In Canada, individuals may obtain drug coverage through employer-sponsored private insurance plans. These plans are administered by insurers or by third-party intermediaries known as pharmacy benefit managers (PBMs), which process claims on behalf of insurers. Under these plans, pharmacies must sign service agreements with insurers or PBMs before they can bill for prescriptions.
Preferred provider networks and patient access
To control costs, especially for high-cost specialty medications, insurers may rely on “preferred provider networks” (PPNs). In a typical PPN agreement, the insurer (or PBM) negotiates a private contract with a limited number of pharmacies. Under that contract, participating pharmacies agree to accept lower dispensing fees (the per-prescription professional fee) and smaller markups on the cost of medications. In return, the insurer promises to send a large number of plan members (patients) to those pharmacies; this is the “guaranteed volume.”
Because only network pharmacies can bill the insurer under these agreements, patients needing medications covered under the plan, especially high-cost specialty drugs, are often required to use those selected pharmacies to get coverage. If they go to a non-network pharmacy, their claim may be denied or reimbursed only partially, forcing them either to pay more out-of-pocket, or to switch pharmacies.
Some PPNs are “open”, meaning any pharmacy willing to meet the insurer’s standard reimbursement terms can join and bill under the plan. Others are “closed” or exclusive, meaning only a small, pre-selected group of pharmacies participates. In practice, closed PPNs are most common for expensive specialty drugs, because insurers want to control costs and manage the distribution of these high-price prescriptions.
This structure draws ongoing criticism from regulatory bodies and independent pharmacists; for example, the Ontario College of Pharmacists (OCP) has warned that closed networks compromise patient choice, continuity of care and ethical standards for pharmacy practice, all of which may limit access especially for patients in rural areas or those with specific language or cultural needs. The Competition Bureau Canada has also flagged mandatory closed PPNs as a concern for fair competition among pharmacies and for patient access to local services.
Legislative reform: Bill 68 and the any willing provider model
Recognizing these issues, the Insurance Act (Ontario) is being amended under proposed Bill 68 (Plan to Protect Ontario Act), introduced 6 November 2025, to require an “any willing provider” (AWP) model. Under the new provision, if an insurer reimburses a pharmacy for dispensing a drug under a group plan, it must offer the same reimbursement terms to all pharmacies that are willing to accept them thereby eliminating exclusivity deals. Insurers may still set a maximum dispensing fee or markup, but those financial terms must be applied uniformly across all pharmacies. Pharmacies charging more than the maximum may be excluded, but patients would retain the right to fill prescriptions at those pharmacies, and the reimbursement would be capped at the standard amount.
Proponents argue this change will restore patient choice, allow them to use their preferred local or independent pharmacies, and support competition and access in the pharmacy sector. Those critical of this change include insurers and the Canadian Life and Health Insurance Association (CLHIA), which warns that eliminating exclusivity could raise plan costs and make benefit administration more complex. In December 2025, the law had passed first reading but had not yet come into force. There is no publicly available data on how many plans use closed PPNs, how many patients are affected or what patient outcomes look like under open vs. closed networks.