O. Reg. 220/10: GENERAL

 

ontario regulation 220/10

made under the

ontario drug benefit act

Made: June 5, 2010
Filed: June 7, 2010
Published on e-Laws: June 9, 2010
Printed in The Ontario Gazette: June 26, 2010

Amending O. Reg. 201/96

(General)

1. (1) Subsection 1 (6) of Ontario Regulation 201/96 is revoked and the following substituted:

(6) In recognition of the transition to a pharmacy reimbursement model aimed at supporting professional services, the executive officer shall pay to every operator of a pharmacy an additional amount set out in Column 1 of the Table to this subsection for every claim for payment submitted by the operator during the period set out opposite the amount in Column 2 of the Table if payment is otherwise payable with respect to the claim, but not if the claim is in respect of methadone or an eligible person referred to in clause 18 (8) (b).

Table

 

Column 1	Column 2
$1.00	Period beginning July 1, 2010 and ending March 31, 2011
$0.65	Period beginning April 1, 2011 and ending March 31, 2012
$0.35	Period beginning April 1, 2012 and ending March 31, 2013

(2) Subsection 1 (6) of the Regulation, as remade by subsection (1), is revoked.

(3) Subsections 1 (8), (9) and (10) of the Regulation are revoked and the following substituted:

(8) For greater certainty, a benefit provided as a professional allowance before July 1, 2010 is a rebate and is not a professional allowance unless the manufacturer providing the benefit and the person receiving it report to the executive officer the amount of professional allowance paid or received in the same manner as provided in Schedule 3 of this Regulation as it read before July 1, 2010.

(4) Subsection 1 (11) of the Regulation is revoked and the following substituted:

(11) For the purposes of section 11.5 of the Act, a “rebate” does not include the value of a benefit that is provided in accordance with ordinary commercial terms that meet all of the following conditions:

1. The benefit is provided in the ordinary course of business in the supply chain system of listed drug products that are designated as interchangeable under the Drug Interchangeability and Dispensing Fee Act between any of a manufacturer, a wholesaler, an operator of a pharmacy or a company that owns, operates or franchises pharmacies.

2. The value of the benefit is set out in a written agreement between any of a manufacturer, a wholesaler, an operator of a pharmacy and a company that owns, operates or franchises pharmacies.

3. The benefit relates to an ordinary commercial relationship that is any of the following:

i. A prompt payment discount.

ii. A volume discount.

iii. A distribution service fee.

4. The total value of any benefits does not exceed 10 per cent of the value of the listed drug products based on the drug benefit price in the Formulary and the number of units dispensed by a pharmacy and reimbursed under the Act.

5. A person who receives the benefit reports to the executive officer, if required by the executive officer to do so, the net selling price of the drug products representing the drug benefit price less the value of the benefits received.

(12) For the purposes of section 11.5 of the Act, a “rebate” does not include the value of a benefit provided in accordance with ordinary commercial terms with respect to a listed drug product that is not interchangeable where the ordinary commercial terms are a discount for prompt payment.

2. (1) Paragraph 1 of subsection 11 (1) of the Regulation is revoked and the following substituted:

1. If the original product is a listed drug product, the drug benefit price of the product proposed to the executive officer under clause 12 (1) (d) must be,

i. less than or equal to 25 per cent of the drug benefit price of the original product as set out in the Formulary on the date the product is first proposed for designation as a listed drug product, or

ii. if the drug benefit price of the original product has been reduced by more than 20 per cent in the 24-month period before the date on which the product is proposed for designation as a listed drug product, less than or equal to 25 per cent of the drug benefit price of the original product as set out in the Formulary immediately before the drug benefit price of the original product was first reduced.

(2) Paragraph 2 of subsection 11 (1) of the Regulation is amended,

(a) by striking out “Subject to paragraph 3, if” at the beginning and substituting “If”; and

(b) by striking out “50 per cent” and substituting “25 per cent”.

(3) Paragraph 3 of subsection 11 (1) of the Regulation is revoked.

