Canada: Quebec Unveils Exceptions To The Prohibition On Loyalty Programs

Last Updated: July 23 2018
Article by Mathieu Gagné, Jean-Raphaël Champagne, Dara Jospé and Jean H. Gagnon

Last Wednesday, July 4, 2018, the proposed regulation entitled "Exceptions à l'interdiction de payer ou de rembourser le prix d'un médicament ou d'une fourniture dont le paiement est couvert par le régime général d'assurance medicaments (exceptions to the prohibition to pay or reimburse the price of a drug or a supply, the payment of which is covered by the basic prescription drug insurance plan" [our translation]), was published in the Gazette officielle du Québec ("Draft Regulation").

More than 18 months after the enactment of Bill 92, the government finally revealed the exceptions that will allow the implementation of certain financial support programs. But, does the series of exceptions unveiled on July 4 contain genuine exclusions or is it instead a reversal of the general prohibition in the law?

Since the adoption of Bill 92, the Act respecting prescription drug insurance (CQLR, c. A-29.01) sets out a new prohibition for manufacturers, wholesalers and intermediaries to pay or reimburse all or part of the price of medication or supply covered by the plan, to both public and private sector beneficiaries.1

As part of the debates leading up to the passage of Bill 92, it was agreed to postpone enforcing this ban until the Minister of Health and Social Services ("Minister") defined a regulatory framework that allowed certain exceptions, including notably for humanitarian reasons. At the time, the goal was to limit the disruption that would have resulted from a sudden ban on all patient support programs with a financial component.

After spending more than a year and a half examining the issue of patient support programs, the Minister's experts have finally come up with the Draft Regulation, which contains three short provisions. Despite their succinctness, these provisions will undoubtedly affect the fate of support programs and are all the more surprising given what was announced in Bill 92.

Section 1

Section 1 of the Draft Regulation specifies that manufacturers, wholesalers and intermediaries may pay or reimburse the price of listed medications when: (i) the lowest price method does not apply; or (ii) no generic or biosimilar version is reimbursed.

It should be noted that the Minister has, in a sense, reversed the general prohibition in the act and finally chosen to avoid circumscribing the types of payments or reimbursements exempted based on the humanitarian nature of the programs. Rather than setting out specific and detailed exceptions, the Draft Regulation simply suggests that financial support programs are not prohibited unless the lowest price method applies or a generic or biosimilar is covered by the plan.

Even when a generic version is reimbursed, an interpretation of section 1 may suggest that financial assistance may be available if the physician indicates "do not substitute" in accordance with the relevant rules2 in force. Note, however, that the language of the current proposed draft generates significant confusion about whether all drugs for which the lowest price method does not apply (including prescribed products with a "no substitution" indication) are exempt from the ban or whether only drugs on the « Liste des médicaments pour lesquels la méthode du prix le plus bas ne s'applique pas3 » (List of drugs for which the lowest price method does not apply) are exempt.

Moreover, there is no doubt that loyalty-type programs aimed at maintaining the use of an innovative drug following the listing of a competitor's generic drugs will be banned in Quebec once the Draft Regulation comes into force. This ban is timely for pharmacists and secures their professional benefits as the members of the Association québécoise des pharmaciens propriétaires  (Quebec Association of Pharmacy Owners, or AQPP) have recently ratified their agreement with the Minister.

All in all, this is good news for patients who, in most cases, will continue to benefit from support programs with a financial component, at least until the listing of a generic or biosimilar drug.

In any case the exception in section 1 refers to the notion of "inscription" or "listing" but ignores any reimbursement conditions for exceptional medications. To this end, the use of the term "inscription" or listing is not inconsequential, since it seems broad enough to prohibit all compassionate or copayment programs once a generic is available, unless the physician mentions that a product cannot be substituted. Thus, a patient receiving an innovative product for an indication recognized for reimbursement by the basic plan in Quebec could be prohibited from receiving any assistance from the innovative company as soon as the generic is listed, even if the generic product in question is listed under different, more limiting reimbursement terms.4

Section 2

Section 2 includes a grandfather clause that would allow patients who have received a payment or reimbursement before the prohibition comes into force to continue receiving this financial assistance.

Needless to say, manufacturers, wholesalers and intermediaries whose programs are affected by the general prohibition must remain cautious. Indeed, the proposed grandfather clause does not allow the continuation of all programs; it only allows payment or reimbursement to persons who received the financial assistance in the past. The enrollment of new patients in existing programs would therefore not be permitted.

In fact, funding providers should identify who received payments before the prohibition comes into effect, taking great care, however, to respect the applicable rules on the protection of privacy.

Section 3

Section 3 deals with the coming into force of the regulations, which in turn will trigger the coming into force of the general prohibition under section 80.1 (2) of the Act respecting prescription drug insurance. It is fixed on the fifteenth day following the date of publication of the regulation adopted in the Gazette officielle du Québec.

Given the potential wide-reaching impact of the proposed changes, drug companies may be highly motivated to participate in the government's consultation on these proposed regulations. 

Comments may be provided in writing within 45 days following publication of the Draft Regulations.


1 Act respecting prescription drug insurance, (CQLR c A-29.01), s. 80.2(1) [Not in force]

2      See : RAMQ Infolettre 265, Nouvelles règles concernant le recours à la mention « ne pas substituer » (New rules on the use of the words "do not substitute"), February 19, 2015, online.

3      Schedule V of the list of medications published under section 60 of the Act respecting prescription drug insurance (CQLR c A-29.01).

4       It is worth noting, however, that the general prohibition of the law should not apply to drugs prescribed for an indication that does not meet the reimbursement conditions of the basic plan, even if a generic or biosimilar version is available, or reimbursed by the plan.

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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