Regulation - LGIC

Reducing Administrative Burden to Drug Manufacturers and Pharmacies

Regulation Number(s):
Ontario Regulation 201/96; Regulation 935
Bill or Act:
Ontario Drug Benefit Act (ODBA), Drug Interchangeability and Dispensing Fee Act (DIDFA)
Summary of Proposal:
Ontario is committed to reducing administrative burden for drug manufacturers and pharmacies. As such, a series of regulatory amendments have been proposed that, if approved, would reduce technical requirements, address discrepancies and misalignments with industry standards and polices in other provinces and territories (P/Ts) and modernize existing processes for Ontario pharmacies.

These proposals respond directly to feedback from key industry stakeholders as well as recommendations from the Auditor General of Ontario. Below is a list of the proposals being considered. Attachment #1 compares each of the proposed regulation and current situation, identifies the intended outcome of the amendment and whether it would impact business.

1. Remove the requirement for the Drug Notification Form (DNF) from all ODB Formulary drug submissions
2. Reduce requirements for biosimilar drug submissions to simplify and align with national processes
3. Permit generic drug price adjustments
4. Streamline drug submission requirements for generic line extension
5. Revoke provisions authorizing Ontario to conduct price review of certain single source generic products as the required pricing assessment is already conducted through the current pan-Canadian generic pricing framework
6. Facilitate the management of drug shortages by allowing Ontario to provide short-term public funding, through the exemption of certain drug submission requirements, for clinically-appropriate alternate drugs that are not currently funded
7. Extend submission window for electronic drug claim reversals from 7 days to 90 days
8. Amend the definition of the Pharmacy Reference Manual to facilitate the publication of new versions of the Manual
9. Modify the cap for ordinary commercial term (OCT) payments from 10% to 25%

These proposed changes:
• would directly address challenges resulting from misalignment by reducing regulatory costs to pharmacies and the pharmaceutical industry;
• would ensure Ontario remains Open for Business for the pharmacy and pharmaceutical industry;
• would modernize processes for Ontario pharmacies and therefore reduce unnecessary burden for pharmacies; and
• in some cases, help lower the cost of drugs.

Analysis of Regulatory Impact:
There are no anticipated incremental direct compliance costs to business under the domains of fees to government, upfront/ongoing operating costs and administrative costs, as a result of the proposed regulatory amendments. These amendments are strictly related to removing or reducing existing requirements. Attachment #2 outlines the ministry's response under each domain.

The ministry considered the potential for incremental operating costs that may be incurred by Pharmacy Software Vendors (PSV's) as part of the Increase OLTP Reversal Window project. The impact to the PSVs is expected to be minimal. This initiative does not require the addition of new functionality, but instead would rely on updates to existing parameters and aligns with claims processing parameters used currently for private payer drug claims adjudication by pharmacies.

Other Costs
The proposal to extend submission window for electronic drug claim reversals from 7 days to 90 days is expected to result in one-time I&IT implementation cost to government.

The proposal to permit generic price adjustments in accordance with the tiered generic pricing framework are accounted for under the generic drugs initiative that reduce generic drug costs in the province.

Benefits
The estimated annual cost savings to business from implementing the series of proposed amendments is expected to exceed $1M. The exact cost savings to business would be determined through consultations with stakeholders.
Further Information:
Proposal Number:
19-HLTC032
Posting Date:
October 28, 2019
Comments Due Date:
November 27, 2019
Contact Address:
Ministry of Health
Drugs and Devices Division
5700 Yonge St., 3rd Floor
Toronto ON M2M 4K5