On April 1, 2014, a Standing Committee of the Ontario Government
on Social Policy (Committee) published its report on Diluted
Chemotherapy Drugs. This report was prepared in response to the
discovery that 1,202 patients in Ontario and New Brunswick received
diluted doses of two admixed chemotherapy drugs (gemcitabine and
cyclophosphamide). If the recommendations of the Committee are
implemented, there may be significant changes with respect to the
procurement of drugs products through the current RFP processes in
Ontario, particularly with respect to the inclusion of rebates and
By way of background, Medbuy, a national group purchasing
organization, issued an RFP for pharmaceutical products, which was
awarded to Marchese Health Care (Marchese). It was later discovered
that Marchese supplied patients diluted doses of gemcitabine and
cyclophosphamide. The facility that supplied the drugs was
unregulated, meaning that it did not hold a drug establishment from
Health Canada, or a provincial pharmacy license. In essence,
Marchese's activities fell in a grey area between drug
manufacturing and pharmacy compounding.
The Committee made several recommendations, including further
oversight and national standards for the labelling of chemotherapy
drugs. Of particular interest to manufacturers is the
Committee's recommendation that the Government of Ontario take
steps to prohibit rebates and value adds in government contracts.
These incentives are currently permissible under the Broader Public
Sector Procurement Directive if "directly relevant and
transparently connected" to a procurement. With respect to
value adds, the Committee noted that, while not mandatory, value
adds were encouraged during the RFP process and included in the
scoring process. However, the Committee cited a lack of
transparency with respect to how rebates are offered and used by
group purchasing organizations and hospitals alike. If the
recommendations of the Committee are implemented, manufacturers
will have to reconsider their current pricing and value strategies
when responding to an Ontario Government RFP.
For more information, the full text of the report on diluted
chemotherapy drugs can be found here.
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