38:2 Bill 102, Transparent Drug System for Patients Act, 2006

Smitherman, Hon George Minister of Health and Long-Term Care

Viewing: Royal Assent (current version) pdf

Bill 102 2006

An Act to amend the
Drug Interchangeability and
Dispensing Fee Act and the
Ontario Drug Benefit Act

Note: This Act amends or repeals more than one Act. For the legislative history of these Acts, see Public Statutes - Detailed Legislative History on www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

PART I
AMENDMENTS TO THE
DRUG INTERCHANGEABILITY AND
DISPENSING FEE ACT

1.  (1)  The definition of "designated" in section 1 of the Drug Interchangeability and Dispensing Fee Act is repealed and the following substituted:

"designated" means designated by the executive officer in the Formulary; ("désigné")

(2)  Section 1 of the Act is amended by adding the following definitions:

"executive officer" means the executive officer of the Ontario public drug programs appointed under the Ontario Drug Benefit Act; ("administrateur")

"Formulary" means the Formulary that the executive officer is required to keep, maintain and publish under the Ontario Drug Benefit Act; ("Formulaire des médicaments")

(3)  Section 1 of the Act is amended by adding the following subsection:

No therapeutic substitution

(2)  Nothing in this Act shall be construed to permit therapeutic substitution.

2.  The Act is amended by adding the following section:

Executive officer and interchangeability

1.1  (1)  The executive officer may designate a product as being interchangeable with another product by designating it as such in the Formulary.

Formulary and interchangeability

(2)  A product becomes interchangeable with another product on the effective date of its being designated as interchangeable with that product, and ceases to be interchangeable with that product on the effective date of the removal of its interchangeability designation by the executive officer.

Requirements for interchangeability

(3)  The executive officer may designate a product as being interchangeable with another product if it is in the public interest to do so, but shall not do so if,

(a) it does not contain a drug or drugs in the same amounts of the same or similar active ingredients in the same or similar dosage form as the other product; or

(b) the prescribed conditions under clause 14 (1) (a) have not been met.

Similar active ingredients

(4)  In clause (3) (a),

"similar active ingredients" means different salts, esters, complexes or solvates of the same therapeutic moiety.

Ceasing to be interchangeable

(5)  The executive officer may remove a product's interchangeability designation,

(a) where authorized to do so under subsection 12.1 (8);

(b) if one of the conditions prescribed under clause 14 (1) (b) has been breached; or

(c) in any case, if he or she considers it advisable in the public interest to do so.

Modification

(6)  Any modification of a designation takes place on the effective date of its being designated in the Formulary as a modification.

Non-application of SPPA

(7)  The Statutory Powers Procedure Act does not apply to anything done by the executive officer under this Act.

Transitional

(8)  A product that was interchangeable with another product immediately before October 1, 2006 continues to be interchangeable with that product until its interchangeability designation is removed by the executive officer.

3.  The Act is amended by adding the following sections:

Rebate, etc.

12.1  (1)  A manufacturer shall not provide a rebate to wholesalers, operators of pharmacies, or companies that own, operate or franchise pharmacies, or to their directors, officers, employees or agents,

(a) for any interchangeable product; or

(b) for any product in respect of which the manufacturer has made an application to the executive officer for designation as an interchangeable product, while that application is being considered.

Extended definition of "manufacturer"

(2)  For the purposes of this section and in section 12.2, unless the context requires otherwise,

"manufacturer" includes a supplier, distributor, broker or agent of a manufacturer, except in,

(a) clause (1) (b) of this section,

(b) paragraph 2 of subsection (8) of this section,

(c) subsection (10) of this section, and

(d) clauses (b) and (c) of the definition of "drug benefit price" in subsection (14) of this section.

May not accept rebate

(3)  No wholesaler, operator, company, director, officer, employee or agent mentioned in subsection (1) shall accept a rebate that is mentioned in subsection (1), either directly or indirectly.

Executive officer may make order

(4)  If the executive officer believes, on reasonable grounds, that a manufacturer is not complying with subsection (1), the executive officer may make an order requiring the manufacturer to pay to the Minister of Finance the amount calculated under subsection (5).

Calculation

(5)  For the purposes of this section, the following rules apply to calculating the amount that is to be paid under subsection (4):

1. The amount shall be calculated by determining the difference between the expected value of all units of the drug products purchased and the actual cost of acquiring those units by the wholesaler, operator of a pharmacy, or company that owns, operates or franchises pharmacies.

2. The expected value mentioned in paragraph 1 shall be determined by multiplying the drug benefit price by the volume of units provided by the manufacturer or wholesaler for all the products.

3. The actual cost of acquiring those products mentioned in paragraph 1 shall be determined by subtracting the monetary value of the rebate from the amount paid for all the products by the wholesaler, operator of a pharmacy, or company that owns, operates or franchises pharmacies.

Reconsideration

(6)  Within 14 days of being served with the order, the manufacturer may submit evidence to the executive officer as to its compliance with subsection (1), or that the amount calculated under subsection (5) is not correct, and the executive officer shall reconsider the order based on that evidence.

Actions of executive officer after reconsideration

(7)  After reconsidering the order, the executive officer may do one of the following, and shall promptly serve the manufacturer with notice of his or her decision:

1. Affirm the order.

2. Rescind the order.

3. Vary the order.

Executive officer may act

(8)  Where a manufacturer has not complied with an order under subsection (4) within 14 days of being served with it, or has submitted evidence within 14 days under subsection (6) and the order has been affirmed or varied under subsection (7) and the manufacturer has not complied with the affirmed or varied order within 14 days of being served with it, the executive officer may either issue a further order under subsection (4) requiring the manufacturer to pay a revised amount calculated under subsection (5), or do either or both of the following:

1. If the drug that is the subject of the order is an interchangeable product, remove its designation.

2. Not make further designations of any of the manufacturer's products as interchangeable under this Act, or as listed drug products under section 1.3 of the Ontario Drug Benefit Act, nor consider any of its products for approval under section 16 of that Act, until such time as the executive officer is of the opinion that the manufacturer is no longer offering the rebate.

Limit on reconsideration

(9)  Subsections (6) and (7) do not apply to a further order mentioned in subsection (8).

Required notice

(10)  Where the executive officer proposes to act under paragraph 2 of subsection (8), the executive officer shall serve the manufacturer with at least 30 days notice.

Executive officer order where rebate accepted

(11)  Where the executive officer believes, on reasonable grounds, that a person has accepted a rebate contrary to subsection (3), the executive officer may make an order requiring the person to pay to the Minister of Finance the amount calculated under subsection (5).

Reconsideration

(12)  Subsections (6) and (7), subsection (8), other than paragraphs 1 and 2, and subsection (9) apply with any necessary modifications where an order has been made under subsection (11).

Lesser amount

(13)  Despite any other provision of this section, the executive officer may, in an order under subsection (4) or (11), require the manufacturer or other person to pay an amount less than the amount calculated under subsection (5) and, where the executive officer does so, the following apply:

1. The executive officer shall set out in the order both the lesser amount and how it was calculated.

2. Any right of reconsideration that applies with respect to a calculation under subsection (5) applies with respect to the calculation under paragraph 1.

