Unacceptable Cartel Arrangement to Control Drug Prices and Distribution
On February 5, Manulife announced that it was rescinding an arrangement to force the sale of Manulife-insured specialty drugs exclusively through Shoppers Drug Mart and other Loblaw-controlled pharmacies which came into effect January 22. Manulife said that patients who require speciality drugs will be able to fill their prescriptions at any pharmacy and home delivery will continue to be an option. The Manulife insurance and Loblaw retail monopolies along with unknown pharmaceutical manufacturers had formed a cartel to control certain drug prices to their advantage and bring more customers into Loblaw stores. The Manulife/Loblaw cartel arrangement affected 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.
This type of cartel drug deal is called a "preferred pharmacy network arrangement" (PPNA). It means Canadians with pharmaceutical insurance through Manulife had to pick up their specialty drugs through a Loblaw retail pharmacy, except in Quebec where PPNAs are outlawed. In the U.S., PPNAs dealing with all manner of drugs are commonly organized by cartels of private insurance companies, major pharmacy retailers and drug manufacturers.
The Manulife/Loblaw cartel PPNA was not the only one in Canada. Insurance provider GreenShield also has a PPNA for specialty drugs through HealthForward, which is owned and controlled by global drug manufacturer and distributer Cencora. Legislative entities throughout the U.S. have accused Cencora of contributing to the opioid crisis and in one case have won a $25 billion settlement. Cencora has an extraordinary annual global gross income of over one-quarter of a trillion dollars.
The private insurance companies and pharmaceutical monopolies are the loudest opponents of public control of the pharmaceutical healthcare industry. Smaller pharmacy retailers in fact would benefit not only from outlawing PPNAs but even more from a publicly-controlled drug industry both for production and distribution. Free publicly produced and wholesale distributed drugs would greatly increase their customer base. A publicly-controlled drug industry would also open a path toward more public input into drug manufacturing and distribution.
Kyro Maseh, who owns Lawlor Pharmasave in Toronto, denounced the Manulife/Loblaw cartel saying it would destroy his and others' 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. "We're slowly moving towards the American model where it's all going to be just high-volume pill factories," Maseh added.
"The very big and very powerful insurance companies essentially are exercising some of their market power in the pharmacy business," Stephen Morgan, a professor at the University of British Columbia told CBC. He said Canadians in various ways spend 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. Morgan suggests the Manulife/Loblaw cartel wanted to use the power of directing those customers to particular pharmacies in exchange for "kickbacks."
Marc-André Gagnon, a professor at Carleton University, told the CBC that pharmacy markups on specialty drugs, which are costly to begin with, can play a key role in "shadowy" agreements with insurance companies. "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. 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." Gagnon said.
The power and control of these drug, insurance and retail oligopolies point to the necessity to shut them down. They essentially produce very rich people, a global aristocracy that has gained control over the lives of Canadians.
The situation reveals a modern economy that is completely socialized but contrary to this socialized condition is owned and controlled by a small number of very rich people, an economic and political ruling private authority. The people must organize to resolve this antagonistic contradiction between a socialized condition and private authority. The time is now for a new economic and political direction for the country.
This article was published in
Volume 54
Numbers 1-2 - January - February 2024
Article Link:
https://cpcml.ca/Tmlm2024/Articles/M5400111.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca