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R.R.O. 1990, Reg. 935: GENERAL

under Drug Interchangeability and Dispensing Fee Act, R.S.O. 1990, c. P.23

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Drug Interchangeability and Dispensing Fee Act
Loi sur l’interchangeabilité des médicaments et les honoraires de préparation

R.R.O. 1990, REGULATION 935

GENERAL

Historical version for the period April 1, 2011 to March 31, 2012.

Last amendment: O. Reg. 221/10.

This Regulation is made in English only.

1. (1) In this Regulation,

“original product” means the original source of a drug product in a particular strength and dosage form;

“production size lot” means the amount of finished product that is made from the minimum quantity of raw materials specified in a formula that can be processed using full sized production equipment into a dosage form that meets the specifications for the finished product.

R.R.O. 1990, Reg. 935, s. 1; O. Reg. 235/92, s. 1; O. Reg. 460/92, s. 1; O. Reg. 757/92, s. 1; O. Reg. 101/93, s. 1; O. Reg. 318/93, s. 1 (1); O. Reg. 453/93, s. 1; O. Reg. 524/93, s. 1; O. Reg. 526/93, s. 1; O. Reg. 735/93, s. 1; O. Reg. 49/94, s. 1 (1); O. Reg. 108/94, s. 1; O. Reg. 452/94, s. 1 (1); O. Reg. 615/94, s. 1; O. Reg. 755/94, s. 1 (1); O. Reg. 792/94, s. 1; O. Reg. 40/95, s. 1; O. Reg. 305/95, s. 1; O. Reg. 371/95, s. 1; O. Reg. 479/95, s. 1 (1); O. Reg. 177/96, s. 1; O. Reg. 337/96, s. 1; O. Reg. 376/96, s. 1; O. Reg. 509/96, s. 1 (1); O. Reg. 28/97 s. 1; O. Reg. 111/97, s. 1; O. Reg. 300/97, s. 1; O. Reg. 613/98, s. 1; O. Reg. 73/99, s. 1; O. Reg. 333/99, s. 1; O. Reg. 402/99, s. 1; O. Reg. 587/99, s. 1; O. Reg. 201/00, s. 1 (1); O. Reg. 367/00, s. 1; O. Reg. 583/00, s. 1; O. Reg. 15/01, s. 1; O. Reg. 173/01, s. 1 (1); O. Reg. 359/01, s. 1; O. Reg. 63/02, s. 1; O. Reg. 215/02, s. 1; O. Reg. 394/02, s. 1; O. Reg. 89/03, s. 1; O. Reg. 335/03, s. 1; O. Reg. 59/04, s. 1; O. Reg. 183/04, s. 1; O. Reg. 215/04, s. 1; O. Reg. 277/04, s. 1; O. Reg. 319/04, s. 1; O. Reg. 358/04, s. 1; O. Reg. 378/04, s. 1; O. Reg. 6/05, s. 1; O. Reg. 13/05, s. 1; O. Reg. 35/05, s. 1; O. Reg. 128/05, s. 1; O. Reg. 188/05, s. 1; O. Reg. 190/05, s. 1; O. Reg. 240/05, s. 1; O. Reg. 418/05, s. 1; O. Reg. 458/05, s. 1; O. Reg. 485/05, s. 1 (1); O. Reg. 488/05, s. 1; O. Reg. 500/05, s. 1 (1); O. Reg. 545/05, s. 1; O. Reg. 54/06, ss. 1 (1); O. Reg. 203/06, s. 1; O. Reg. 458/06, s. 1 (1-3).

(1.1) Revoked: O. Reg. 54/06, s. 1 (2).

(1.2), (1.3) Revoked: O. Reg. 458/06, s. 1 (4).

(2) For the purposes of subsection 1 (2) of the Act,

“therapeutic substitution” means the substitution of a drug that contains chemically different active ingredients that are considered to be therapeutically equivalent, without authorization from a person authorized to prescribe drugs within the scope of his or her practice of a health profession. O. Reg. 458/06, s. 1 (4).

