Canada: New Decision on Freedom of Information Re: Product Listing Agreements

On June 28, 2010, the Information and Privacy Commissioner of Ontario released a decision in Appeal Number PA08-294-2, which pertains to disclosure of Schedules to a product listing agreement between an unidentified drug company (the "affected party") and the Executive Officer of the Ontario Public Drug Programs ("OPDP"). The Information and Privacy Commissioner Adjudicator determined that the Schedules, which contain information relating to the drug benefit price, calculation of volume discount, and terms and conditions of listing, are exempt from disclosure.

Unlike in three previous orders issued in January 2010, also in respect of information relating to product listing agreements, the affected party was given notice by the Information and Privacy Commissioner of the appeal. However, the Adjudicator held that it was unnecessary to consider the affected party's submissions that the third party exemption in section 17(1) of the Freedom of Information and Protection of Privacy Act ("FIPPA") applied to the Schedules, given her determination that the Schedules were exempt from disclosure pursuant to section 18(1) of the FIPPA, which applies to information the disclosure of which would cause financial or other harm to a government institution.

Background to the Appeal before the Information Commissioner

By way of background, the original request was for copies of all pricing agreements between the OPDP and drug manufacturers since October 1, 2006. The Ontario Ministry of Health and Long-Term Care ("Ministry") did not notify the affected drug manufacturers of the request, but indicated to the requester (whose identity is unknown) that access to the agreements would be granted with severances made pursuant to section 18(1) on payment of a fee. The requester appealed the fee to the Information and Privacy Commissioner of Ontario.

During mediation between the requester/appellant and the Ministry, the request was narrowed to include agreements relating to only six drug manufacturers. Also during mediation, the Ministry provided the requester/appellant with a representative sample of a final listing agreement with a named drug company (the affected party). Only the Schedules to the sample agreement were severed. The requester/appellant advised the mediator that he wished to pursue access to the withheld Schedules to the sample agreement, but would not pursue access to the severed information in the agreements relating to the other five companies.

The affected party was notified of the appeal and filed its own appeal seeking a declaration that it was unlawful for the Ministry to have released the agreement in severed format without having provided prior notice to the affected party. The decision indicates that this appeal has been placed on hold pending judicial review proceedings of Orders PO-2863, PO-2864 and PO-2865 (issued January 13, 2010), which deal with a similar issue.

Both the affected party, and the innovative industry association, Rx&D, made representations objecting to the disclosure of the Schedules at issue in the appeal brought by the requester/appellant.

The Government's Interests Would be Harmed by Disclosure

The Adjudicator held that the Ministry's exemption in section 18(1) of FIPPA applies such that the Schedules to the product listing agreement are exempt from disclosure. Consistent with the rationale set out in Order PO-2865 (issued January 13, 2010), the Adjudicator held:

Based on my review of the records, I agree with the Ministry that disclosure of the information at issue in the records could reasonably be expected to attract the harms contemplated in sections 18(1)(c) and (d). The information at issue reveals how much a named manufacturer has agreed to pay the Ministry by way of a volume discount amount for a particular drug, as well as what other specific financial and value for money conditions the manufacturer agreed to provide to the Ministry. This information could be used by other potential bulk prescription drug purchasers as a discount standard or price goal to be obtained form the drug manufacturers.

I find that disclosure of the information at issue could reasonably be expected to discourage drug manufacturers in the future from negotiating large volume discounts and other favourable financial terms with Ontario, out of concern that this information could be used by their other public and private sector customers seeking to negotiate similar discounts with the drug manufacturers [Orders PO-2863 and PO-2786]. Furthermore, other drug manufacturers would expect Ontario to negotiate a lower volume discount in the future for their drugs, if it is revealed that Ontario was willing to negotiate a lesser discount for a similar drug with another drug manufacturer. I find that disclosure of the information at issue could reasonably be expected to seriously prejudice the Ministry's ability to secure savings on prescription drugs by weakening its bargaining position in negotiations with manufacturers [Oder PO-2780].

The Public Interest in Disclosure

The Adjudicator rejected the requester/appellant's argument that there exists a compelling interest in disclosure of the Schedules that outweighs the purpose of the section 18(1) exemption. The Adjudicator quoted the representations made by the affected third party and Rx&D on the issue of whether it was in the public interest to release the information, including the following submissions made by Rx&D:

There is no public harm in refusing to disclose the information that is at issue. Indeed, Rx&D suspects that there would be significant public harm in disclosing the information, as Canada would be out of step with other jurisdictions in their practices, as Rx&D understands them to be, relating to the disclosure of this commercial and highly sensitive information. Rx&D further believes that if such information is disclosed, there is significant risk for Ontario that there would be higher prices for products, and fewer product listings, resulting in less access to needed drugs by patients. . .

Pricing and market access are issues of great importance to the innovative industry represented by Rx&D. If information that was clearly submitted to the Ontario government in confidence and with the expectation that it would be held in confidence were now disclosed, Rx&D submits this would be devastating for the industry, and would affect the investment climate with a negative effect on its members. Confidence in both Ontario and Canada as a place to do business would decline, with the resulting uncertainty and potential job losses.

In the result, the Adjudicator held, on the issue of the public interest, that:

Although the appellant claims that the volume discounts scheme leaves many in Ontario on private plans and without coverage paying higher drug prices, I am not satisfied that even if this is the case that disclosure of the information at issue would significantly aid in remedying this situation. The information in issue reveals how much the Ontario government pays for a particular drug purchased in bulk from a drug manufacturer for its ODB program. This pricing information does not relate to the pricing of the same drug purchased by private interests.

The information sought to be disclosed in the context of this appeal is not relevant to public health and safety, which is monitored by the drug approval process. In the circumstances of this appeal, the relevant decision making body, the ODB Program has full disclosure of all relevant information required to make the listing decision for the specific drug named in the records, including the recommendations received by CDR regarding clinical and cost effectiveness. I agree with the Ministry that it has provided sufficient information to satisfy whatever public interest may exist in this agreement, without revealing information that both the Executive Officer and the affected party, the drug manufacturer, consider highly confidential.

"... the information already disclosed serves to inform the public about many of the specifics of listing agreements. The only information severed from the listing agreement is the schedules which contain information as to the negotiated volume discount amount and the conditions of listing the specific drug product."

For a copy of the decision, see: Order PO-2898

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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