Definitions

(14)  In this section,

"drug benefit price" means, with respect to a product,

(a) its drug benefit price under the Ontario Drug Benefit Act,

(b) in the case of a product that is not a benefit under the Ontario Drug Benefit Act, a price submitted by the manufacturer under the regulations that has been posted by the executive officer in the Formulary, or

(c) in the case of a product mentioned in clause (1) (b), the price submitted by the manufacturer; ("prix au titre du régime de médicaments")

"rebate", subject to the regulations, includes, without being limited to, currency, a discount, refund, trip, free goods or any other prescribed benefit, but does not include,

(a) a discount for prompt payment offered in the ordinary course of business, or

(b) a professional allowance. ("rabais")

Regulations

(15)  The Lieutenant Governor in Council may make regulations clarifying the definition of "rebate" in this section, including providing that certain benefits are not rebates, prescribing benefits for the purpose of that definition, clarifying how the calculations are to be made in this section and defining "professional allowance" for the purposes of that definition, including governing how professional allowances are to be calculated, setting limits on professional allowances and incorporating the content of the Code of Conduct referred to in subsection 11.5 (15) of the Ontario Drug Benefit Act as amended from time to time.

Rules re s. 12.1

12.2  (1)  The following rules apply with regard to an order made or a notice given by the executive officer under section 12.1:

1. The order or notice must be in writing, and set out in brief the reason for which it is made.

2. An order must set out how any amount required to be paid under the order was calculated, specify any right of reconsideration that is available, and the time within which reconsideration is available.

3. In the case of an order or notice under section 12.1 that applies to a manufacturer, the order or notice may be served by leaving a copy of the document with an officer, director or agent of the manufacturer, or with an individual at any place of business of the manufacturer who appears to be in control or management of the place of business.

4. In the case of an order or notice under section 12.1 that applies to a person mentioned in subsection 12.1 (3), the order or notice may be served by leaving a copy of the document with the person if the person is an individual, or with an officer, director or agent of the person, or with an individual at any place of business of the person mentioned in subsection 12.1 (3) who appears to be in control or management of the place of business.

5. An order must specify the time period with respect to which the order is made, which may include a time period with respect to which a previous order was made, if the previous order has not been complied with.

6. An order must set out the time period in which the manufacturer or person mentioned in subsection 12.1 (3) is required to comply with the order.

7. An order must specify the consequences for failing to comply with the order.

Same, publication of enforcement action

(2)  The executive officer may publish on the Ministry's website the corporate names of manufacturers or any other persons against whom the executive officer has taken action under section 12.1 and may also publish any information he or she considers appropriate about the action that has been taken.

No appeal

(3)  There is no appeal from a decision or action of the executive officer under section 12.1, except as provided for in that section.

4.  (1)  Subsection 14 (1) of the Act is amended by adding the following clause:

(d) defining any word or expression used in this Act but not defined in this Act.

(2)  Clause 14 (2) (a) of the Act is repealed and the following substituted:

(a) it does not contain a drug or drugs in the same amounts of the same or similar active ingredients in the same or similar dosage form as the other product, where "similar active ingredients" means different salts, esters, complexes, or solvates of the same therapeutic moiety; or

(3)  Subsections 14 (2), (3), (4) and (5) of the Act are repealed.

(4)  Section 14 of the Act is amended by adding the following subsection:

Retroactive

(9)  A regulation is, if it so provides, effective with reference to a period before it is filed.

(5)  Section 14 of the Act is amended by adding the following subsections:

Public consultation before making regulations

(10)  The Lieutenant Governor in Council shall not make any regulation under subsection 12.1 (15) or clauses 14 (1) (a), (b) or (d) unless,

(a) the Minister has published a notice of the proposed regulation on the website of the Ministry and in any other format the Minister considers advisable;

(b) the notice complies with the requirements of this section;

(c) the time periods specified in the notice, during which members of the public may exercise a right described in clause (11) (b) or (c), have expired; and

(d) the Minister has considered whatever comments and submissions that members of the public have made on the proposed regulation in accordance with clause (11) (b) or (c) and has reported to the Lieutenant Governor in Council on what, if any, changes to the proposed regulation the Minister considers appropriate.

Contents of notice

(11)  The notice mentioned in clause (10) (a) shall contain,

(a) a description of the proposed regulation and the text of it;

(b) a statement of the time period during which members of the public may submit written comments on the proposed regulation to the Minister and the manner in which and the address to which the comments must be submitted;

(c) a description of whatever other rights, in addition to the right described in clause (b), that members of the public have to make submissions on the proposed regulation and the manner in which and the time period during which those rights must be exercised;

(d) a statement of where and when members of the public may review written information about the proposed regulation; and

(e) all other information that the Minister considers appropriate.

Time period for comments

(12)  The time period mentioned in clauses (11) (b) and (c) shall be at least 30 days after the Minister gives the notice mentioned in clause (10) (a) unless the Minister shortens the time period in accordance with subsection (13).

Shorter time period for comments

(13)  The Minister may shorten the time period if, in the Minister's opinion,

(a) the urgency of the situation requires it;

(b) the proposed regulation clarifies the intent or operation of this Act or the regulations; or

(c) the proposed regulation is of a minor or technical nature.

Discretion to make regulations

(14)  Upon receiving the Minister's report mentioned in clause (10) (d), the Lieutenant Governor in Council, without further notice under subsection (10), may make the proposed regulation with the changes that the Lieutenant Governor in Council considers appropriate, whether or not those changes are mentioned in the Minister's report.

No review

(15)  Subject to subsection (16), a court shall not review any action, decision, failure to take action or failure to make a decision by the Lieutenant Governor in Council or the Minister under subsections (10) to (14).

Exception

(16)  Any person resident in Ontario may make an application for judicial review under the Judicial Review Procedure Act on the grounds that the Minister has not taken a step required by subsections (10) to (14).

Time for application

(17)  No person shall make an application under subsection (16) with respect to a regulation later than 21 days after the day on which the Minister publishes a notice with respect to the regulation under clause (10) (a).

PART II
AMENDMENTS TO THE

Ontario Drug Benefit Act

5.  The Ontario Drug Benefit Act is amended by adding the following section:

Principles

0.1  In this Act, the following principles are recognized:

1. The public drug system aims to meet the needs of Ontarians, as patients, consumers and taxpayers.

2. The public drug system aims to involve consumers and patients in a meaningful way.

3. The public drug system aims to operate transparently to the extent possible for all persons with an interest in the system, including, without being limited to, patients, health care practitioners, consumers, manufacturers, wholesalers and pharmacies.

4. The public drug system aims to consistently achieve value-for-money and ensure the best use of resources at every level of the system.

5. Funding decisions for drugs are to be made on the best clinical and economic evidence available, and will be openly communicated in as timely a manner as possible.

6.  (1)  The definition of "designated" in section 1 of the Act is repealed and the following substituted:

"designated" means designated in the Formulary by the executive officer; ("désigné")

(2)  Section 1 of the Act is amended by adding the following definitions:

"executive officer" means the executive officer of the Ontario public drug programs appointed under section 1.1; ("administrateur")

"Formulary" means the Formulary that the executive officer is required to keep, maintain and publish under section 1.2; ("Formulaire des médicaments")

(3)  The definition of "Minister" in section 1 of the Act is repealed and the following substituted:

"Minister" means the Minister of Health and Long-Term Care or any other member of the Executive Council to whom the administration of this Act is assigned under the Executive Council Act; ("ministre")

(4)  Section 1 of the Act is amended by adding the following definition:

"prescribed" means prescribed in the regulations; ("prescrit")

(5)  Section 1 of the Act is amended by adding the following subsection:

No therapeutic substitution

(2)  Nothing in this Act shall be construed to permit therapeutic substitution.