(3) For the purposes of subsection 7 (2) of the Act, “the lowest amount” means the lowest amount determined without reference to the drug benefit price of the drug published in the Formulary. O. Reg. 558/06, s. 1.

Note: On April 1, 2012, subsection (3) is revoked. See: O. Reg. 221/10, ss. 1, 7 (4).

(4) Revoked: O. Reg. 458/06, s. 1 (4).

(5) Revoked: O. Reg. 485/05, s. 1 (2).

(6) Revoked: O. Reg. 458/06, s. 1 (4).

2. (1) For the purposes of section 12.1 of the Act,

“professional allowance”, in the definition of “rebate”, means, subject to subsection (2), a benefit, in the form of currency, services or educational materials that are provided by a manufacturer to persons listed in subsection 12.1 (1) of the Act for the purposes of direct patient care as set out in paragraphs 1 to 8 of this subsection:

1. Continuing education programs that enhance the scientific knowledge or professional skills of pharmacists, if held in Ontario.

2. Continuing education programs for specialized pharmacy services or specialized certifications, if held in North America.

3. Clinic days provided by pharmacists to disseminate disease or drug-related information targeted to the general public including flu shot clinics, asthma clinics, diabetes management clinics, and similar clinics. For this purpose, a “clinic day” includes any additional staff to support the clinic day or the regular pharmacy business while the pharmacist is hosting a clinic day, during that day.

4. Education days provided by pharmacists that are targeted to the general public for health protection and promotion activities. Such education days must be held in the pharmacy, or a school, long-term care home, community centre, place of worship, shopping mall, or a place that is generally similar to any of these. For this purpose, an “education day” includes any additional staff to support the education day or the regular pharmacy business while the pharmacist is hosting an education day, during that day.

5. Compliance packaging that assists their patients with complicated medication regimes.

6. Disease management and prevention initiatives such as patient information material and services, blood pressure monitoring, blood glucose meter training, asthma management and smoking cessation, used in their pharmacy. For this purpose, “disease management and prevention initiatives” includes any additional staff required to support these initiatives or the regular pharmacy business while the pharmacist is hosting a disease management and prevention initiative, during the time it is being held.

7. Private counselling areas within their pharmacy.

8. Hospital in-patient or long-term care home resident clinical pharmacy services, such as medication reconciliation initiatives or other hospital or long-term care home-identified clinical pharmacy priorities. For this purpose, “clinical pharmacy services” includes the costs of any additional staff required to support these services or the regular pharmacy business while the pharmacist is hosting a clinical pharmacy service, during the time it is being held. O. Reg. 458/06, s. 2.

Note: On April 1, 2013, subsection (1) is revoked. See: O. Reg. 221/10, ss. 2 (6), 7 (5).

(1.1) Where the value of all of the benefits provided under subsection (1) exceeds the value of X in the formula below, in respect of all of a manufacturer’s interchangeable products that are dispensed by a pharmacy and that are not reimbursed under the Ontario Drug Benefit Act, then the benefits that are in excess of X are a rebate and not a professional allowance,

X = 35% of P

Note: On April 1, 2012, the formula is amended by striking out “35%” and substituting “25%”. See: O. Reg. 221/10, ss. 2 (3), 7 (4).

where,

“X” is the total dollar amount of professional allowances that may be provided by a manufacturer to persons listed in subsection 12.1 (1) of the Act, and

“P” is the total dollar amount of a manufacturer’s interchangeable products, whether or not the products are listed drug products under the Ontario Drug Benefit Act, that are not reimbursed under the Ontario Drug Benefit Act, based on the number of units dispensed by the pharmacy, at each product’s price, which shall not exceed the price the product may be sold at under subsection 8 (1) where that subsection applies to the product.

O. Reg. 221/10, s. 2 (1, 2).

Note: On April 1, 2013, subsection (1.1) is revoked. See: O. Reg. 221/10, ss. 2 (6), 7 (5).

(2) A benefit is not a professional allowance if the contents of the Code of Conduct set out in Schedule 1 are not complied with. O. Reg. 221/10, s. 2 (4).

Note: On April 1, 2013, subsection (2) is revoked. See: O. Reg. 221/10, ss. 2 (6), 7 (5).

