The Ontario Ministry of Health and Long-Term Care (MOHLTC) announced, on May 20, 2015, changes to generic
drug pricing that are retroactive to April 1, 2013. The changes
include the introduction of tiered generic drug pricing, and are
the result of amendments to the regulations under the Ontario
Drug Benefit Act (the ODBA Regulations).
In November, 2014, the MOHLTC gave notice of proposed amendments
to the ODBA Regulations in respect of certain drug products
approved for listing on the Ontario Drug Benefit (ODB)/Comparative
Drug Index (the Formulary), which apply to public and private
reimbursement. The existing pricing framework required
manufacturers to set generic prices at 25% of the brand reference
product for solid dosage forms (e.g. tablets, capsules) and 35% for
non-solid dosage forms (e.g. solutions, creams).
The amendments to the ODBA Regulations permit the Executive
Officer to consider various new exemptions to the 25/35% price
requirements, including as follows:
where a generic product is the only
generic product listed on the Formulary (i.e. a single source
generic product), the price will be 75% of the brand reference
product or 85% if no province has a listing agreement in respect of
the brand reference product; and
where there are only two generic
products listed on the Formulary (i.e. dual source generic
products), then the price would be 50% of the brand reference
Where there are three or more generic products available, then
the standard 25/35% pricing would continue to apply.
Other amendments address potential price increases in respect of
generic products listed prior to 2006. For example, under the
amendments to the ODBA Regulations, the Executive Officer now has
the discretion to adjust a brand reference price based on the
Consumer Price Index by a factor of up to 10 years, or more where
it is in the public interest to do so.
Earlier this year, on March 10, 2015, the MOHLTC announced that four additional generic
molecules had been selected to be reduced to 18% of the brand price
(clopidogrel bisulfate, gabapentin, metformin, and olanzapine) as
part of the Pan-Canadian Competitive Value Price Initiative for
Generic Drugs, and the Drug Benefit Price for those products would
be effective as of April 1, 2015.
The MOHLTC states that the new tiered pricing framework,
resulting from the amendments to the ODBA Regulations, is not
anticipated to impact a large number of generic product
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