7.  The Act is amended by adding the following sections:

Executive officer

1.1  (1)  The Lieutenant Governor in Council shall appoint an executive officer for the Ontario public drug programs.

Functions and powers

(2)  Subject to this Act and the regulations, it is the function of the executive officer, and he or she has the power, to perform any functions or duties that he or she may have under this Act and the regulations, under the Drug Interchangeability and Dispensing Fee Act and its regulations and under any other Act or regulation, and without in any way restricting the generality of the foregoing,

(a) to administer the Ontario public drug programs;

(b) to keep, maintain and publish the Formulary;

(c) to make this Act apply in respect of the supplying of drugs that are not listed drug products as provided for in section 16;

(d) to designate products as listed drug products, listed substances and designated pharmaceutical products for the purposes of this Act, and to remove or modify those designations;

(e) to designate products as interchangeable with other products under the Drug Interchangeability and Dispensing Fee Act, and to remove or modify those designations;

(f) to negotiate agreements with manufacturers of drug products, agree with manufacturers as to the drug benefit price of listed drug products, negotiate drug benefit prices for listed substances with suppliers, and set drug benefit prices for designated pharmaceutical products;

(g) to require any information that may or must be provided to the executive officer under this Act or the regulations or any other Act or regulation to be in a format that is satisfactory to the executive officer;

(h) to make payments under the Ontario public drug programs;

(i) to establish clinical criteria under section 23; and

(j) to pay operators of pharmacies for professional services, and to determine the amount of such payments subject to the prescribed conditions, if any.

Report

(3)  In every year,

(a) the executive officer shall make a report in writing to the Minister concerning the Ontario drug programs; and

(b) the Minister shall publish the report within 30 days of receiving it.

Transitional

(4)  An agreement concerning the Ontario drug programs to which the Minister was a party and that was in effect immediately before October 1, 2006 continues in force, with the executive officer substituted for the Minister, until it is terminated under its terms.

Review process

(5)  The Minister shall establish a process to review,

(a) recommendations made to the executive officer in respect of his or her functions under clause (2) (d) concerning the designation of products as listed drug products; and

(b) decisions made by the executive officer not to designate a product as a listed drug product under clause (2) (d) where a recommendation to designate has been made by a body that advises the executive officer.

Publication

(6)  The Minister shall publish the details of the process established under subsection (5) on the website of the Ministry and in any other format the Minister considers advisable.

Non-application of SPPA

(7)  The Statutory Powers Procedure Act does not apply to a review carried out under the process established by the Minister under subsection (5).

Non-application of SPPA

(8)  The Statutory Powers Procedure Act does not apply to any decision or action of the executive officer under this Act.

Regulations

(9)  The Lieutenant Governor in Council may make regulations,

(a) clarifying, modifying or restricting the functions and powers of the executive officer;

(b) providing for additional functions and powers of the executive officer.

Formulary

1.2  (1)  The executive officer shall keep, maintain and publish a Formulary.

Contents

(2)  The Formulary shall set out,

(a) the listed drug products and listed substances for the purposes of this Act;

(b) the drug benefit price for listed drug products, listed substances and designated pharmaceutical products;

(c) the products that are designated as interchangeable for the purposes of the Drug Interchangeability and Dispensing Fee Act; and

(d) any other information required under this or any other Act.

Other information

(3)  In addition to anything mentioned in subsection (2), the Formulary may set out any other information or material the executive officer considers necessary or advisable.

Publication

(4)  The executive officer shall publish the Formulary on the website of the Ministry and may publish it in any other format the executive officer considers advisable.

Where conflict

(5)  In the event of a conflict between what is posted on the Ministry's website under subsection (4) and what is posted in another format, the Ministry's website prevails.

Listing

1.3  (1)  A drug product becomes a listed drug product on the effective date of its being designated in the Formulary as a listed drug product, and ceases to be a listed drug product on the effective date of that designation being removed.

Requirements for listing

(2)  The executive officer may designate a drug product in the Formulary as a listed drug product where the executive officer considers it to be in the public interest to do so, but shall not do so if the prescribed conditions under clause 18 (1) (b) have not been met.

Modification

(3)  Any modification of a designation takes place on the effective date of its being designated in the Formulary as a modification.

Transitional

(4)  A drug product that was a listed drug product immediately before October 1, 2006 continues to be a listed drug product until it is removed from the Formulary as a listed drug product under this section.

Pharmacy Council

1.4  (1)  The Minister shall establish a Pharmacy Council that will ensure the involvement of pharmacists in the development of pharmaceutical and health policy and whose duties shall include, without being limited to, the provision of expert advice to the executive officer and the Minister, assisting in the definition and implementation of pharmacists' professional services, and identifying the necessary infrastructure and supports for the implementation of professional services.

Chaired

(2)  The Pharmacy Council shall be co-chaired by representatives of the Ministry and the Association, who shall agree to the terms of reference and composition of the Council.

8.  The Act is amended by adding the following section:

Citizens' Council

1.5  The Minister shall establish a Citizens' Council whose duty shall be to ensure the involvement of patients in the development of pharmaceutical and health policy.

9.  Subsection 2 (1) of the Act is amended by striking out "designated" and substituting "prescribed".

10.  (1)  Subsection 4 (1) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(2)  Subsection 4 (2) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(3)  Subsection 4 (3) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(4)  Subsection 4 (4) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(5)  Paragraph 4 of subsection 4 (5) of the Act is repealed and the following substituted:

4. Subject to the prescribed conditions, if any, if the acquisition cost, for the operator of the pharmacy, of the drug product dispensed is greater than the sum of the drug benefit price for that product and the mark-up referred to in paragraph 3 of subsection 6 (1), determine the amount by which they differ.

11.  (1)  Subsections 5 (1) and (2) of the Act are repealed and the following substituted:

Payment of claim of operator

(1)  Subject to subsection (2), an operator of a pharmacy who submits to the executive officer a claim for payment in respect of supplying a listed drug product for an eligible person pursuant to a prescription is entitled to be paid by the executive officer the amount provided for under section 6.

Alternative payments

(2)  The executive officer may pay the operator of a pharmacy an amount different from the amount provided for under section 6 in respect of a claim or claims under subsection (1) for prescribed classes of eligible persons, subject to any prescribed requirements.

Transitional

(2.1)  Any agreement that was in place under subsection (2), as it existed before October 1, 2006, that was in effect immediately before that date continues in force, with the executive officer substituted for the Minister, until it is terminated under its terms.

(2)  Subsection 5 (3) of the Act is amended by striking out "the Minister" wherever it appears and substituting in each case "the executive officer".