(3) For the purposes of section 12.1 of the Act, a “rebate” does not include the value of a benefit that is provided in accordance with ordinary commercial terms that meet all of the following conditions:

1. The benefit is provided in the ordinary course of business in the supply chain system of interchangeable products between any of a manufacturer, a wholesaler, an operator of a pharmacy or a company that owns, operates or franchises pharmacies.

2. The value of the benefit is set out in a written agreement between any of a manufacturer, a wholesaler, an operator of a pharmacy and a company that owns, operates or franchises pharmacies.

3. The benefit relates to an ordinary commercial relationship that is any of the following:

i. A prompt payment discount.

ii. A volume discount.

iii. A distribution service fee.

4. In the case of product that is not supplied to an eligible person under the Ontario Drug Benefit Act, the total value of any benefits does not exceed 10 per cent of the value of the interchangeable products based on the number of units dispensed by a pharmacy at each product’s price, which shall not exceed the price the product may be sold at under subsection 8 (1) where that subsection applies to the product.

5. A person who receives the benefit reports to the executive officer, if required by the executive officer to do so, the net selling price of the drug products representing the price of the product less the value of the benefits received. O. Reg. 221/10, s. 2 (5).

3. Revoked: O. Reg. 458/06, s. 2.

4. Revoked: O. Reg. 204/96, s. 1.

5. A person may charge more than the person’s usual and customary dispensing fee for a product that is supplied pursuant to a prescription if the person explains why a fee in excess of the usual and customary fee is being charged prior to the dispensing of the prescription and the charging of the additional fee is not an act of professional misconduct under section 1 of Ontario Regulation 681/93 made under the Pharmacy Act, 1991. R.R.O. 1990, Reg. 935, s. 5; O. Reg. 377/94, s. 1.

6. (1) It is a condition for each strength and dosage form of a drug product to be designated as interchangeable with other products that the manufacturer of the drug product submit to the executive officer,

(a) evidence that Health Canada has approved the product for sale in Canada, a copy of the product’s drug notification form issued by Health Canada and, subject to subsection (2), a copy of the product monograph approved by Health Canada;

(b) a letter authorizing the executive officer to gain access to all information with respect to the product in the possession of Health Canada, the Patented Medicine Prices Review Board established under section 91 of the Patent Act (Canada), the government of any province or territory in Canada or the Canadian Agency for Drugs and Technologies in Health and authorizing the executive officer to disclose any information with respect to the product in the possession of the Ministry to Health Canada, the Patented Medicine Prices Review Board, the government of a province or territory in Canada or the Canadian Agency for Drugs and Technologies in Health;

(c) documentation disclosing the product’s master formulation;

(d) the proposed drug benefit price of the product, where it is proposed that the product be designated as a listed drug product under the Ontario Drug Benefit Act, and a proposed manufacturer’s list price where it is not proposed that the product be so designated;

(d.1) Revoked: O. Reg. 496/00, s. 1 (4).

(e) evidence that the manufacturer is able to supply the product at the proposed drug benefit price in a quantity sufficient to meet the anticipated demand for the product where it is proposed that the product be designated as a listed drug product under the Ontario Drug Benefit Act;

(f) certification in writing that no rebate as defined in subsection 12.1 (14) of the Act has been provided to a person listed in subsection 12.1 (1) of the Act with respect to the product contrary to the Act since Health Canada approved the product for sale in Canada;

(g) Revoked: O. Reg. 496/00, s. 1 (5).

(h) comparative bioavailability studies on humans, comparative clinical studies on humans, or both, or other in vivo studies that will show the interchangeability of the product with the original product.

(i) Revoked: O. Reg. 496/00, s. 1 (6).

O. Reg. 18/96, s. 1; O. Reg. 204/96, s. 2; O. Reg. 28/97, s. 2 (1, 2); O. Reg. 496/00, s. 1 (1-6); O. Reg. 337/03, s. 1 (1); O. Reg. 644/05, s. 2; O. Reg. 458/06, s. 3 (1-3); O. Reg. 321/07, s. 1 (1).

