Drug System Reforms

Our Plan

picture of pills

Fairer prices for drugs

  • Ontario has been paying higher prices for generic drugs than most other developed countries.
  • The higher price has largely been due to the system of professional allowances, which generic drug manufacturers have been paying pharmacists who stock their products. That in turn forces them to keep their prices high, a cost that is borne by taxpayers, employers and patients.
  • In 2009, generic drug manufacturers reported paying pharmacy owners more than $750 million in professional allowances, with pharmacy owners themselves revealing that 70% were used for rebates instead of patient care.
  • The government has passed legislation that will end the system of professional allowances.
  • Eliminating professional allowances allows for:
    • Prices of most generic drugs purchased through Ontario’s public drug plan to be reduced by at least 50 per cent to a maximum of 25 per cent of the reference brand price.
    • The cost of generic drugs purchased out-of-pocket or through private employer drug plans to be reduced by more than 50 per cent over a three year period.

More Support for Pharmacies in Rural and Under-serviced Areas

  • Dispensing fees paid by the Ontario government will increase by up to $5 for every Ontario Drug Benefit prescription filled in rural or remote areas of the province.

More support for pharmacists

  • All dispensing fees paid by the Ontario government have been increased by at least $1 for every Ontario Drug Benefit prescription.
  • In the following years, dispensing fees paid by the Ontario government will increase annually until April 1, 2014 when the dispensing fees payable under the Ontario Drug Benefit program will be between $8.83 and $13.25.
  • $150 million will compensate pharmacy owners for the professional services pharmacists provide to Ontarians.

Re-investing savings into healthcare

  • Every single dollar that the government saves by lowering the price of generic drugs is going right back into the health care system to benefit all Ontarians.
  • A large portion of the savings will be used to add new prescription drugs to the Ontario Drug Benefit Program’s formulary. That means seniors and Ontarians on social assistance will have access to more drugs.
  • The rest of the funds will go toward initiatives like increasing the quality of hospitals, hiring more nurses, strengthening home care, or reducing wait times in emergency rooms.

Transparent Drug Systems for Patients Act, 2006

The Transparent Drug System for Patients Act, proclaimed in 2006 was part of the government's plan to reform the provincial drug system and deliver better value for money to the taxpayers of Ontario.

Savings achieved are reinvested into the provincial drug system to support improved patient access to drugs.
The government's plan includes :

  • Achieving significant savings through volume discounts for all drugs purchased for the Ontario Drug Benefit Program
  • Improving patient access to drugs through new listing agreements, Exceptional Access, and rapid reviews of innovative drugs
  • Listening to the views of Ontarians through a new Citizen's Council that will advise the Ministry on the social aspects of drug policies and priorities
  • Strengthening transparency by giving patients a role in drug listing decisions of the Committee to Evaluate Drugs
  • Recognizing the valuable role of pharmacists in patient care by paying them for enhanced patient counselling and other professional services
  • Utilizing the expertise of Ontario's pharmacists through a new Pharmacy Council to advise the Ministry and the Executive Officer of the public drug programs
  • Freeing doctors of the burden of paperwork associated with Section 8 drugs

Drug Innovation Fund

Ministry Launches Drug Innovation Fund to Advance Research into Value of Medicines.

In April 2007, the Ministry of Health and Long-Term Care announced the establishment of the Drug Innovation Fund with $5 million available annually to provide Ontario researchers with stable, long-term funding needed to perform systems outcomes research, and evaluate the value of medicines in improving health outcomes.

More information on the Drug Innovation Fund is available on the health care professional section



For More Information

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