Ontario's Bill 102 will shape pharma reforms, reimbursement across Canada

In Canada, the Ontario government approved Bill 102, the Transparent Drug System for Patients Act 2006 in June and most of the new regulations will come into force on October 1. They will have very significant implications for the pharmaceutical industry across Canada in terms of drug pricing and reimbursement policies, as well as listing on the provincial formularies. The new pricing regulations for branded and generic products and most of the other aspects of the Bill are still being developed by the Ontario Drug System Secretariat.

The Bill reflects the debates on the sustainability of the drug delivery system in Canada, which has been a concern for the federal and the provincial governments for several years. In the largest province, Ontario, drug expenditure has been increasing close to 10% over recent years and, in 2004-5, the Ontario Drug Benefit Program spent C$3.5 billion ($3.15 billion) on pharmaceuticals. The Ministry of Health predicts close to 10% (C$300.0 million) savings for the drug plan as a result of the new regulations. The main aim of Bill 102 is to improve access for patients to drugs, ensure better value for money for the government, introducing transparency to the system and rewarding innovation.

Drugmakers were required to submit their updated prices for the new provincial formulary, which will be published in October. Apparently, the province will raise its drug benefit prices to the current market levels, however, manufacturers will have to provide rebates so that Ontario's drug plan's costs are not affected. In recent years, several brand name drugs were sold at a higher than the registered drug benefit price.