(2) If Health Canada has not approved a product monograph for a drug product, the manufacturer of the product may, instead of submitting a copy of the product monograph as required under clause (1) (a), submit to the executive officer the following information:

1. Pharmaceutical information.

2. Information with respect to the product’s clinical pharmacology.

3. Information as to the product’s indications and clinical use.

4. A list of any contra-indications, warnings or precautions in the use of the product and of possible adverse reactions to its use.

5. A list of symptoms of an overdose of the product and information as to the treatment of an overdose.

6. Information with respect to the dosage and administration of the product.

7. Information regarding the availability of dosage forms for each strength of the product marketed in Canada. O. Reg. 18/96, s. 1; O. Reg. 496/00, s. 1 (7); O. Reg. 458/06, s. 3 (4).

(3) Clauses (1) (c) and (h) do not apply to the manufacturer of a drug product if the dosage form, strength, formula and manufacturing process of the product and the testing standards for both the raw materials of the product and the finished product are identical to those of the product with which it seeks to be designated as interchangeable. O. Reg. 18/96, s. 1; O. Reg. 496/00, s. 1 (8).

(4) A manufacturer may satisfy the condition set out in clause (1) (h) for a strength of a drug product by submitting the evidence referred to in clause (1) (h) for another strength of the same dosage form of the drug product if that information is sufficient for the purposes of evaluating the interchangeability of both the strengths of the dosage form of the product. O. Reg. 18/96, s. 1.

(5) Clause (1) (h) does not apply with respect to a drug product that is pharmaceutically equivalent to the original product, demonstrates the same physicochemical properties of the original product, is the same dosage form, packaging format and volume as the original product and is one of the following:

1. A parenteral aqueous solution, or a powder for reconstitution into an aqueous solution, that may be administered in an intravenous, intramuscular, subcutaneous or intrathecal fashion and that is in the same solvent and in the same concentration as the original product.

2. An oral solution, elixir, syrup or other similar solubilized form in the same concentration as the original product and which contains no ingredient that will affect the bioavailability of the active ingredient.

3. An ophthalmic, otic, nasal, rectal, vaginal or inhaled solution that is topical and aqueous. O. Reg. 18/96, s. 1; O. Reg. 496/00, s. 1 (9).

(5.1) For the purposes of subsection (5), if a drug product has been designated by Health Canada on or after February 15, 2005 as equivalent to the original product or to another listed interchangeable product with which it would be designated as interchangeable, the drug product shall be deemed to be pharmaceutically equivalent to the original product and to demonstrate the same physicochemical properties of the original product. O. Reg. 485/05, s. 2 (1); O. Reg. 321/07, s. 1 (2).

(6) Clause (1) (c) does not apply with respect to a product that has been designated by Health Canada as equivalent to the original product or to another listed interchangeable product with which it would be designated as interchangeable unless the product is described in subsection (5). O. Reg. 485/05, s. 2 (2).

(7) Clause (1) (h) does not apply to a product that is a solid oral dosage form for systemic effect and that has been designated by Health Canada as equivalent to the original product or to another listed interchangeable product with which it would be designated as interchangeable. O. Reg. 485/05, s. 2 (2).

(8) Anything submitted to the Minister under this section before October 1, 2006 shall be deemed to have been submitted to the executive officer, and any authorization given to the Minister shall be deemed to have been given to the executive officer. O. Reg. 458/06, s. 3 (5).

7. Where it is proposed that the strength and dosage form of a product be designated as interchangeable and it is proposed that it also be designated as a listed drug product under the Ontario Drug Benefit Act, an additional condition to be met in order for it to be designated as interchangeable is that the proposed drug benefit price must be no greater than the price permitted under that Act for the strength and dosage form of the product. O. Reg. 221/10, s. 3.

8. (1) The following conditions must be met in order for a drug product that has been designated as interchangeable to continue to be designated as interchangeable:

1. The manufacturer of the product shall give the executive officer notice of any change made to the product, including a formulation change, and of any change in the ownership of the manufacturer.

2. The product must be authorized for sale under the Food and Drugs Act (Canada).

3. The manufacturer of the product must continue to be able to supply the product at the drug benefit price in a quantity that is sufficient to meet the demand for the product where the product is designated as a listed drug product under the Ontario Drug Benefit Act.