12.  (1)  Subsection 6 (1) of the Act is repealed and the following substituted:

Amount executive officer to pay

(1)  The amount the executive officer shall pay under subsection 5 (1) in respect of a listed drug product is the amount calculated by adding the amounts determined under paragraphs 1, 2 and 3 and subtracting from that total the maximum co-payment that may be charged in respect of the supplying of a listed drug product for an eligible person, as provided for in the regulations:

1. The dispensing fee determined under subsection (2).

2. The drug benefit price for the drug product, but, if there are other listed drug products that are interchangeable with the drug product, the drug benefit price shall be deemed to be the lowest of the drug benefit prices for the drug product and the listed drug products that are interchangeable with it.

3. The prescribed mark-up on that price.

(2)  Subsection 6 (2) of the Act is amended by striking out "the Minister" in the portion before clause (a) and substituting "the executive officer".

(3)  Clause 6 (2) (a) of the Act is repealed.

(4)  Subsection 6 (3) of the Act is repealed and the following substituted:

Same, high acquisition cost

(3)  Subject to the prescribed conditions, if any, if the acquisition cost of a listed drug product for an operator of a pharmacy is greater than the sum of the drug benefit price for the drug product determined under paragraph 2 of subsection (1) and the mark-up on that price, referred to in paragraph 3 of subsection (1), the executive officer shall also pay, under subsection 5 (1), the difference between the acquisition cost for the drug product and that sum.

(5)  Subsection 6 (5) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

13.  Section 8 of the Act is repealed.

14.  (1)  Subsection 9 (1) of the Act is amended by striking out "The Minister" at the beginning and substituting "The executive officer".

(2)  Subsection 9 (2) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

15.  (1)  Subsection 11 (1) of the Act is amended by striking out "the Minister" wherever it appears and substituting in each case "the executive officer".

(2)  Subsection 11 (2) of the Act is amended by striking out "the Minister" wherever it appears and substituting in each case "the executive officer".

16.  (1)  Subsection 11.1 (1) of the Act is amended by striking out "the Minister" wherever it appears and substituting in each case "the executive officer".

(2)  Subsection 11.1 (2) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(3)  Subsection 11.1 (3) of the Act is amended by striking out "the Minister" and substituting "the executive officer",

(a) in the portion before clause (a); and

(b) in clause (a).

(4)  Subsection 11.1 (6) of the Act is amended by striking out "The Minister" at the beginning and substituting "The executive officer".

(5)  Subsection 11.1 (7) of the Act is amended by striking out "The Minister" at the beginning and substituting "The executive officer".

17.  (1)  Subsection 11.2 (1) of the Act is amended by striking out "the Minister" wherever it appears and substituting in each case "the executive officer".

(2)  Subsection 11.2 (2) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(3)  Subsection 11.2 (3) of the Act is amended by striking out "the Minister" and substituting "the executive officer",

(a) in the portion before clause (a); and

(b) in clause (a).

(4)  Subsection 11.2 (5) of the Act is amended by striking out "The Minister" at the beginning and substituting "The executive officer".

(5)  Subsection 11.2 (6) of the Act is amended by striking out "The Minister" at the beginning and substituting "The executive officer".

18.  Subsection 11.3 (1) of the Act is amended by striking out "the Minister" wherever it appears and substituting in each case "the executive officer".

19.  The Act is amended by adding the following sections:

Supply to be at drug benefit price

11.4  (1)  A manufacturer shall not sell a listed drug product, for the purpose of supplying a drug product under this Act, for a price that is higher than its drug benefit price as listed in the Formulary.

Agreement not to exceed drug benefit price

(2)  A manufacturer, in agreeing to a drug benefit price with the executive officer under section 22, shall agree to comply with subsection (1).

Executive officer may make order

(3)  If the executive officer believes, on reasonable grounds, that a manufacturer is not complying with subsection (1), the executive officer may make an order requiring the manufacturer to pay to the Minister of Finance the amount calculated under subsection (4).

How amount calculated

(4)  The amount that the manufacturer is required to pay under subsection (3) is the amount determined by the formula:

A = Q (P - DBP)

where,

"A" is the amount to be paid by the manufacturer,

"P" is the price for which the manufacturer is selling the listed drug product,

"DBP" is the drug benefit price, and

"Q" is the number of units of the listed drug product sold at the higher price.

Reconsideration

(5)  Within 14 days of being served with an order under subsection (3), the manufacturer may submit evidence to the executive officer as to its compliance with subsection (1), or that the amount calculated under subsection (4) is not correct, and the executive officer shall reconsider the order based on that evidence.

Actions of executive officer after reconsideration

(6)  After reconsidering the order, the executive officer may do one of the following, and shall promptly serve the manufacturer with notice of his or her decision.

1. Affirm the order.

2. Rescind the order.

3. Vary the order.

Executive officer may act

(7)  Where a manufacturer has not complied with an order under subsection (3) within 14 days of being served with it, or has submitted evidence within 14 days under subsection (5) and the order has been affirmed or varied under subsection (6) and the manufacturer has not complied with the affirmed or varied order within 14 days of being served with it, the executive officer may either issue a further order under subsection (3) requiring the manufacturer to pay a revised amount calculated under subsection (4), or do either or both of the following:

1. Remove the designation of the drug that is the subject of the order as a listed drug product.

2. Not make further designations of any of the manufacturer's drug products as listed drug products under section 1.3, nor consider any of its drug products for approval under section 16, nor designate any of its products as interchangeable under the Drug Interchangeability and Dispensing Fee Act until such time as the executive officer is of the opinion that the manufacturer is selling the drug product for the drug benefit price.

Limit on reconsideration

(8)  Subsections (5) and (6) do not apply to a further order mentioned in subsection (7).

Required notice

(9)  Where the executive officer proposes to act under paragraph 2 of subsection (7), the executive officer shall serve the manufacturer with at least 30 days notice.

Rebates, etc.

11.5  (1)  A manufacturer shall not provide a rebate to wholesalers, operators of pharmacies, or companies that own, operate or franchise pharmacies, or to their directors, officers, employees or agents,

(a) for any listed drug product or listed substance; or

(b) for any drug in respect of which the manufacturer has made an application to the executive officer for designation as a listed drug product, while that application is being considered.

Extended definition of "manufacturer"

(2)  For the purposes of this section and in section 11.6, unless the context requires otherwise, and in section 13.1 and subsection 14 (3),

"manufacturer" includes a supplier, distributor, broker or agent of a manufacturer, except in,

(a) clause (1) (b) of this section,

(b) subsection (6) of this section,

(c) paragraph 2 of subsection (9) of this section, and

(d) subsection (11) of this section.

May not accept rebate

(3)  No wholesaler, operator, company, director, officer, employee or agent mentioned in subsection (1) shall accept a rebate that is mentioned in subsection (1), either directly or indirectly.

Executive officer may make order

(4)  If the executive officer believes, on reasonable grounds, that a manufacturer is not complying with subsection (1), the executive officer may make an order requiring the manufacturer to pay to the Minister of Finance the amount calculated under subsection (5).

Calculation

(5)  For the purposes of this section, the following rules apply to calculating the amount that is to be paid under subsection (4):

1. The amount shall be calculated by determining the difference between the expected value of all units of drug products and listed substances purchased and the actual cost of acquiring those units by the wholesaler, operator of a pharmacy, or company that owns, operates or franchises pharmacies.

2. The expected value mentioned in paragraph 1 shall be determined by multiplying the drug benefit price by the volume of units provided by the manufacturer or wholesaler for all the listed drug products and listed substances.