(4) Paragraph 4 of subsection 11 (1) of the Regulation is amended by striking out “paragraphs 1, 2 and 3” in the portion before subparagraph i and substituting “paragraphs 1 and 2”.

(5) Section 11 of the Regulation is amended by adding the following subsection:

(1.1) For the purposes of paragraphs 1 and 2 of subsection (1), all references to “25 per cent” shall be read as “35 per cent” in the case of a drug product that is not a solid dosage form.

(6) Subsection 11 (2) of the Regulation is amended by striking out “Paragraphs 1, 2 and 3” at the beginning and substituting “Paragraphs 1 and 2”.

(7) Subsection 11 of the Regulation is amended by adding the following subsection:

(6) Despite paragraphs 1, 2 and 3 of subsection (1), the drug benefit price of a product that has atorvastatin as its active ingredient must be less than or equal to 25 per cent of the drug benefit price of the original product as set out on the Formulary on the date the product is first proposed for designation as a listed drug product.

(8) Subsection 11 (6) of the Regulation, as made by subsection (7), is revoked.

(9) Section 11 of the Regulation is amended by adding the following subsections:

(7) Despite paragraphs 1 and 2 of subsection (1), during the three-month period provided for in paragraph 4 of subsection (8), the drug benefit price of a product that meets the conditions set out in subsection (8) must be less than or equal to 50 per cent of the drug benefit price of the original product on the date the product is first proposed for designation as a listed drug product.

(8) The conditions referred to in subsection (7) are the following:

1. The product is first proposed for designation as a listed drug product on or after April 1, 2012 and has not been designated as a listed drug product at any other time.

2. The manufacturer of the product has submitted evidence satisfactory to the executive officer that the manufacturer, or another manufacturer of a product that is interchangeable with the original product, has successfully challenged the patent of the original product with the result that the manufacturer’s product can be sold in Canada earlier than if the patent had expired or if the challenge had not been brought.

3. The manufacturer has not entered into any arrangement, other than a cross-licensing agreement, with the manufacturer of the original product with respect to the product that is proposed for designation as a listed drug product, including any first-to-market arrangement or delayed-entry arrangement.

4. The manufacturer agrees that the exception set out in subsection (7) no longer applies three months after the first product of any manufacturer that is interchangeable with the original product becomes a listed drug product, at which time the drug benefit price shall be as set out in subsection (1) or any other applicable provision of this Regulation.

3. The Regulation is amended by adding the following section:

12.0.2 (1) A drug product that is a private label product shall not be designated as a listed drug product.

(2) In this section, 

“private label product” includes a drug product in respect of which,

(a) the manufacturer applying for the designation of the product as a listed drug product does not directly fabricate the product itself, and,

(i) is not controlled by a person that directly fabricates the product, or

(ii) does not control the person that directly fabricates the product, and

(b) either,

(i) the manufacturer does not have an arm’s-length relationship with a wholesaler, an operator of a pharmacy or a company that owns, operates or franchises pharmacies, or

(ii) the product is to be supplied under a marketing arrangement associating the product with a wholesaler or one or more operators of pharmacies or companies that own, operate or franchise pharmacies.

4. (1) Paragraph 5 of subsection 12.1 (1) of the Regulation is amended by striking out “paragraphs 6, 6.1 and 6.2” and substituting “paragraphs 6.1 and 6.2”.

(2) Paragraph 6 of subsection 12.1 (1) of the Regulation is revoked.

(3) Paragraph 6.2 of subsection 12.1 (1) of the Regulation is revoked and the following substituted:

6.2 Paragraph 5 does not apply with respect to a product that has been designated as interchangeable with an original product where the manufacturer of the interchangeable product has submitted evidence satisfactory to the executive officer of substantial raw material cost increases or substantial direct manufacturing cost increases, and the executive officer is satisfied that the criteria established under section 12.2 have been met establishing that it is in the public interest that the interchangeable product be listed at a higher drug benefit price.

(4) Subsection 12.1 (1) of the Regulation is amended by adding the following paragraph: 

8. If required by the executive officer, the manufacturer of a product that has been designated as interchangeable under the Drug Interchangeability and Dispensing Fee Act shall inform the executive officer of the price that the manufacturer receives for the product, net of the value of any ordinary commercial terms.

