February 21, 2007

Reporting Framework for Professional Allowances

In follow-up to my previous notice dated December 18, 2006, I am writing to provide you with an update on the development of a reporting framework for professional allowances. Pursuant to s.13.1 of the Ontario Drug Benefit Act (ODBA) and the Code of Conduct as set out in the regulations under the ODBA and Drug Interchangeability and Dispensing Fee Act (DIDFA), manufacturers and pharmacies are required to report on specific information relating to the payment, receipt and use of professional allowances. This information is required to be submitted to, and will be retained by, the ministry for audit purposes.

This bulletin is the first of several communications, and is intended to provide an overview of the reporting framework including the type of information that needs to be collected by manufacturers and pharmacies to support the reporting requirements. The ministry will provide more detailed information to stakeholders over the next two months about the framework, and intends to hold information sessions beginning in late March.

Overview of reporting framework
The ministry has been working with external consultants to develop the reporting framework; these consultants have met with manufacturers, wholesalers and many different pharmacies as this work has progressed. The overall aim is to develop a framework that enables accurate reports to the ministry of professional allowances and their use, with minimum amount of work required for pharmacies and manufacturers to submit the data.

Information to be submitted by manufacturers
Drug manufacturers are required to submit information detailing every professional allowance to each individual pharmacy.   The ministry will provide each manufacturer with the total dollar amount of a manufacturer’s drug products reimbursed by the ministry on an individual pharmacy basis for the purposes of calculating the public professional allowances owing.   

Manufacturers are required to retain any related financial and accounting documentation that may be needed as part of the ministry’s audit process.  Two senior officers of the company or the manufacturer’s auditors are required to certify that the information reported to the ministry is complete and accurate.

Information to be submitted by pharmacies
Pharmacies are required to report on the professional allowances they receive and how they are used. Each pharmacy is required to report on an individual level (i.e., each store within a chain is expected to separately submit the required information, although the chain can facilitate such reporting.)  Specifically, pharmacies are expected to submit information that would outline :

• total generic drug sales for drug products reimbursed under the Ontario public drug programs and those sold in the private market
• amount of professional allowances received based on generic drug products reimbursed under the Ontario drug programs and those sold in the private market
• type of activity as described in the definition of professional allowance in both the ODBA and DIDFA regulations (i.e. number of clinic days or education days held at the pharmacy, education event attended by the pharmacist, or the number of prescriptions dispensed as compliance packaging).

Please note that the reporting framework requires pharmacies to record actual costs for some activities; for other activities, the framework assigns a “standard” cost to that activity and does not require the pharmacist to track the actual costs for an activity. For example:

Patient counselling activity; Compliance packaging
Pharmacists only need to record the number of times they perform a patient counselling activity or prepare compliance packaging. Pharmacists are not required to estimate the cost of that activity; rather, once the number of times they perform an activity is inputted into the system, the framework automatically calculates a “standard” for those activities.

Please note that “patient counselling activities” are activities beyond the standards of care, as defined by the Ontario College of Pharmacists, for dispensing a prescription. For example, patients may require additional teaching to take their medication properly (e.g., aerochamber teaching).

Education events; Clinic days; Disease management activities
Pharmacists must include the actual cost of an education event, as the cost may vary depending on the venue/event.

Pharmacies are required to retain all documentation related to the use and reporting of professional allowances that may be needed for the ministry’s audit process.  Two senior officers of the operator of the pharmacy, or company that owns, operates or franchises pharmacies, or by their auditors will be required to certify that the information reported to the ministry is complete and accurate. For smaller independent pharmacies, the owner and bookkeeper may be required to certify the information.

Frequency of reporting
Each manufacturer and pharmacy is required to report the above information to the ministry on a bi-annual basis.  Reporting is due two months after the end of bi-annual period in order to allow for sufficient time to gather the necessary information pertaining to the professional allowances paid and received.  The first reporting period is from January 1, 2007 to June 30, 2007.  The reporting deadline for this period is no later than 5 p.m.  August 31, 2007. 

Next steps
The ministry continues to consult with stakeholders on the specific details of the reporting framework for professional allowances.  The ministry will provide updated information on its website, including details concerning the actual method of reporting and the specific types of supporting documentation the ministry expects of manufacturers and pharmacies.

The ministry intends to organize several ½-day sessions beginning in late March with stakeholders to present the reporting framework.  Furthermore, the ministry will prepare detailed information packages for individual pharmacies that include the worksheet and step-by-step explanation of the reporting process.

Ronald Sapsford
Executive Officer, Ontario Public Drug Programs