Information

Preferred Provider Networks in the Employer-Sponsored Drug Insurance Sector

Regulation Number(s):
N/A
Instrument Type:
Information
Bill or Act:
N/A
Summary of Proposal:
The Ministry of Finance is consulting on the role of Preferred Provider Networks (PPNs) in Ontario's employer-sponsored drug insurance sector. In the context of pharmacy benefits, a PPN is an agreement between an insurer and one or more pharmacy operators to offer discounted premiums in exchange for preferential access for the pharmacies. PPNs are primarily associated with pharmacy benefits plans sponsored by employers for the coverage of specialty medicine.

This consultation aims to obtain input from diverse stakeholders to help the government better understand the role of PPNs in Ontario's pharmacy benefits sector, learn about the advantages and disadvantages of different types of PPNs, and assess if any government action is required.

While responses are welcome from all interested stakeholders, the consultation features questions tailored for each of the following categories:
1. Consumers (i.e., Ontarians who access pharmacy benefits through a pharmacy benefits plan provided by an employer or other sponsor)
2. Insurers and related stakeholders in the insurance sector (e.g., third party administrators, pharmacy benefits managers, other intermediaries)
3. Pharmacy operators
4. Employers and other organizations which sponsor pharmacy benefits plans.

The government is not proposing any specific legislative or regulatory changes at this time. If, following this consultation, the government proposes any particular policy, stakeholders will have an opportunity to provide input in a future consultation.

In addition to the specific questions, the Ministry welcomes all other input to the PPNs and their impacts on consumers, insurers, pharmacy operators, and employers.

This proposal is posted for a 60-day public review and comment period from 23 August 2024 to 22 October 2024. You may send comments by email to FIPUConsultations@ontario.ca.
Analysis of Regulatory Impact:
The Ministry of Finance is not currently proposing legislative or regulatory changes, and thus there is no regulatory impact. However, in the event that feedback to this consultation paper leads to future legislative or regulatory changes being proposed, the Ministry will undertake necessary analysis to identify direct compliance costs or benefits and will conduct a second consultation.
Further Information:
Proposal Number:
24-MOF018
Posting Date:
August 23, 2024
Comments Due Date:
October 22, 2024
Contact Address:
Financial Institutions Policy Branch
Ministry of Finance, Financial Services Policy Division
95 Grosvenor Street, 4th Floor, Toronto, ON M7A 1Z1