On November 5, 2014, the Ontario Ministry of Health and
Long-Term Care posted proposed amendments to O. Reg. 201/96 made under
the Ontario Drug Benefit Act. If enacted, the proposed
amendments will establish a new pricing framework for generic
products listed on the Ontario Drug Benefit (ODB)
Formulary/Comparative Drug Index (the Formulary) on or after April
1, 2013 for which there are only one or two generic products
available in Canada. In general, the proposed amendments are as
For a single source generic drug
product, the maximum drug benefit price will be 75% of the drug
benefit price of the brand manufacturer product or 85% if the brand
manufacturer has not agreed to provide a volume discount to the
Ontario Public Drug Programs.
If there are two generic drugs
available in Canada, the maximum drug benefit price will be 50% of
the drug benefit price of the brand manufacturer product.
If there are three or more generic
drugs available in Canada, the current rules (generally 25% for
solid dosage and 35% for non-solid dosage forms) apply.
For single source generic drug products (i.e., drug products
where the price is set at 75% or 85% of the brand manufacturer
product), the price may be reviewed by the Executive Officer of the
Ontario Public Drug Programs 120 days before the second anniversary
date of the listing. In conducting such review, the Executive
Officer may request additional information to be provided by the
manufacturer to support the price of the drug product including,
but not limited to, raw material costs, manufacturing costs, cost
of goods sold, price of the product in comparable jurisdictions
outside of Canada, and specialized labour costs or unique market
conditions that might result in significant patient safety or
access concerns or significant cost increases to the Government of
Ontario if the product is not continued to be listed at the same
drug benefit price. If the information is not provided, the product
will not continue to be designated as a listed drug product on the
The legislation appears to be aimed at discouraging those
generic manufacturers of limited source generic drug products
(e.g., where the generic molecule is only available from two or
three manufacturers) from only introducing these generic drug
products in Ontario if the manufacturer can obtain single source
status. As the amendments reference generic drugs available in
Canada (not just on the Formulary), the introduction of an
interchangeable generic drug in any jurisdiction in Canada will
result in a reduction in the drug benefit price of a single source
generic drug listed on the Ontario Formulary. It is important to
note that the amendments only apply to generic drugs listed on the
Formulary on or after April 1, 2013.
Written comments on the proposed changes will be
accepted by the Ministry of Health and Long-Term care until
December 21, 2014 at 5:00 p.m. EST.
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