This Telus offshoot only covers certain drugs for its employees if they come from its own pharmacy

Employees of the health services offshoot of Telus Communications are only reimbursed for certain drug prescriptions if they fill them through the company's own virtual pharmacy, CBC News has learned.

CBC News spoke with three employees of Telus Health who shared screenshots showing details of the new policy, which took effect March 1. It states that the company's "virtual pharmacy' is now the "preferred provider" for the group prescription drug plan, saying it has "lower markups and dispensing fees than the industry average."

The employees expressed frustration that they would no longer be able to choose where they filled certain prescriptions unless they paid out of pocket. They were also concerned that they could miss deliveries of vital medications by using the virtual pharmacy, and that those who live in rural areas could be especially affected. 

These preferred-pharmacy networks, or PPNs, are arrangements that provide exclusivity between insurers and pharmacy chains. Companies use them to save on prescription drug costs. As the deals become more common in Canada, there's growing scrutiny about their impact on competition in the pharmacy sector.

Telus Health broadly specializes in virtual health — an industry that exploded during the pandemic.

The Montreal company offers a wide range of services — including pharmacy management, electronic medical record-keeping and emergency services — that are aimed at patients, employers, insurers and health-care professionals. It has a growing network of in-person health clinics across several provinces.

The new policy applies to two types of prescription medications: maintenance drugs, which are taken on a recurring basis to treat conditions like asthma or diabetes; and specialty drugs, which are used to treat complex or life-threatening conditions — like cancer or Crohn's Disease. 

Telus Health is self-insured — meaning that the company and its employees pay for a benefits package, with the company itself responsible for reimbursing the costs incurred from claims. Enrolling in the plan is optional.

Desjardins has a contract with Telus Health for claims processing only, a spokesperson for the insurance company told CBC News. Telus Health then distributes some benefits through its virtual pharmacy. 

The new policy is "a pretty bold move" by Telus Health, said Steve Morgan, an expert in pharmacare systems at the University of British Columbia.

He said more insurers are realizing they can save costs by taking on work that would normally be done by a separate firm within the supply chain.

"You think you're dealing with different entities at different levels of your interaction with the system," Morgan said. "But in fact, all of those entities are owned by the same player." 

The Canadian Pharmacists Association (CPhA) says on its website that steering employees to specific pharmacies is a growing trend, but its position is that companies should not be able to direct where patients get their medications. It is calling for regulations to restrict PPNs to allow for competition between pharmacies.

Telus Health said in a statement to CBC News that the policy "is in line with the standard approach" of other pharmacy companies and that the move "offers a range of advantages, including enhanced coinsurance and reduced dispensing fees."