3. The actual cost of acquiring those products and substances mentioned in paragraph 1 shall be determined by subtracting the monetary value of the rebate from the amount paid for the drug products and listed substances by the wholesaler, operator of a pharmacy, or company that owns, operates or franchises pharmacies.

Deemed drug benefit price

(6)  For the purposes of subsection (5), the drug benefit price of a drug in respect of which clause (1) (b) applies shall be deemed to be the price submitted by the manufacturer.

Reconsideration

(7)  Within 14 days of being served with the order, the manufacturer may submit evidence to the executive officer as to its compliance with subsection (1), or that the amount calculated under subsection (5) is not correct, and the executive officer shall reconsider the order based on that evidence.

Actions of executive officer after reconsideration

(8)  After reconsidering the order, the executive officer may do one of the following, and shall promptly serve the manufacturer with notice of his or her decision.

1. Affirm the order.

2. Rescind the order.

3. Vary the order.

Executive officer may act

(9)  Where a manufacturer has not complied with an order under subsection (4) within 14 days of being served with it, or has submitted evidence within 14 days under subsection (7) and the order has been affirmed or varied under subsection (8) and the manufacturer has not complied with the affirmed or varied order within 14 days of being served with it, the executive officer may either issue a further order under subsection (4) or do either or both of the following:

1. If the drug that is the subject of the order is a listed drug product, remove its designation.

2. Not make further designations of any of the manufacturer's drug products as listed drug products under section 1.3, nor consider any of its drug products for approval under section 16, nor designate any of its products as interchangeable under the Drug Interchangeability and Dispensing Fee Act until such time as the executive officer is of the opinion that the manufacturer is no longer offering the rebate.

Limit on reconsideration

(10)  Subsections (7) and (8) do not apply to a further order mentioned in subsection (9).

Required notice

(11)  Where the executive officer proposes to act under paragraph 2 of subsection (9), the executive officer shall serve the manufacturer with at least 30 days notice.

Executive officer order where rebate accepted

(12)  Where the executive officer believes, on reasonable grounds, that a person has accepted a rebate contrary to subsection (3), the executive officer may make an order requiring the person to pay to the Minister of Finance the amount calculated under subsection (5).

Reconsideration

(13)  Subsections (7) and (8), subsection (9), other than paragraphs 1 and 2, and subsection (10) apply with any necessary modifications where an order has been made under subsection (12).

Lesser amount

(14)  Despite any other provision of this section, the executive officer may, in an order under subsection (4) or (12), require the manufacturer or other person to pay an amount less than the amount calculated under subsection (5) and, where the executive officer does so, the following apply:

1. The executive officer shall set out in the order both the lesser amount and how it was calculated.

2. Any right of reconsideration that applies with respect to a calculation under subsection (5) applies with respect to the calculation under paragraph 1.

Code of conduct

(15)  The executive officer shall establish a Code of Conduct respecting professional allowances under this Act and the Drug Interchangeability and Dispensing Fee Act in consultation with the pharmacy and drug manufacturing industries, and shall update the Code of Conduct from time to time in consultation with those industries.

Publication

(16)  The executive officer shall publish the Code of Conduct on the website of the Ministry and may publish it in any other format that the executive officer considers advisable.

Where conflict

(17)  In the event of conflict between what is published on the Ministry's website under subsection (15) and what is published in another format, the Ministry's website prevails.

Definition

(18)  In this section,

"rebate", subject to the regulations, includes, without being limited to, currency, a discount, refund, trip, free goods or any other prescribed benefit, but does not include,

(a) a discount for prompt payment offered in the ordinary course of business, or

(b) a professional allowance.

Rules re ss. 11.4 and 11.5

11.6  (1)  The following rules apply with regard to an order made or a notice given by the executive officer under section 11.4 or 11.5:

1. The order or notice must be in writing, and set out in brief the reason for which it is made.

2. An order must set out how any amount required to be paid under the order was calculated, and specify any right of reconsideration that is available and the time within which the reconsideration is available.

3. In the case of an order or notice under section 11.4 or an order or notice under section 11.5 that applies to a manufacturer, the order or notice may be served by leaving a copy of the document with an officer, director or agent of the manufacturer, or with an individual at any place of business of the manufacturer who appears to be in control or management of the place of business.

4. In the case of an order or notice under section 11.5 that applies to a person mentioned in subsection 11.5 (3), the order or notice may be served by leaving a copy of the document with the person if the person is an individual, or with an officer, director or agent of the person, or with an individual at any place of business of the person mentioned in subsection 11.5 (3) who appears to be in control or management of the place of business.

5. An order must specify the time period with respect to which the order is made, which may include a time period with respect to which a previous order was made, if the previous order has not been complied with.

6. An order must set out the time period in which the manufacturer or person mentioned in subsection 11.5 (3) is required to comply with the order.

7. An order must specify the consequences for failing to comply with the order.

Same, publication of enforcement action

(2)  The executive officer may publish on the Ministry's website the corporate names of manufacturers or any other persons against whom the executive officer has taken action under section 11.4 or 11.5 and may also publish any information he or she considers appropriate about the action that has been taken.

No appeal

(3)  There is no appeal from a decision or action of the executive officer under section 11.4 or 11.5, except as provided for in those sections.

20.  Section 12 of the Act is repealed and the following substituted:

Minister and executive officer to consult

12.  The Minister and the executive officer may consult with persons or organizations representing eligible persons, manufacturers, operators of pharmacies, physicians, suppliers of listed substances, wholesalers and companies that own, operate or franchise pharmacies with respect to the amounts payable under this Act and other matters of mutual concern arising out of this Act and the regulations, and the Drug Interchangeability and Dispensing Fee Act and its regulations.

21.  (1)  Subsection 13 (1) of the Act is amended by adding "and the executive officer" after "The Minister" at the beginning.

(2)  Subsection 13 (2) of the Act is amended by adding "and the executive officer" after "The Minister" at the beginning.

(3)  Subsection 13 (3) of the Act is repealed and the following substituted:

Disclosure

(3)  The Minister and the executive officer shall disclose personal information if all prescribed conditions have been met and the disclosure is necessary for purposes related to the administration of this Act or for such other purposes as may be prescribed, but shall not disclose the information if, in his or her opinion, the disclosure is not necessary for those purposes.

(4)  Subsection 13 (4) of the Act is amended by adding "and the executive officer" after "the Minister".

22.  The Act is amended by adding the following section:

Requirement to provide information

13.1  (1)  For the purposes of determining compliance with this Act or the regulations or with the Drug Interchangeability and Dispensing Fee Act and its regulations, the executive officer may require a manufacturer, wholesaler, supplier of a listed substance, operator of a pharmacy or a company that owns, operates or franchises pharmacies to provide information other than personal information to the executive officer, either in response to a specific request, or at regular intervals.

Time and form

(2)  The executive officer may specify the time at which and the form in which the information must be provided.

Publication

(3)  Where the executive officer requires that information be provided at regular intervals, the executive officer shall publish the manner and form that are required on the website of the Ministry, and may publish them in any other format that he or she considers advisable.

Compliance required

(4)  The manufacturer, wholesaler, supplier of listed substances, operator of a pharmacy or company that owns, operates or franchises pharmacies shall comply with every requirement to provide information under this section.

