Legislation

Transparent Drug System for Patients Act, 2006

Notice to Pharmacies : Regulation Changes made to the Ontario Drug Benefit Act (ODBA) and the Drug Interchangeability and Dispensing Fee Act (DIDFA)

September 28

A number of amendments to regulations under the ODBA and DIDFA have been made to support the government's plan to reform the drug system as a result of the Transparent Drug System for Patients Act, 2006, which received Royal Assent on June 20, 2006.

Proposed draft regulations were posted on the ministry's website on July 24, 2006 for a 30 day comment period. The ministry received many submissions from stakeholders including individual pharmacies, the Ontario Pharmacists' Association (OPA), and other pharmacy associations about the draft regulations. Changes were made to the ODBA and DIDFA regulations based on this feedback. A copy of the amending regulations has been posted on the ministry's website.

Highlights of these changes

Reimbursement : Effective October 1, 2006, the dispensing fee paid for Ontario Drug Benefit (ODB) prescriptions is increased to $7.00 for all pharmacies. Recipient cost-sharing is not impacted by this change.

The change in mark-up on the drug benefit price from 10 per cent to 8 per cent has been deferred to April 1, 2007. In addition, the payment for pharmacy professional services has been deferred to no later than April 1, 2007.

An amendment clarifies that agreements can continue to be entered into with pharmacies regarding methadone capitation payments. This ensures there is no impact to the dispensing of methadone to eligible recipients.

Professional Allowances : The definition of a professional allowance has been expanded from the definition as proposed in the draft regulations and includes additional staffing costs directly related to, for example, clinic days and education days.

Professional allowances in the public sector are capped at 20% of the total generic drug costs reimbursed under the ODB program. A similar cap has not been established for the private sector. The amendments include a formula that will be used to determine if a professional allowance is considered a rebate if the 20% payment cap is exceeded.

Amendments include a requirement for the executive officer to review the Code and the definition of professional allowances by October 1, 2008.

Code of Conduct : Effective October 1, 2006, a new Schedule is added to both the ODBA and DIDFA regulations, which establishes the Code of Conduct and sets out the fundamental principles of the Code; outlines what professional allowances may not be used for; outlines the criteria for the calculation of professional allowances; and establishes reporting requirements. Based on feedback from pharmacists, changes were made to the proposed Code of Conduct, which was posted as part of the proposed draft regulations.

Drug Pricing : The ministry will be notifying manufacturers regarding the price of products as noted in the ODB Formulary. This work is ongoing and the executive officer, in his discretion, will update the prices in the Formulary based on this work. The ministry anticipates that a new Formulary will be published in early October. Due to the volume of changes that are required, the ministry's on-line version of the Formulary will be updated prior to hard copies being distributed to pharmacies.

Effective October 1, 2006, the drug benefit price of generic products listed in the ODB Formulary/Comparative Drug Index may be priced no more than 50% of the comparator (typically the brand) product. Prices will be adjusted to reflect this change to the regulations in the next update. This applies to all generic products currently listed on the Formulary as well as any new generic listings.

The executive officer has the ability to enter into agreements with manufacturers regarding the prices of products listed on the Formulary. Changes may be made to the existing drug benefit price of these products based on an agreement with the manufacturer.

Other Amendments : Certain words and phrases are defined, including the clarification that the Ontario Pharmacists' Association is the "association" that will work with the ministry to establish the terms of reference for the Pharmacy Council as per the ODBA.

Changes have been made to the drug submission requirements under the ODBA to support a rapid review process for certain drugs.

Authority has been provided to the executive officer to determine the drug benefit price for products reimbursed under the Exceptional Access program, in agreement with manufacturers.

For further information on Bill 102, the Transparent Drug System for Patients Act, including the legislation, can be found here.

For More Information

Call ServiceOntario, Infoline at:
1-866-532-3161 (Toll-free)
In Toronto, (416) 314-5518
TTY 1-800-387-5559.
In Toronto, TTY 416-327-4282
Hours of operation : Monday to Friday, 8:30am - 5:00pm