharmacy markups on specialty drugs — which are costly to begin with — can play a key role in “shadowy” agreements with insurance companies, says Marc-Andre Gagnon, a professor at Carleton University whose focus is on social, health and pharmaceutical policy.
“There’s a lot of money for these specific drugs, which means there’s a lot of leeway to organize a system of rebates between the drug manufacturer, the patient support programs, the insurer and the pharmacies,” he said.
“You end up with these very shady deals that are completely under the table, basically, in a system where there’s no transparency and we just don’t know anything about what’s going on.”
After years in the insurance industry, Brandon Sobel and his father stopped working for insurance companies and became public adjusters — insurance experts hired to help homeowners settle their claims. Sobel tells us more about why a growing number of Canadians in the midst of property insurance disputes are turning to adjusters like him for help.
Manulife spokeswoman Emily Vear told The Canadian Press in a statement that the deal with Loblaw will provide “more options” for group benefits members to receive their specialty medications, with patients able to pick up drugs from a Loblaw-owned store or have them delivered to their home.
“We believe in providing our members greater choice in how they access and receive the services they need for their health and wellness,” she said.
“This exciting partnership also enables access to a dedicated team of expert professionals, such as nurses and pharmacists, to help manage and administer our members’ medications.”
CBC News reached out to Manulife for further information.
On its website, Bayshore HealthCare says Specialty Drug Care plan members could have their medication shipped to their home, a clinic or doctor’s office, but it does not mention pickup options at pharmacy locations.
Loblaw spokeswoman Catherine Thomas said in a statement to CBC News that the company is confident that patients’ experience “will remain unchanged, if not better.”
She said that the expansion of the program will impact under one per cent of the patient population requiring specialized medication.
“They can pick up their prescriptions from one of more than 1,800 pharmacies across our network, or have them shipped directly to their home,” she stated.
‘Super-profitable drugs’
Other experts dispute the notion that preferred pharmacy network arrangements hurt competition.
“Manulife has identified that they’re basically able to get a better deal by going to a single provider,” said Aidan Hollis, an economics professor at the University of Calgary, whose research focuses on innovation and competition in pharmaceutical markets.
“When they get that better deal, the idea is that they should be passing on the savings to their insured customers,” he said.
“It’s a single sliver of a deal, so the business is much larger than this. This is just Manulife, it’s not every insurer. Probably those independent pharmacies can collaborate, form chains or collaborations, and figure out a way to try to get back some of that business.
“There’s no reasons for Shoppers Drug Mart and Loblaws to try to get all of it. We would expect other chains to try to do the same thing.”
On its website, Manulife says exclusive availability of its Specialty Drug Care plan does not apply in Quebec.
Gagnon, at Carleton University, said the lack of such restrictions outside of Quebec creates an uneven system where some pharmacies attract “all the big money involved with drugs,” while smaller ones “struggle to cope.”
“If all the super-profitable drugs for pharmacy chains are being captured by just some of the actors, that’s a problem for the rest of the pharmacies,” he said. “They end up with the leftovers, the drugs that are way less profitable.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
