Regulation - LGIC

COVID-19 Pandemic Response: Relief from Additional Co-Payment

Regulation Number(s):
O. Reg. 201/96
Bill or Act:
ONTARIO DRUG BENEFIT ACT
Summary of Proposal:
As of March 20, 2020, the Ministry recommended dispensing of no more than a 30-day supply of medication even though a greater supply may be prescribed and payable under the Ontario Drug Benefit (ODB) Program. The intention of this recommendation was to protect the drug supply chain and prevent drug shortages caused by significant stockpiling of medications and demand increases for treatment of patients with COVID-19. ODB program recipients are now paying more than 1 co-payment for the same supply of medication that is now being dispensed in instalments in accordance with the ministry's recommendation. This has cost implications for ODB program recipients. For example, a 3-month supply of medication previously dispensed at one time is now being dispensed in 3 instalments resulting in additional co-payments of up to $12.22 for that 3-month supply. The majority of seniors will experience increased costs of $24 to $50 per 3-month period; those with prescriptions for 5 or more medications will experience costs in excess of $70 per 3-month supply.

To help alleviate the unintended cost impact to ODB recipients, the Ministry of Health is proposing to amend Ontario Regulation 201/96 under the Ontario Drug Benefit Act (ODBA) to ensure that recipients are only paying 1 copayment for a 30+ day-supply being dispensed in instalments by reducing the co-payments to $0 for the 2nd and, if applicable, 3rd dispensing event.

MOH would reimburse pharmacies for the co-payment that they would no longer receive for the 2nd dispensing event. For the 3rd dispensing event, the Regulation would be amended to reduce the dispensing fee paid to pharmacies and dispensing physicians by the co-payment amount that would previously have been payable by the recipient (for example, reduced from $8.83 to $2.72 for prescriptions that require a $6.11 co-payment from seniors; and reduced from $8.83 to $6.83 for prescriptions that require a $2 co-payment).

The regulatory changes would only be applicable for the duration of government recommendation to limit dispensing to no more than a 30-day supply.
Analysis of Regulatory Impact:
Costs to Government: The estimated cost to government is up to 12.5M per month to reimburse co-payments for the 2nd dispense events resulting from the 30-day supply limit recommendation.

Cost to Business: The proposed regulatory changes pose material administrative burden on pharmacies as they would track the co-payments associated with each prescription and submit claims to the ministry for reimbursement for the full co-payment associated with the 2nd dispensing event that would no longer be payable by the recipient.

In addition to the administrative burden, this would cost up to $12.5M per month in lost co-payment fees (i.e., reduced dispensing fees) for the 3rd dispense event across pharmacies. However, MOH understands that in many cases pharmacies waive $2 off co-payments for prescriptions, which reduces the estimated total lost revenue. Additionally, MOH would reimburse pharmacies for the full amount of what would have been the co-payment for the 2nd dispensed event, which would provide pharmacies with an additional $2 reimbursement for each prescription that pharmacies may otherwise have voluntarily waived for recipients.

Benefits to Ontarians: On a monthly basis there are almost 1 million ODB recipients that have drug claims with a days' supply greater than 30 days. These recipients would be alleviated from the new co-payment expenses that would result from the government's recommendation to dispense no more than a 30-day supply. The majority of seniors would no longer experience increased costs of $24 to $50 per 3-month supply; those with prescriptions for 5 or more medications would no longer experience costs in excess of $70 per 3-month supply.
Further Information:
Proposal Number:
20-HLTC017
Posting Date:
May 1, 2020
Comments Due Date:
May 2, 2020
Contact Address:
n/a