On July 10, 2009, David Caplan, the Minister of Health and Long
Term Care of the Government of Ontario, announced plans for a
substantial review of the drug system in Ontario. This review comes
approximately 3 years after the completion of the reform process
that lead to the Transparent Drug System for Patients Act (Bill
The Government believes that it has made progress under Bill
102, including better management of the public drug program,
savings of over $600 million that have been reinvested into
Ontario's drug system, improved access: faster drug funding
decisions and innovative agreements, enhanced pharmaceutical
reimbursement and greater patient and public participation. At the
same time, the Government has indicated that it believes that
further improvements are needed before Ontario can be said to
achieving world-class value for money.
The Government has identified a number of major issues that
remain to be addressed including: the need to fund the increasing
demand for drugs and make new investments in drugs, increasing
spending for generic drugs, supporting a higher number of
pharmacies per capita than elsewhere, unacceptable practices
occurring within the existing system (i.e., abuse of the rules with
respect to professional allowances), and the fact that other
jurisdictions have taken substantial steps across the value chain
to reduce prices not yet undertaken in Ontario.
In preparing to launch a broad consultation process with
stakeholders, the Government has already consulted a wide range of
sources of expert advice and has identified a range of options.
These options include changes to the (i) rules regarding
professional allowances, (ii) services of pharmacies that are
compensated, (iii) rules with respect to distribution channels, and
(iv) the pricing of generics and brand name drugs.
The Government is in the process of establishing multiple
discussion tables to solicit feedback from various stakeholder
communities. Some of the tables will focus on sector
–focused themes (e.g., issues that impact pharmacies) and
others on "crosscutting issues (e.g., sustainability of public
and private plans). The participants in the discussions will be
largely the industry associations. The consultations are to be
concluded in September.
The Government has indicated that once the consultation process
was concluded it would proceed with changes, starting with those
that did not require legislative or regulatory changes. It was
suggested by Minister Caplan that an legislative changes would
likely find their way to the Provincial Legislature in the first
half of 2010. While the Government has been careful to outline
issues that affect all of the participants in the drug distribution
system in Ontario, it seems clear that the primary focus is with
the respect to the compensation of pharmacies and the pricing of
generic drugs. Each of these issues was addressed substantively in
the Bill 102 reforms. The reforms that were implemented as part of
the Bill 102 process have not yielded the results that were
In addition, the scope of this reform process is broader that in
the case of Bill 102. In the latter case the focus was on the
public market. The current review is said to include both the
public and private markets.
As the process develops further briefing notes will be prepared
and circulated by BLG.
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