Where conflict

(5)  In the event of a conflict between what is posted on the Ministry's website under subsection (3) and what is posted in another format, the Ministry's website prevails.

23.  Subsections 14 (3), (4) and (5) of the Act are repealed and the following substituted:

Same

(3)  An inspector may examine records, in whatever form, in the possession or under the control of a wholesaler, manufacturer, supplier of a listed substance, operator of a pharmacy or a company that owns, operates or franchises pharmacies, if the inspector believes on reasonable grounds that the records will assist the inspector in determining the accuracy and completeness of a claim for payment of an operator of a pharmacy or physician or in determining whether the wholesaler or manufacturer has complied with this Act and the regulations.

Copies

(4)  In carrying out an inspection under this section, the inspector may, upon giving a receipt for it, take away a record, including a sales or a marketing record, for the purpose of making a copy, but the copy shall be made and the record shall be returned as promptly as reasonably possible.

24.  (1)  Clause 15 (1) (b) of the Act is repealed and the following substituted:

(b) submits to the executive officer a claim for payment where the executive officer is not required to make any payment or where the claim is in excess of the amount the executive officer is required to pay;

(2)  Clause 15 (1) (e) of the Act is amended by adding "or the Drug Interchangeability and Dispensing Fee Act" after "administration of this Act".

(3)  Subsection 15 (5) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(4)  Subsection 15 (6) of the Act is repealed and the following substituted:

Same

(6)  The minimum penalty for each offence under clause (1) (b) is two times the difference between the amount for which a claim was submitted to the executive officer and the amount the executive officer is required to pay.

25.  Section 16 of the Act is repealed and the following substituted:

Unlisted drugs, special case

16.  (1)  If a physician informs the executive officer that the proper treatment of a patient who is an eligible person requires the administration of a drug for which there is not a listed drug product, the executive officer may make this Act apply in respect of the supplying of that drug as if it were a listed drug product by so notifying the physician.

Same

(2)  The drug benefit price of a drug referred to in subsection (1) shall be the amount determined by the executive officer in accordance with the regulations.

Listed drugs, special case

(3)  If a physician informs the executive officer that the proper treatment of a patient who is an eligible person requires the administration of a drug for which there are one or more listed drug products but for which the conditions for payment under section 23 are not satisfied, the executive officer may make this Act apply in respect of the supplying of those listed drug products as if the conditions were satisfied.

Notice to operator

(4)  An operator of a pharmacy is not liable for contravening this Act or the regulations in respect of supplying a drug referred to in subsection (1) or a listed drug product referred to in subsection (3) unless the operator has received notice from the physician or from the executive officer that this Act applies to that supplying.

Retroactivity

(5)  Where the executive officer may make this Act apply in respect of the supplying of a drug or a listed drug product under this section, the executive officer may make that application retroactive to a date determined by the executive officer.

26.  Subsections 17 (2) and (3) of the Act are repealed and the following substituted:

Determination of drug benefit price

(2)  The executive officer has the authority to,

(a) determine the conditions which must be met before a pharmaceutical product, including an extemporaneous preparation, is designated as a designated pharmaceutical product; and

(b) determine the drug benefit price of a designated pharmaceutical product, including determining a formula by which the drug benefit price may be calculated.

Section 22 does not apply

(3)  Section 22 does not apply for the purposes of this section.

Publication

(4)  The executive officer shall publish, on the Ministry's website and in any other format the executive officer considers appropriate, any conditions or formulas that the executive officer determines under subsection (2).

Where conflict

(5)  In the event of a conflict between what is posted on the Ministry's website under subsection (4) and what is posted in another format, the Ministry's website prevails.

27.  (1)  Subsection 18 (1) of the Act is amended by adding the following clauses:

(0.a) defining any word or expression used in this Act but not defined in this Act;

(0.a.1) governing professional services for the purposes of clause 1.1 (2) (j), including defining "professional services", governing payments that may be made for professional services, including governing to whom payments may be made, and prescribing conditions to which the executive officer is subject in making payments for professional services;

(2)  Clause 18 (1) (a) of the Act is amended by striking out "designating" and substituting "prescribing".

(3)  Clauses 18 (1) (c) and (d) of the Act are repealed.

(4)  Clause 18 (1) (e.1) of the Act is repealed and the following substituted:

(e.1) prescribing the manner of determining acquisition costs of drug products, for the purposes of subsections 4 (5), 6 (3) and (4), and prescribing conditions for the purposes of paragraph 4 of subsection 4 (5) and for the purposes of subsection 6 (3);

(5)  Subsection 18 (1) of the Act is amended by adding the following clause:

(e.1.2) prescribing classes of eligible persons and setting out requirements for the purposes of subsection 5 (2);

(6)  Clause 18 (1) (e.2) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(7)  Clause 18 (1) (e.3) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(8)  Clause 18 (1) (g) of the Act is repealed.

(9)  Clause 18 (1) (g.1) of the Act is repealed and the following substituted:

(g.1) prescribing the mark-up of the drug benefit price the executive officer will pay under subsection 6 (1);

(10)  Clause 18 (1) (g.3) of the Act is repealed.

(11)  Clause 18 (1) (g.4) of the Act is repealed and the following substituted:

(g.4) prescribing the dispensing fee and conditions for the payment of the dispensing fee for the purposes of subclause 6 (2) (c) (i);

(12)  Clause 18 (1) (g.6) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(13)  Clause 18 (1) (h) of the Act is repealed.

(14)  Clause 18 (1) (k) of the Act is repealed.

(15)  Clause 18 (1) (k.1) of the Act is repealed and the following substituted:

(k.1) respecting how drug benefit prices are to be calculated for the purposes of section 16;

(16)  Clause 18 (1) (k.2) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(17)  Clause 18 (1) (k.3) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(18)  Subsection 18 (1) of the Act is amended by adding the following clause:

(k.5.1) clarifying the definition of "rebate" in section 11.5, including providing that certain benefits are not rebates, prescribing benefits for the purpose of that definition, clarifying how the calculations are to be made in that section and defining "professional allowance" for the purposes of that definition, including governing how professional allowances are to be calculated, setting limits on professional allowances and incorporating the content of the Code of Conduct referred to in subsection 11.5 (15) as amended from time to time;

(19)  Clause 18 (1) (k.6) of the Act is repealed and the following substituted:

(k.6) prescribing conditions under which the Minister and the executive officer may collect or use personal information under subsection 13 (1) or (2), conditions under which the Minister and the executive officer shall disclose personal information under subsection 13 (3) and conditions under which the Minister and the executive officer may enter into agreements under subsection 13 (4);

(20)  Clause 18 (1) (l) of the Act is repealed.

(21)  Subsections 18 (1.1), (1.2) and (1.3) of the Act are repealed.

(22)  Clause 18 (5) (d) of the Act is amended by striking out "the Minister" and substituting "the executive officer".

