Effective January 1, 2008, pharmacists/pharmacy owners are now required to report the use of the professional allowance monies received for products dispensed under the Ontario Drug Benefit (ODB) program, in addition to reporting the total amount of professional allowances. The Code of Conduct that governs the use of professional allowances is included in the regulations made under the Ontario Drug Benefit Act (ODBA) and the Drug Interchangeability and Dispensing Fee Act (DIDFA) and identifies how professional allowances may be used. Based on consultations with the Ontario Pharmacists' Association (OPA) and the Canadian Association of Chain Drug Stores (CACDS), the allowable uses have been allocated to four categories for the purposes of reporting the use of professional allowance monies.

The four categories are :
i) Pharmacy/Pharmacist Programs;
ii) Private Counselling Areas;
iii) Compliance Packaging; and
iv) Pharmacy Staffing Cost

The reporting on use only applies to expenditures under the public drug programs (i.e., the ODB program and the Trillium Drug Program). To simplify this process, expenditures may be allocated on a percentage basis. For example, if ODB prescriptions account for 40% of total prescription sales, then 40% of the total expenditures within a category may be identified as public use expenditures.

Costs reported for each category may be based on actual or standard costs. In some situations a combination of both cost calculations may be used. The costing method used is identified in the template. Supporting documentation must be kept on file for a minimum of two years and be readily available to support the audit of the reports. When using standard costing, you must keep a record of how the standard cost was calculated and provide supporting documentation upon request.

The total amount of professional allowance monies received and expended for the public and private sector drug claims will continue to be reported as the total/aggregate amount as noted in the previous reports.

Further to the November 1, 2006 Notice from the Executive Officer, '...manufacturers are permitted to provide professional allowances up to a limit of 20% of generic sales to pharmacies for the ODB Program.' In other words, the total amount of professional allowances that may be received and used based on public expenditures may not exceed 20%.

i) Pharmacy/Pharmacist Programs

Funds that are used to deliver pharmacy programs including clinic days, education programs provided by the pharmacist and disease management programs will be reported in this section. Examples may include flu clinics, blood pressure and blood glucose monitoring programs, and asthma education programs. This category also includes funds provided to pharmacists and pharmacy staff to attend education programs.

Costs Include:

• communication material (pamphlets, advertising)
• education material provided at the event
• supply and material costs
• pharmacy staffing costs to deliver the program or to support the regular pharmacy business while other staff are delivering the program
• additional staffing costs e.g., cost to supply nursing staff

Pharmacy staffing costs may only include actual wage/salary costs, statutory and health and dental benefits, as well as bonus payments* (on an interim basis). As an example, recent wage and benefit surveys indicate $45 to $60 hourly wage for pharmacists and managers.

Any staffing costs included in this use category may not be included in the fourth category, 'Pharmacy staffing costs'.

* Bonus payments, such as employee retention bonuses, may be included in the pharmacy staffing cost calculation, but must be reported as a separate line on the reporting template. Bonuses payments used for discretionary items such as cars, trips, etc. may not be included.

a. Actual Cost

• cost information tracked by pharmacy for individual programs and reported as an overall cost

b. Standard Cost

• standard costs calculated for programs and education events for the pharmacy - total amount reported as an overall cost

c. Combined Cost

• combination of standard and actual costs

ii) Private Counselling Areas

This category includes costs of constructing or renovating private counselling areas and the capital assets purchased for those areas.

• expenditures related to the cost of constructing or renovating private counselling areas
• capital assets purchased for the private counselling area

The total costs may be reported over a number of reporting periods to a maximum of two years. For audit purposes, the total expenditures and allocations across reporting periods will need to be documented and maintained on file.

a. Actual Cost

• cost to build/renovate private counselling area

b. Standard Cost

• standard costs calculated on a per square foot or other average cost basis as a component of a broader construction project

c. Combined Cost

• combination of standard and actual costs

For Ontario Drug Benefit claims, professional allowances may be used to support the cost of compliance packaging for dispensing prescriptions to long-term care homes or where the prescriber has directed, in writing, on the prescription that a reduced quantity may be dispensed and the pharmacist has dispensed the product in compliance packaging. The use of the professional allowances to support these activities is reported in this section.

For claims not submitted to the ODB program, professional allowances may be used to support the cost of compliance packaging, per the Code of Conduct.

• costs associated with the individual packaging (e.g., card, blister, dosette, Dispill) and strip packaging and labelling
• capital costs for LTC compliance machines e.g., dispensing machines, component and running costs for dispensing machines
• staffing costs associated with non-automated compliance packaging

Pharmacy staffing costs may only include actual wage/salary costs, statutory and health and dental benefits, as well as bonus payments* (on an interim basis). As an example, recent wage and benefit surveys indicate $45 to $60 hourly wage for pharmacists and managers.

Any staffing costs included in this use category may not be included in the fourth category, 'Pharmacy staffing costs'.

* Bonus payments, such as employee retention bonuses, may be included in the pharmacy staffing cost calculation, but must be reported as a separate line on the reporting template. Bonuses payments used for discretionary items such as cars, trips, etc. may not be included.

a. Actual Cost

• cost information for compliance packages and related costs

b. Standard Cost

• standard costs per prescription, package or patient e.g., cost of 7 day (or daily) compliance package/strip x number of prescriptions or patients

c. Combined Cost

• combination of standard and actual costs

Professional allowances monies used for pharmacy staffing costs for patient care activities, including counselling services, are reported in this fourth category. The amount of professional allowances should be based on the per cent of time spent performing these activities, and should be unique to the pharmacy.

Pharmacy staffing costs may only include actual wage/salary costs, statutory and health and dental benefits, as well as bonus payments* (on an interim basis). As an example, recent wage and benefit surveys indicate $45 to $60 hourly wage for pharmacists and managers.

* Bonus payments, such as employee retention bonuses, may be included in the pharmacy staffing cost calculation, but must be reported as a separate line on the reporting template. Bonuses payments used for discretionary items such as cars, trips, etc. may not be included.

a. Actual Cost

• cost information for actual wage/salary costs for pharmacists and pharmacy technicians

b. Standard Cost

• cost calculated based on individual per-pharmacy cost, or chain/group/region cost; for example, based on public reports it is estimated that about 45% of a pharmacist's time is spent on direct patient care activities. Therefore, 45% of his/her salary may be included in this calculation.

c. Combined Cost

• combination of standard and actual costs

Individuals submitting the report must certify the following:

• that the Professional Allowance monies that are reported are an accurate and complete account of all Professional Allowances that have been received by the Pharmacy from Manufacturers during that reporting period; and
• that the Professional Allowance monies were not expended on any of the prohibited uses as described in the Code of Conduct and have been used for the purposes of public and private direct patient care initiatives; and
• that the portion of Professional Allowance monies there were used as described above were allocated and reported accurately.

If you require clarification as to whether or not a program or activity may be eligible as an acceptable use, you may write to the Executive Officer to determine if the activity is permissible. Please include as much as detail as possible. We will respond and will compile common queries and interpretations and post further information on the ministry's website.

Helen Stevenson
Executive Officer, Ontario Public Drug Programs