4. If the product is a listed drug product under the Ontario Drug Benefit Act, the price of the product may not be more than the drug benefit price permitted under that Act where it is supplied to an eligible person under that Act.

Note: On April 1, 2012, paragraph 4 is revoked and the following substituted:

4. If the product is a listed drug product under the Ontario Drug Benefit Act, the manufacturer shall not sell the product at a price higher than the drug benefit price permitted under that Act whether or not the product is supplied for the purposes of that Act.

See: O. Reg. 221/10, ss. 4 (3), 7 (4).

5. Subject to paragraph 6, if the product is a listed drug product under the Ontario Drug Benefit Act, but the manufacturer is not selling the product for the purpose of supplying it to an eligible person under that Act, the manufacturer shall not sell the product at a price higher than 35 per cent of the drug benefit price of the original product as set out in the Formulary on the date the product was first proposed for designation as interchangeable with the original product.

Note: On April 1, 2012, paragraph 5 is revoked. See: O. Reg. 221/10, ss. 4 (3), 7 (4).

5.1, 5.2 Revoked: O. Reg. 221/10, s. 4 (1).

6. If the price set out in paragraph 5 is lower than the drug benefit price permitted under the Ontario Drug Benefit Act, then the manufacturer shall not sell the product at a price higher than the drug benefit price permitted under the Ontario Drug Benefit Act.

Note: On April 1, 2012, paragraph 6 is revoked. See: O. Reg. 221/10, ss. 4 (3), 7 (4).

7. If the drug product has not been designated as a listed drug product under the Ontario Drug Benefit Act, the manufacturer of the product shall give the executive officer notice of every change in the manufacturer’s list price for the drug product.

8. The manufacturer must not have provided a rebate as defined in subsection 12.1 (14) of the Act to a person listed in subsection 12.1 (1) of the Act with respect to the product contrary to the Act since Health Canada approved the product for sale in Canada.

9. If required by the executive officer, the manufacturer of a product that has been designated as interchangeable shall inform the executive officer of the price that the manufacturer receives for the product, net of the value of any professional allowances or ordinary commercial terms. O. Reg. 28/97, s. 3; O. Reg. 458/06, s. 5 (1-4); O. Reg. 558/06, s. 3 (1, 2); O. Reg. 321/07, s. 2 (1-4); O. Reg. 354/08, s. 2 (1-3); O. Reg. 221/10, s. 4 (1, 2, 4).

Note: On April 1, 2013, paragraph 9 is amended by striking out “professional allowances or”. See: O. Reg. 221/10, ss. 4 (5), 7 (5).

(2) For greater certainty, the conditions set out in subsection (1) apply whether the designation of the product as an interchangeable product took place before, on or after July 1, 2010. O. Reg. 458/06, s. 5 (5); O. Reg. 221/10, s. 4 (6).

(3) Revoked: O. Reg. 221/10, s. 4 (7).

(4) Revoked: O. Reg. 221/10, s. 4 (9).

9. (1) A product that is a private label product shall not be designated as interchangeable. O. Reg. 221/10, s. 5.

(2) In this section,

“private label product” includes a drug product in respect of which,

(a) the manufacturer applying for the designation of the product as a listed drug product does not directly fabricate the product itself, and

(i) is not controlled by a person that directly fabricates the product, or

(ii) does not control the person that directly fabricates the product, and

(b) either,

(i) the manufacturer does not have an arm’s-length relationship with a wholesaler, an operator of a pharmacy or a company that owns, operates or franchises pharmacies, or

(ii) the product is to be supplied under a marketing arrangement associating the product with a wholesaler or one or more operators of pharmacies or companies that own, operate or franchise pharmacies. O. Reg. 221/10, s. 5.

SCHEDULE 1
CODE OF CONDUCT

The Code of Conduct is intended to establish system-wide guidance governing the use of professional allowances to be paid by manufacturers to operators of pharmacies, or companies that own, operate or franchise pharmacies, or to their directors, officers, employees or agents.

