The Ontario Ministry of Health and Long-Term Care (the Ministry)
has proposed amendments to the regulations made under the
Ontario Drug Benefit Act, which would impose new caps on
the prices of generic drugs. The Ministry is accepting comments on
the proposed amendments until December 21, 2014.1
The Current Regulations
The regulations under the Ontario Drug Benefit Act set
out the maximum benefits payable by the Ministry for brand or
"reference" drug products, and for generic drug products
that are interchangeable with a reference drug product. Under the
current regulations, benefits payable for most generic drugs are
capped at 25% of the price of the reference drug product, or 35%
for non-solid dosage forms such as liquids and creams. The Ministry
has some discretion to consider exemptions to these limits. For
instance, where there is only one generic drug available, then the
only restriction on the Ministry's discretion is that the
benefits payable for that generic drug must be less than what is
payable for the reference drug product.
The Proposed Amendments
Under the proposed amendment, the following rules will apply to
publicly reimbursed generic drugs:
If there is only one generic drug available in Canada, the
maximum benefit payable for that drug will be 75% of the reference
drug product benefit, or 85% if the reference product manufacturer
has not agreed to provide a volume discount to the Ontario Public
If there are two generic drugs available in Canada, then the
maximum benefit payable for those generic drugs will be 50% of the
reference drug product benefit; and
If there are three or more generic drugs available, then the
current 25% and 35% rules will apply.
The proposed amendments would also require that the maximum
payable benefits for a sole-source or dual-source generic drug
decrease as other generic drugs become available in Canada.
When determining the maximum benefit for a generic drug where
the reference drug is no longer sold in Ontario, the price of the
reference drug may be adjusted based on the Consumer Price Index
for Ontario for up to ten years after the reference drug was
discontinued in Ontario.
The proposal does not specify when the proposed amendments would
come into force if they are approved; however, the current draft of
the proposed amendments indicates that they will come into force
immediately upon filing.
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