(23)  Section 18 of the Act is amended by adding the following subsections:

Public consultation before making regulations

(8)  The Lieutenant Governor in Council shall not make any regulation under clauses (1) (0.a), (0.a.1), (b), (b.1), (e.1), (e.1.2), (g.1), (g.4), (k.1) or (k.5.1) unless,

(a) the Minister has published a notice of the proposed regulation on the website of the Ministry and in any other format the Minister considers advisable;

(b) the notice complies with the requirements of this section;

(c) the time periods specified in the notice, during which members of the public may exercise a right described in clause (9) (b) or (c), have expired; and

(d) the Minister has considered whatever comments and submissions that members of the public have made on the proposed regulation in accordance with clause (9) (b) or (c) and has reported to the Lieutenant Governor in Council on what, if any, changes to the proposed regulation the Minister considers appropriate.

Contents of notice

(9)  The notice mentioned in clause (8) (a) shall contain,

(a) a description of the proposed regulation and the text of it;

(b) a statement of the time period during which members of the public may submit written comments on the proposed regulation to the Minister and the manner in which and the address to which the comments must be submitted;

(c) a description of whatever other rights, in addition to the right described in clause (b), that members of the public have to make submissions on the proposed regulation and the manner in which and the time period during which those rights must be exercised;

(d) a statement of where and when members of the public may review written information about the proposed regulation; and

(e) all other information that the Minister considers appropriate.

Time period for comments

(10)  The time period mentioned in clauses (9) (b) and (c) shall be at least 30 days after the Minister gives the notice mentioned in clause (8) (a) unless the Minister shortens the time period in accordance with subsection (11).

Shorter time period for comments

(11)  The Minister may shorten the time period if, in the Minister's opinion,

(a) the urgency of the situation requires it;

(b) the proposed regulation clarifies the intent or operation of this Act or the regulations; or

(c) the proposed regulation is of a minor or technical nature.

Discretion to make regulations

(12)  Upon receiving the Minister's report mentioned in clause (8) (d), the Lieutenant Governor in Council, without further notice under subsection (8), may make the proposed regulation with the changes that the Lieutenant Governor in Council considers appropriate, whether or not those changes are mentioned in the Minister's report.

No review

(13)  Subject to subsection (14), a court shall not review any action, decision, failure to take action or failure to make a decision by the Lieutenant Governor in Council or the Minister under subsections (8) to (12).

Exception

(14)  Any person resident in Ontario may make an application for judicial review under the Judicial Review Procedure Act on the grounds that the Minister has not taken a step required by subsections (8) to (12).

Time for application

(15)  No person shall make an application under subsection (14) with respect to a regulation later than 21 days after the day on which the Minister publishes a notice with respect to the regulation under clause (8) (a).

28.  Sections 19, 20, 21, 22 and 23 of the Act are repealed and the following substituted:

Decisions about listing, delisting

19.  In deciding whether or not to designate a drug product as a listed drug product or to remove such a designation, the executive officer may consider anything he or she considers advisable in the public interest, including, without limiting the generality of the foregoing, the drug benefit price of the drug product or other drug products or the price charged to operators of pharmacies for the drug product or other drug products.

Delisting

20.  (1)  The executive officer may remove a drug product's designation as a listed drug product even if none of the conditions prescribed under clause 18 (1) (b.1) are breached, if he or she considers it advisable in the public interest to do so.

Effect of breach of continuing conditions

(2)  Despite a breach of a condition prescribed under clause 18 (1) (b.1), a drug product does not cease to be a listed drug product until its designation as a listed drug product is removed.

Advisors

21.  The Minister, the executive officer or any body or official who advises the Minister, the executive officer or the Lieutenant Governor in Council with respect to anything under this Act may, in formulating such advice, consider anything the Minister, the executive officer or Lieutenant Governor in Council may consider.

Drug benefit price

22.  (1)  The drug benefit price for a drug product when it becomes a listed drug product shall be the amount agreed to by the executive officer and the manufacturer, subject to any conditions that may be prescribed.

Executive officer's agreement

(2)  In deciding whether to agree to an amount under subsection (1), the executive officer may consider any matter the executive officer considers advisable in the public interest, including, without limiting the generality of the foregoing, the drug benefit price of other drug products or the price charged to operators of pharmacies for the drug product or other drug products.

Request for change

(3)  A manufacturer may request, in writing, that the executive officer change a drug benefit price, but the executive officer is not obligated to act on the request.

Criteria for requesting change

(4)  The executive officer may establish rules, criteria and procedures that must be followed by a manufacturer in submitting requests for changes in a drug benefit price, including providing for how often such requests may be made, and shall post those rules, criteria and procedures on the Ministry's website and in any other format the executive officer considers advisable.

Manufacturer must comply

(5)  A manufacturer that submits a request for a change in a drug benefit price shall comply with the posted rules, criteria and procedures.

Where conflict

(6)  In the event of a conflict between what is posted on the Ministry's website under subsection (4) and what is posted in another format, the Ministry's website prevails.

Changing drug benefit price

(7)  Subject to any conditions that may be prescribed, the executive officer may change the drug benefit price of a drug product in consultation with the manufacturer if a request has been made under subsection (3) and the executive officer considers it to be in the public interest to make the change, and such a change is effective on the date that it is indicated in the Formulary as taking effect.

Documentation

(8)  In determining whether a change in the drug benefit price is in the public interest, the executive officer may require the manufacturer to supply any information, other than personal information, that the executive officer considers relevant, and the manufacturer shall comply with the request.

Transitional

(9)  The drug benefit price of a drug product that was a listed drug product immediately before October 1, 2006 shall be its drug benefit price as it existed under this Act at that time, until it is changed as permitted under this Act and the regulations.

Change, previously listed drugs

(10)  The executive officer may, in accordance with the prescribed conditions, change the drug benefit price of any drug product that was listed in the Formulary that existed immediately before October 1, 2006 and that was referred to in the regulations made under this Act or the Drug Interchangeability and Dispensing Fee Act.

Conditions of payment

23.  (1)  The executive officer may require that, in respect of a specified drug product or class of drug products, specified clinical criteria must be met for the executive officer to pay an amount in respect of the supplying of that drug product or class of drug products for particular patients or a particular class of patients.

Publication

(2)  Where the executive officer specifies anything under subsection (1), he or she shall publish it in the Formulary.

Clinical criteria

(3)  Without limiting the generality of subsection (1), clinical criteria may include,

(a) considerations relating to the use or the possibility of the use of other drug products or therapies for particular patients or a particular class of patients;

(b) a requirement that the use of a drug product for particular patients or a particular class of patients require a prescription from a physician or member of a class of physicians specified by the executive officer;

(c) a requirement that a specified person or an expert panel recommend or approve the use of a drug product for particular patients or a particular class of patients.

When clinical criteria not met

(4)  If an operator of a pharmacy supplies a drug product for an eligible person and, because of the criteria set under this section, the executive officer is not required to pay an amount in respect of that supply, the operator may charge or accept payment from a person other than the executive officer in an amount equal to the sum of,

(a) the amount the executive officer would have paid under this Act, absent the criteria; and

(b) the amount the operator could have charged under this Act, absent the criteria.

Exception

(5)  Subsection (4) does not apply if, under section 16, the executive officer makes this Act apply in respect of the supplying of the drug product for the eligible person.

PART III
COMMENCEMENT AND SHORT TITLE

Commencement

29.  (1)  Subsections 4 (2) and (5), subsection 27 (23), this section and section 30 come into force on the day this Act receives Royal Assent.

