In November 2025 the government of Ontario announced it would introduce legislation that would ban closed pharmacy preferred provider networks (PPNs). What’s happened since?
We remain in early days. In recent written statements to Take 5 for Wellness, Ontario’s regulatory body for insurers—the Financial Services Regulatory Authority (FSRA)—confirmed it is working with the government to implement a pharmacy PPN “framework for group drug insurance plans.” In its statement, the Ministry of Finance (MOF) noted it is working with the Ministry of Health as well as FSRA, and that “implementation details are still under development.”
Neither could be more specific about the timing. “At this stage, it is premature to comment on timelines for this work,” stated FSRA. The MOF indicated that “there will be opportunities for stakeholders and regulators to provide feedback.”
The Smart Health Benefits Association (SHBA), Canada’s only advocacy body for private health benefits plans, established in October 2025, will be ready. “We will provide the perspective of the employer and the plan member,” says Roger Thorpe, Chair of SHBA’s Drugs & Pharmacy Working Group and President of Thorpe Benefits in Toronto.
Stephen Frank, President and CEO of the Canadian Life and Health Insurance Association (CLHIA) is also prepared. “Our view as of now is we don’t really have enough detail to know exactly how the coming AWP framework will work and what changes we’ll need to make as insurers,” says Frank.
How we got here
The MOF held a fact-finding public consultation on PPNs in 2024 in response to “growing public discussion and media coverage regarding the impact of PPNs on consumer choice.” It asked for input on whether to maintain the status quo for PPNs or if regulation is required. Read more about the positions of various stakeholders in this article by Take 5.
Following that consultation, the MOF determined that the status quo was not an option. It held a second consultation from May to July in 2025 to “seek public input on potential policy options to regulate the use of pharmacy PPNS.” Two options were put forward:
- Any able and willing provider legislation that would mandate a pharmacy PPN to be open to any pharmacy operator that is able and willing to meet a PPNs’ terms.
- Standardized and mandatory exemptions to pharmacy PPNs so that consumers can access pharmacies outside their network.
In its 2025 Fall Statement, released in November, the Ontario government announced it would proceed with both measures. Specifically, it stated that “the government is introducing legislation that, if passed, would enable an Any Willing Provider [AWP] framework, along with introducing a standardized, transparent process for patients to seek exemptions from PPNs where appropriate.”
It further stated that the AWP framework “would enable any pharmacy willing to match a PPN’s financial terms to join, enabling expanded consumer choice and competition in the pharmacy sector, while maintaining cost-effective access to medications.”
Where we go from here
Given the lack of detail on timing and the fact that new legislation can take months to go through its stages of review—plus the time required to gather feedback from stakeholders—it is reasonable to expect that AWP legislation and a standardized exemptions process will not take effect before 2027.
That said, the writing is on the wall, and this alone “will definitely motivate employers to avoid getting into a closed approach with a PPN,” observes Thorpe.
Public data on the number and types of pharmacy PPNs in Canada is not available. However, it’s common knowledge that PPNs that are closed (i.e., limited to selected pharmacies) and in some cases mandatory (i.e., patients must use a PPN pharmacy to receive coverage) are for high-cost specialty drugs.
In its submissions to the MOF consultations, CLHIA recommended against an AWP model. It noted that closed and mandatory PPNs generate savings for employers and patients through reduced pharmacy markups on high-cost drugs—in some cases by as much as 70 per cent. As well, closed PPNs enable better oversight on the provision of enhanced, consistent services to patients.
Frank adds: “The key for insurers in all those discussions will be to make sure our plans remain sustainable, Canadians get access to those high-cost medications, and that we can continue to provide that wide range of additional supports for patients. We continue to view PPNs as a very important tool and are working closely with government officials to ensure a smooth transition for Ontarians.”
Thorpe notes that closed and possibly mandatory PPNs are most often a tool for large employers. “When you’ve got millions of dollars of drug-claim volume, a change like this would make a difference. But if you have $100,000 or even a half a million in drug claims, you’re not going to consider a closed PPN as a key tactic for drug plan management.”
The end results?
Stepping back, Thorpe also speculates whether an AWP model will make much of a difference in the end. Prospective pharmacies may find it too difficult to match the financial terms of the former closed PPNs, or the requirements of some specialty medications may be too complex and costly. “A lot of this was politically motivated by a free market system, and I’m all for more competition. But we don’t know exactly what it is involved yet, and how this would actually happen in real life.”
Which leads to another concern for both Thorpe and Frank: the risk for confusion and yet more red tape. In its second submission to the MOF, CLHIA stated an AWP model “poses more administrative challenges, adding significant administrative burden on government, regulators and insurers.”
“We certainly don’t want it to create confusion about which pharmacies can come to the table to show themselves as worthy competitors,” echoes Thorpe. “We hope the government will come to us sooner than later for input, to avoid unintended downstream impacts on employers and plan members.”