Insurer’s pharmacy deal draws fire from doctors
A top insurer has announced restrictions on where its clients can purchase certain high-cost drugs — including the weight loss GLP-1 pharmaceuticals Ozempic, Mounjaro and Wegovy.
The medications, developed to treat diabetes, have soared in popularity on the island for treatment of obesity, putting pressure on the healthcare system because of their high price tag.
While Allshores Ltd said its deal with Phoenix Stores would help to address the rising costs of medication for the company’s clients, the Bermuda Medical Doctors Association said it was seriously concerned about the side-effects of the policy.
Independent pharmacies also spoke out against the plan, stating that it would have a long-term negative impact on the healthcare system and drug costs.
The Bermuda Health Council said tonight that in response to the public response to the announcement, it would engage with the insurer and stakeholders to better understand the impact it would have on patients and providers.
A BHC spokesman said: “We intend to facilitate open dialogue about where the system is heading and how to balance affordability, competition, innovation and access in a way that works for Bermuda.
“We will also examine whether additional measures are needed to strengthen transparency and support fair competition within the pharmaceutical supply chain.
“This is about more than one company or one contract. It is about ensuring that Bermuda’s healthcare system remains sustainable, equitable and centred on patients as we navigate real economic and scientific pressures.”
In a statement on Monday, an Allshores spokeswoman said that as of March 1, clients would be directed to Phoenix pharmacies for a suite of medications.
Along with GLP-1 drugs, the list includes a variety of medications ranging from ADHD medication Adderall to specialised pharmaceuticals for conditions such as cystic fibrosis and psoriasis.
The spokeswoman said high-cost prescription drugs including GLP-1 treatments, biologics and oncology therapies have become responsible for more than 30 per cent of expenses, despite representing about 3 per cent of prescriptions.
Allshores said the move was undertaken in keeping with requests from its employer clients, and was “increasingly common internationally” for cost containment.
The selection of Phoenix pharmacies followed a request for proposal process.
Effective from April 1, new prescriptions for the listed medications filled at other pharmacies will be subject to coverage under separate health plans.
The spokeswoman said pharmacy benefits would not be reduced, adding: “Benefit schedules have not changed and coverage levels remain the same. In some cases, coverage for certain high-cost medications has improved.
“For most plans, eligible medications continue to be covered at 100 per cent with no co-pay or deductible when dispensed through the designated pharmacy partner.”
Allshores said the move would not affect regular prescriptions, with members free to fill non-high-cost medications at pharmacies of their choice in line with their existing coverage.
However, the BMDA said the policy raised serious concerns about patient choice, medication safety, administrative burdens and the increasing corporatisation of medical care.
A spokeswoman said: “If patients are required to obtain certain medications from one pharmacy while continuing to fill other prescriptions elsewhere, complete medication profiles may not be visible in a single system.
“Without seamless integration across pharmacies, this fragmentation could increase the risk of incomplete drug-to-drug interaction screening, duplicate therapies, missed contraindications and delays in identifying adverse medication combinations.
“Medication safety depends on comprehensive oversight. Any system that separates prescription records must ensure that patient safety remains the top priority.”
The spokeswoman added that redirecting patients to a designated pharmacy required additional co-ordination between physicians, pharmacies and insurers, with the additional administrative costs likely to be passed on to patients.
The BMDA also noted that Allshores, which came out of the merger of BF&M and Argus last year, had acquired medical practices in Bermuda, sparking concerns from the Bermuda Health Council.
The spokeswoman said: “When an insurer both owns medical practices and directs patients to a single designated pharmacy provider, the healthcare landscape shifts towards vertical integration.
“Healthcare decisions should remain grounded in physician clinical judgment and individualised patient needs, not corporate consolidation strategies.”
The move also drew fire from independent pharmacy owners, who said in a joint statement that the change would have a significant impact on the island’s healthcare system.
The statement said: “Pharmacies routinely support one another to ensure continuity of care when shortages arise, and limiting dispensing to one provider increases the risk of disruptions that could affect vulnerable patients.
“This policy also reduces patient choice and places new limitations on the trusted relationships patients have with their community pharmacists.
“A diverse and competitive pharmacy sector is essential to ensuring timely access, fair pricing and high-quality patient care across the island.”
The pharmacists said that concentrating prescriptions on one wholesaler could drive up costs over time, stating that independent pharmacies can help to keep costs down by sourcing from different markets and wholesalers.
They said the policy could also set a precedent that forces other insurers to adopt similar models, endangering the viability of independent pharmacies.
In a letter to Kim Wilson, the Minister of Health, the independent pharmacists said that the approach taken by Allshores would bring “irreparable damage” to the island, and urged the Government to consider any impact.
The letter said: “The continued vertical integration of Allshores and CG Insurance and its impact on the healthcare sector, with seemingly no checks and balances to protect the public’s interests, needs to be addressed.”
The BHC said that it does not regulate private contracting agreements between insurers and finances, and while the body was aware of a request for proposal, consultation with the council was not required under law.
However, the BHC spokesman said the public reaction reflected a wider issue.
The spokesman said: “Bermuda has more than 30 pharmacies serving a population that has been gradually declining.
“In a small country, when the number of providers grows while the population shrinks, margins tighten. Even relatively small changes in how medicines are distributed can have significant ripple effects for small businesses and for patients.
“We also rely heavily on a single primary importer to negotiate and manage national pharmaceutical supply. That provides stability, but it limits our leverage in global pricing negotiations.
“At the same time, Bermuda frequently sources medicines from some of the highest-priced markets in the world. By the time importation, distribution and retail margins are added, costs compound quickly.”
The BHC said that while patient choice and physician independence were valued, access, competition, infrastructure and affordability must be carefully balanced.
He added: “Cost containment must never come at the expense of safety. Concerns about medication visibility, co-ordination of care and administrative burden are valid and must be addressed through strong safeguards and monitoring.
“As Bermuda advances universal health coverage, we are implementing the national drug formulary to introduce clearer pricing discipline.
“We are also strengthening procurement and importation frameworks so that Bermuda is not unnecessarily tied to the highest-cost supply chains when safe, quality alternatives exist.”
A spokeswoman for the Ministry of Health also said it recognised the public interest in how the arrangement may affect patient choice.
The spokeswoman added: “The Ministry of Health remains committed to ensuring that everyone in our community can access the medications they need and this continues to be one of our highest priorities.
“Work to improve pharmaceutical affordability is already under way. The national drug formulary will introduce clearer pricing oversight to help ensure essential medications remain accessible and affordable for all residents.
“The ministry remains committed to a health system that supports access, sustainability and fairness.”
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