Same

(2)  Sections 1, 2 and 3, subsections 4 (1), (3) and (4), sections 5 to 26, subsections 27 (1) to (22) and section 28 come into force on October 1, 2006.

Short title

30.  The short title of this Act is the Transparent Drug System for Patients Act, 2006.

EXPLANATORY NOTE

This Explanatory Note was written as a reader's aid to Bill 102 and does not form part of the law. Bill 102 has been enacted as Chapter 14 of the Statutes of Ontario, 2006.

Part I amends the Drug Interchangeability and Dispensing Fee Act. The amendments transfer the previous function and power of the Minister to make regulations designating products as interchangeable with others and the function and power of the Lieutenant Governor in Council to remove designations of interchangeable products by way of regulation to the executive officer of the Ontario public drug programs (the position of the executive officer is created by amendments to the Ontario Drug Benefit Act). The executive officer may designate products as interchangeable and remove such designations by publishing updates on the Formulary that will be maintained and published under the Ontario Drug Benefit Act. Conditions for designating products as interchangeable continue to be set out in the regulations. The Act is amended to make clear that nothing in the Act shall be construed to permit therapeutic substitution.

The executive officer is required to follow the same requirements for interchangeability as those that applied to the powers of the Minister and the Lieutenant Governor in Council.

One requirement for interchangeability is amended to include that products may be designated as interchangeable not only where they have the same active ingredients in the same dosage form, but also where they have similar active ingredients in a similar dosage form. "Similar active ingredients" is defined to mean different salts, esters, complexes or solvates of the same therapeutic moiety. The Minister will be enabled to make a regulation, before the Minister's functions and powers are transferred to the executive officer, to designate products as interchangeable where they have similar active ingredients and are in a similar dosage form, as soon as the Bill receives Royal Assent. This amendment to the Minister's regulation-making authority is repealed once the amendments pertaining to the executive officer come into force.

The Act is further amended to prohibit manufacturers, including their suppliers, distributors, brokers, and other agents, from providing a rebate to wholesalers, operators of pharmacies, companies that own, operate or franchise pharmacies or to their directors, officers, employees or agents with respect to interchangeable products or those products in respect of which the manufacturer has made an application to the executive officer for designation as interchangeable. The Act is also amended to prohibit any of those persons from accepting a rebate, directly or indirectly. The executive officer is empowered to make an order requiring the manufacturer, or those persons accepting a rebate to pay an amount, which reflects the value of the rebate, to the Minister of Finance. The amendments set out the calculation of the amount owing to the government, the process by which the manufacturer is to be notified of the amount payable, reconsideration of the amount, and steps that the executive officer may take for non-compliance. In addition, provision is made for a similar order against a person who accepts a prohibited rebate. The executive officer may require the manufacturer or other person accepting a rebate to pay a lesser amount, and if the executive officer decides to take this action, he or she must set out in the order the lesser amount and how it was calculated. Rebates may be further defined by regulation, including professional allowances, which are excluded from the definition of rebate. Certain regulations may only be made after a public consultation process.

Part II makes amendments to the Ontario Drug Benefit Act (ODBA). It includes principles pertaining to the public drug system. It creates the position of the executive officer of the Ontario public drug programs and sets out his or her functions and powers. Most of the functions and powers that previously rested with the Minister are transferred to the executive officer. The amendments further describe the Formulary and its contents. The Formulary is required to be kept and maintained by the executive officer and published on the Ministry of Health and Long-Term Care website.

Updating the Formulary is no longer dependent on the filing of regulations, but rather, the executive officer - and no longer the Minister or Lieutenant Governor in Council - has authority to designate listed drug products on the Formulary and remove products from the Formulary. Conditions for listing drug products continue to be as prescribed in the regulations; however, the executive officer, and not the Lieutenant Governor in Council, has the authority to set out specified clinical criteria that must be met as a condition for payment in respect of specified drug products or classes of drug products.

A Citizens' Council and Pharmacy Council are established to advise the executive officer. The Act also requires the Minister to establish a process to review recommendations made to the executive officer to list a drug product and decisions made by the executive officer not to designate a product as a listed drug product where recommendation was made by a body that advises the executive officer.

The Act is further amended to make clear that nothing in the Act shall be construed to permit therapeutic substitution.

The drug benefit price in respect of a listed drug product, previously set out in the regulations, may be determined by the executive officer, as agreed to by the executive officer and the manufacturer, and published in the Formulary, in accordance with provisions of the ODBA. The drug benefit price for products that are not on the Formulary, but for which the executive officer has made the ODBA apply through an exceptional access program, may also be determined by the executive officer, in accordance with the regulations. The executive officer may establish rules, criteria and procedures that a manufacturer must follow in submitting requests for changes to the drug benefit price.

The amendments include a number of regulation-making changes that enable, among other things, operators of pharmacies to be paid for professional services; the setting out in the regulations of conditions pertaining to the acquisition cost of a drug product for the operator of a pharmacy; the creation of regulations to address alternative payment mechanisms to operators of pharmacies for certain classes of eligible persons; and the setting of a mark-up of the drug benefit price that the executive officer will pay under ODBA; and the conditions for the payment of the dispensing fee. Certain regulations may only be made after a public consultation process.

The ODBA will allow pharmacies that operate in public hospitals to charge the same dispensing fee as pharmacies in the community.

The ODBA is further amended to prohibit manufacturers, including their suppliers, distributors, brokers, and other agents, from selling a listed drug product at a price higher than its drug benefit price as listed in the Formulary. Manufacturers are also prohibited from providing a rebate to wholesalers, operators of pharmacies, companies that own, operate or franchise pharmacies or to their directors, officers, employees or agents with respect to listed drug products, listed substances and designated pharmaceutical products or those products in respect of which the manufacturer has made an application to the executive officer for the listing of a drug product in the Formulary. The ODBA further prohibits those persons from accepting a rebate, directly or indirectly. The executive officer is empowered to make an order requiring the manufacturer to pay an amount as specified in the ODBA. The ODBA also sets out how the amount that exceeds the drug benefit price is determined and the calculation of the value of the rebate, including the process by which the manufacturer is to be notified of the amounts owing, the reconsideration of the amounts, and steps that the executive officer may take for non-compliance. Rebates may be further defined by regulation, including professional allowances, which are excluded from the definition of rebate. The procedures for enforcement are similar to those set out in the amendments to the Drug Interchangeability and Dispensing Fee Act, as are the provisions concerning persons who accept prohibited rebates. The executive officer is to establish a Code of Conduct respecting professional allowances under the ODBA and the Drug Interchangeability and Dispensing Fee Act in consultation with the pharmacy and drug manufacturing industries, and publish the Code of Conduct on the Ministry's website.

The ODBA is further amended to enable the executive officer, for the purpose of determining compliance with the ODBA or the Drug Interchangeability and Dispensing Fee Act, to require a manufacturer, wholesaler, supplier of a listed substance, operator of a pharmacy or a company that owns, operates or franchises pharmacies to provide information, other than personal information, to the executive officer, either in response to a specific request or at regular intervals. The executive officer may set out the time at which and the form in which the information must be provided.

Part III provides for commencement and the short title of the Act. The amendments to the Drug Interchangeability and Dispensing Fee Act and the Ontario Drug Benefit Act, other than a few that come into force on Royal Assent, come into force on October 1, 2006.

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