Amendments to Ontario Regulation 201/96 made under the Ontario Drug Benefit Act
Regulation - LGIC
Bill or Act:
Ontario Drug Benefit Act
Summary of Decision:
Effective September 1, 2017, the government amended Ontario Regulation 201/96 made under the Ontario Drug Benefit Act.
The amendments require the Executive Officer to reduce the amount paid to pharmacies for claims submitted to the Ontario Drug Benefit (ODB) program. The reduction is calculated as 2.8 per cent of the sum of the dispensing fee, compounding fee, and mark-up claimed by a pharmacy for all ODB-funded drug products.
This temporary adjustment took effect on September 1, 2017 and will end on whichever of the following dates occurs earlier: February 28, 2019 or the end of the pay period in which the total payment adjustment threshold of $35,000,000 is met.
June 26, 2017
Summary of Proposal:
Improving access and protecting Ontario's universal public health care system are two of the key objectives of health system transformation. To this end, improving access to and ensuring the sustainability of the Ontario Public Drug Programs (OPDP) is of critical importance.
In 2015, the government committed to achieving $200M in savings through the drug programs by implementing a number of pharmacy related and drug pricing initiatives. To implement these changes, the Ministry of Health and Long-Term Care (the "ministry") consulted with the Ontario Pharmacists Association (OPA) and the Neighbourhood Pharmacy Association of Canada (NPAC) to define these initiatives and their associated savings targets. The ministry implemented the following initiatives:
• Reduced mark-up for high-cost drugs;
• Reduced dispensing fee for claims for residents of long-term care homes;
• Introduction of a maximum quantity policy for chronic use medications; and
• A change to the "no substitution" policy in order to enhance the use of safe, effective generic alternatives to brand name products.
The pharmacy related initiatives, while yet to fully mature, are currently not meeting the savings expectations. As a result, a temporary adjustment to the amount the Executive Officer pays to pharmacies submitting claims to the Ontario Drug Benefit (ODB) program is being proposed to recover the shortfall that accrued in FY2016/17.
The proposed amendments to O. Reg. 201/96 made under the Ontario Drug Benefit Act would allow the Executive Officer to reduce the amount paid to pharmacies for claims submitted to the ODB program. The reduction would be calculated as 2.8 per cent of the sum of the dispensing fee, compounding fee, and mark-up claimed by a pharmacy for all ODB-funded drug products. This temporary adjustment would take effect on September 1, 2017 and end on whichever of the following dates occurs earlier: February 28, 2019 or the day the total payment adjustment reaches $35,000,000.
These proposed regulatory amendments would align with previous initiatives the government has undertaken to reduce the cost of our public drug programs, and allow the Province to invest more in new drug coverage for Ontarians. The ministry recognizes the important contribution made by pharmacies to strengthening Ontario's health care system and acknowledges the effect this temporary adjustment may have on the pharmacies that make the delivery of Ontario Public Drug Programs possible.
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
September 1, 2017