(5) Subsection 12.1 (2) of the Regulation is amended by striking out “October 1, 2006” at the end and substituting “July 1, 2010”.

(6) Subsection 12.1 (3) of the Regulation is revoked and the following substituted:

(3) Where the circumstances described in paragraph 6.1 or 6.2 of subsection (1) exist, the executive officer may, in the executive officer’s sole discretion, negotiate an agreement with the manufacturer for any drug benefit price, but,

(a) in no case may the interchangeable product be priced higher than the original product, unless,

(i) the manufacturer has submitted detailed information to the executive officer demonstrating why the product should be priced higher than the original product, and

(ii) the executive officer considers such a price to be in the public interest, having regard to the matters set out in subsection 22 (2) of the Act and to anything else the executive officer considers relevant; and

(b) in respect of a product for which the only applicable circumstances are those set out in paragraph 6.1 of subsection (1), if the circumstance set out in subparagraph 6.1 i of subsection (1) no longer applies, the drug benefit price of the product shall revert to a price that is less than or equal to 25 per cent of the drug benefit price of the original product as set out in the Formulary on the date that the product was first proposed for designation as a listed drug product.

5. (1) Subsection 13 (4) of the Regulation is revoked and the following substituted:

(4) For the purpose of subclause 6 (2) (c) (i) of the Act, the dispensing fee for a listed drug product is the fee set out in Column 2 of the Table to this subsection opposite the description of the pharmacy in which the listed drug product is dispensed.

Table

 

Item	Column 1	Column 2
	Description Of Pharmacy	Dispensing Fee
1.	Pharmacy other than a pharmacy provided for in item numbers 2, 3 or  4	$8.00
2.	Pharmacy located in a postal code with the second figure of 0 or with a score on the Ministry of Health and Long-Term Care’s Rurality Index for Ontario of more than 40, and one of the following conditions is met:	$9.00
	1. There is no other pharmacy within 5 kilometres;.
	2. The nearest other pharmacy is no more than 5 kilometres away and is the only other pharmacy in a 5 kilometre radius.
	3. The nearest other pharmacy is at least 5 kilometres  away but no more than 10 kilometres
3.	Pharmacy located in a postal code with the second figure of 0 or with a score on the Ministry of Health and Long-Term Care’s Rurality Index for Ontario of more than 40, and the nearest other pharmacy is at least 10 kilometres away but no more than 25 kilometres	$11.00
4.	Pharmacy located in a postal code with the second figure of 0 or with a score on the Ministry of Health and Long-Term Care’s Rurality Index for Ontario of more than 40, and the nearest other pharmacy is at least 25 kilometres away	$12.00

(2) Items 1 to 4 of Column 2 of the Table to subsection 13 (4) of the Regulation are revoked and the following substituted:

 

$8.20

$9.22

$11.28

$12.30

(3) Items 1 to 4 of Column 2 of the Table to subsection 13 (4) of the Regulation are revoked and the following substituted:

 

$8.40

$9.45

$11.55

$12.61

(4) Items 1 to 4 of Column 2 of the Table to subsection 13 (4) of the Regulation are revoked and the following substituted:

 

$8.62

$9.69

$11.84

$12.92

(5) Items 1 to 4 of Column 2 of the Table to subsection 13 (4) of the Regulation are revoked and the following substituted:

 

$8.83

$9.93

$12.14

$13.25

6. Schedule 3 to the Regulation is revoked.

7. (1) Subject to subsections (2) to (6), this Regulation comes into force on the day it is filed.

(2) Subsections 1 (1), (3) and (4), 2 (1), (2), (3) (4), (5), (6), (8) and (9), sections 3 and 4, subsection 5 (1) and section 6 come into force on July 1, 2010.

(3) Subsection 5 (2) comes into force on April 1, 2011.

(4) Subsection 5 (3) comes into force on April 1, 2012.

(5) Subsections 1 (2) and 5 (4) come into force on April 1, 2013.

(6) Subsection 5 (5) comes into force on April 1, 2014.