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.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