Where the term “representative” is used in this Code of Conduct, it means an officer, director, employee, or agent.

Fundamental Principles

1. Payments from manufacturers to operators of pharmacies, or companies that own, operate or franchise pharmacies, including their directors, officers, employees or agents, in the form of a professional allowance must be used only for any or all of the activities set out in paragraphs 1 to 8 of the definition of “professional allowance” in subsection 2 (1) of the regulation.

2. All persons involved in the drug distribution system must operate transparently. To act transparently, manufacturers, operators of pharmacies, or companies that own, operate or franchise pharmacies, including their directors, officers, employees or agents must make the executive officer and other stakeholders knowledgeable of, and fully understand, the flow of funds in the drug products supply chain. This includes recording and reporting all such payments as required by the executive officer, and being subject to audit by the Ministry or a third party.

3. All suppliers of drug products as well as operators of pharmacies, or companies that own, operate or franchise pharmacies, including their directors, officers, employees or agents, must commit to abide by this Code of Conduct. Any breach of the Code will be subject to enforcement as set out in the Ontario Drug Benefit Act and the Drug Interchangeability and Dispensing Fee Act.

Use of Professional Allowances

Operators of pharmacies or companies that own, operate or franchise pharmacies may use professional allowances. Programs and information contained in educational materials must be full, factual and without intent to mislead.

Professional allowances may never be used for:

1. Advertising or promotional materials, such as store flyers, except in association with clinic days, education days, disease management and prevention initiatives and clinical pharmacy services mentioned in paragraphs 3, 4, 6 and 8 of the definition of “professional allowance” in subsection 2 (1) of the regulation.

2. Entertainment, social and sporting events.

3. Meals and travel not directly associated with a program referred to in paragraphs 1 to 4 of the definition of “professional allowance” in subsection 2 (1) of the regulation.

4. Convention displays.

5. Personal gifts provided to operators of pharmacies, or companies that own, operate or franchise pharmacies, including their directors, officers, employees or agents.

6. Revoked: O. Reg. 558/06, s. 4 (3).

7. Packaging costs and delivery services in respect of a prescription and dispensing fees.

8. Taxes.

9. Inventory costs.

10. Fees or penalties for inventory adjustments.

11. Purchases of sales and prescription-related data.

12. Fees for listing products in inventory.

13. Renovations, leasehold improvements and similar matters, except as directly related to a private counselling area mentioned in paragraph 7 of the definition of “professional allowance” in subsection 2 (1) of the regulation.

14. Store fixtures.

15. Real estate purchases or sales, encumbrances, leases or rent.

Professional allowances are to be calculated based on the following criteria:

1. Reasonable costs to provide direct patient care as set out in paragraphs 1 to 8 of the definition of “professional allowance” in subsection 2 (1) of the regulation.

2. Reasonable frequency of providing direct patient care as set out in paragraphs 1 to 8 of the definition of “professional allowance” in subsection 2 (1) of the regulation.

3. A reasonable number of patients per pharmacy.

Manufacturers’ Representatives

Manufacturers’ representatives shall conduct business ethically and in a manner that is in the best interest of patients.

Any information provided by manufacturers’ representatives, whether written or oral, must be full, factual and without misrepresentation.

Manufacturers shall be held responsible for the behaviour of their representatives.

Pharmacy Representatives

Pharmacy representatives shall conduct business ethically and in a manner that is in the best interest of their patients.

Pharmacies must not make procurement and purchasing decisions based solely on the provision of professional allowances.

Reporting

Manufacturers will report to the executive officer the amount of professional allowance paid to each operator of a pharmacy, or company that owns, operates or franchises pharmacies, including their directors, officers, employees or agents, in as much detail as is required by the executive officer and at times required by the executive officer. The report must be signed by two officers of the manufacturer or by the manufacturer’s auditors, as may be required by the executive officer.

Note: On April 1, 2013, Schedule 1 is revoked. See: O. Reg. 221/10, ss. 6 (3), 7 (5).

O. Reg. 458/06, s. 6; O. Reg. 558/06, s. 4; O. Reg. 221/10, s. 6 (1, 2).