Bill 16, Creating the Foundation for Jobs and Growth Act, 2010 (the “Budget Bill”) received Royal Assent on May 18, 2010, introducing notable amendments based on measures contained within the 2010 Ontario Budget. A number of schedules contain provisions related to health legislation that impact on pharmacies, drug manufacturers and pharmaceutical wholesalers in Ontario.
Changes to Drug Regulations
As of July 1, 2010, the definition of the term “rebate” in the Drug Interchangeability and Dispensing Fee Act (“DIDFA”) and the Ontario Drug Benefit Act (“ODBA”) has been changed to eliminate the professional allowance (“PA”) exemption which previously allowed manufacturers to pay PAs to pharmacies and operators of pharmacies in Ontario. The limit on professional allowances that pharmacies may receive for private sales of “interchangeable drugs” under the DIDFA was reduced by 25 percent. For ODBA-reimbursed drugs the reduction in professional allowance limits was reduced to 15 percent; from 50 percent to 35 percent. This will eventually be completely phased out over a period of three years. A new exclusion has been inserted for benefits that are provided in accordance with ordinary commercial terms.
In addition, the prices of generic drugs under the ODBA have been reduced from 50 percent to 25 percent of the price of the brand name version. In essence, the proposed drug benefit price (“DBP”) must be less than or equal to 25 percent of the price of the original product. The provisions under the DIDFA match those under the ODBA, such that generic drugs sold on the private marked cannot be sold at a higher price than the DBP.
Changes in Mental Health Act
On May 18, 2010, the Mental Health Act was amended to add section 39.2, which sets out a process by which an involuntary person, a person on their behalf, or Officer in Charge may apply to the Consent and Capacity Board for a determination of whether the patient should be transferred to another psychiatric facility. A transfer hearing must begin within 30 days after the application is received. Where a certificate of involuntary admission or a certificate of renewal has been issued, an individual is entitled to rights advice with respect to the availability of a transfer hearing. A number of these hearings have been held since the legislation came into force.
Wage Restraints and the Public Sector
The Public Sector Compensation Restraint to Protect Public Services Act, 2010, discussed above, was also introduced under the Budget Bill.