Proposed amendments to Ontario Regulation 201/96 made under the Ontario Drug Benefit Act
Amendment to O. Reg. 201/96
Regulation - LGIC
Bill or Act:
Ontario Drug Benefit Act
Summary of Decision:
Regulations approved as proposed.
November 5, 2014
Summary of Proposal:
Proposed amendments to O. Reg. 201/96 made under the Ontario Drug Benefit Act would establish a pricing framework for certain generic drug products approved for listing on the Ontario Drug Benefit (ODB) Formulary/Comparative Drug Index. Pricing for generic products listed on the Formulary apply to public and private reimbursement.
The current price framework requires manufacturers to set generic prices at 25% of the brand reference product for solid dosage forms (e.g., tablets, capsules) and 35% for non-solid dosage forms (e.g., solutions, creams). The current regulation includes a number of provisions for the Executive Officer of Ontario Public Drug Programs (Executive Officer) to consider exemptions to the 25/35% price requirements.
The proposed regulation would establish a framework for generic pricing for products listed on the Formulary on or after April 1, 2013 where there is only 1 or 2 generic products available in the Canadian market. The proposed amendments would set the price of a generic product, where there are no other generic products listed on the Formulary and/or available on the Canadian market ('single source generic product') at 75% of the brand reference product, provided that the Executive Officer has an agreement with the manufacturer of the relevant brand reference product respecting the payment of a volume discount or other amount by the manufacturer in respect of the brand product. If no such agreement exists between the Executive Officer and the manufacturer of the brand reference product, then the single source generic product is priced at 85% of the brand reference product. The price of a single source generic product that is set at 75/85% may be reviewed by the Executive Officer 120 days before the second anniversary date of listing. The Executive Officer may request additional information to be provided by the manufacturer to support the price of the drug product. The Executive Officer is required to complete her review of the price of the product within prescribed timelines.
Where there are 2 generic products available ('dual source generic products'), the price would be set at 50% of the brand reference product.
If there are 3 or more generic products, then the current 25/35% price rules apply.
The proposed regulation would also address instances where a brand product is longer be marketed in Ontario and, as a result, the reference price used for generic listings may be too low in light of inflation over a long period of time. For Ontario single and dual source generic products listed prior to 2006 the brand reference price may be adjusted based on CPI to a maximum of 10 years, for the purpose of adjusting the reference price for these older generic products.
The proposed regulation, if approved, would come into force on the day it is filed with the Registrar of Regulations.
Executive Officer of Ontario Public Drug Programs
Ministry of Health and Long-Term Care
80 Grosvenor Street, 9th Floor
Hepburn Block, Queen's Park
Toronto ON M7A 1R3
April 1, 2013