Major Changes Proposed for Ontario’s Drug Benefits System

On April 8, 2010, the Ontario Government released its highly anticipated proposed amendments to the Ontario Drug Benefits Act (ODBA) and Drug Interchangeability and Dispensing Fee Act (DIDFA). The amendments, which will significantly affect the reimbursement of generic prescription drugs in Ontario in both the public and private sector, are broader in scope and more dramatic than many stakeholders had anticipated. As expected, the proposed changes to the ODBA will reduce the professional allowances manufacturers pay to pharmacies for drugs reimbursed by the public sector. In addition, the ODBA amendments will limit the drug benefit price for interchangeable drugs. The proposed amendments to the DIDFA will cap prices in the private sector for drugs listed as interchangeable on the public sector Ontario Drug Benefits Formulary. The amendments to the two statutes will prohibit reimbursement for “private label products” and prohibit their designation as interchangeable, effective May 15, 2010. Although they will reduce pharmacy income, other amendments either provide additional sources of revenue or increase revenue from existing sources. Dispensing fees will be increased under the ODBA to help offset the reductions in professional allowances. Four new categories of pharmacies will be created and the increase in dispensing fee will relate to the category of pharmacy and will range from $1.00 to $4.00, depending on categorization. The proposed amendments to the ODBA and DIDFA are open for comment until May 8, 2010. For a more detailed discussion, follow this link to a longer article by Michael Migus. For the text of the Notice of Proposed Amendments, see: http://tinyurl.com/y6ghmo9 Summary by: Michael Migus