February 2020

Toward better communication between the AQPP, insurers, and third-party payers?

A new agreement has been reached between the Association québécoise des pharmaciens propriétaires (AQPP, the provincial association of pharmacist-owners), insurers, and third-party payers. This is the first major update to occur since the creation of Quebec’s Public Prescription Drug Insurance (PPDIP) in 1997.

Back in September 2017, demand for more transparency in pharmacy fees resulted in mandatory disclosure of fees for medications covered by the PPDIP. The new agreement, which came into effect on February 1 of this year, looks at structuring the relationship between pharmacists, insurers and third-party payers, which should make it possible to avoid the imposition of legislative decisions and further open the communication channels between the different parties.

Leeway to design and manage group insurance plans

Historically, the use of a “reasonable and customary price”—the application by an insurer of a maximum price for a given drug—has often been an issue for the pharmacy. The new agreement now recognizes the insurer’s right to manage the plan designed by the promoter, which includes a limitation on the price of a drug.

The agreement also prevents insurers from offering incentives (including such financial incentives as co-insurance, deductibles, etc.) or from suggesting plans with incentives intended to encourage participants to do business with a specific pharmacy for their prescriptions or pharmaceutical services.

The agreement does, however, give promoters the leeway to design a plan that might include certain incentives that the insurer would be allowed to manage. Each insurer will need to take a position on this clause, and incentive management could vary from one insurer to the next.

Beyond this agreement, Quebec’s Act respecting prescription drug insurance dictates that a group insurance plan cannot deny an insured the freedom to choose their own pharmacist. As such, all incentives should abide by this notion of freedom of choice.

Price-comparison tools

Insurers and third-party payers may now provide tools with which to compare prices between pharmacies. These tools are already widely used outside of Quebec, allowing insureds to more easily shop around for their drugs and evaluate the services offered by different pharmacies. Still, these tools will not promote a particular pharmacy model, such as the mail-order pharmacy, which is often cited as a business model for prescription purchases.

Curbing excessive fees

The cost tied to filling a prescription should not vary according to the quantity of drugs dispensed (i.e. as many fees as the number of units), while the cost of clinical work (supervision, adjustment, etc.) could vary based on that factor.

This element recognizes that fee increases may constitute an excessive charge and that there should be a discount for higher-volume purchases of a drug that treats chronic illnesses, where possible. Even quite recently, it has not been uncommon to hear of higher prices being charged for a drug prescribed for over 30 days, and even of pharmacists turning down customers wishing to purchase a prescription drug for a period of more than 30 days.

Nonetheless, some drugs cannot be dispensed for more than 30 days if, for example, the patient’s condition requires closer monitoring or if a drug is likely to lead to dependency and abuse.

Other elements of the agreement
  • A monitoring committee has been created to resolve conflicts, monitor plan efficiency and foster communication between pharmacists, insurers and third-party payers.
  • Verification and audit rights will be better regulated and expanded to cover more than just billing errors.
  • The possibility of compensating pharmacists for additional services is recognized, but these services must not be in the form of routine practices or services that were already being provided at no charge.
  • A task force will be formed to create a fee schedule for high-cost specialty drugs. With some drugs now costing up to $2 million per year for a single insured, it becomes necessary to control the costs associated with their distribution. Such cases are still few in number, however, and each pharmacist must rely of their own experience to set acceptable benchmarks. The sustainability of drug plans is at stake.

In our view, this agreement marks an important step forward, particularly for opening a constructive dialogue between pharmacists, insurers and third-party payers.

There’s nothing quite like a personalized service to help you understand the actual or potential impact of these changes on your drug insurance plans. Need advice? Contact us!

The content of this bulletin is based on information to which our specialists have had access. We will keep you informed of developments as new information on this agreement becomes available, or of any other information that could alter the content of this bulletin.