Changes to Ontario and Federal drug oversight address regulatory gaps

July 25, 2013 | Kathryn M. Frelick, Alissa Raphael, Jesstina McFadden

In response to issues raised about the safety and quality of the chemotherapy drug supply, the Ontario and federal governments have taken a number of steps to address regulatory oversight of certain drug related activities.

The Ontario government has enacted changes to the regulations under the Public Hospitals Act (“PHA”) and the Pharmacy Act, 1991 to strengthen its oversight of drug compounding and drug supply in the province.  Specifically, amendments to Ontario Regulation 965 under the PHA (“Regulation 965”) that come into force on September 12, 2013 will specify how hospitals purchase, or otherwise obtain, drugs from third party suppliers. New regulations under the Pharmacy Act came into effect on May 15, 2013 and provide for oversight of drug preparation premises where pharmacists and pharmacy technicians engage in or supervise drug preparation activity.

At the federal level, Health Canada’s Interim Regulatory Oversight of Admixing and Compounding Statement, released April 19, 2013, provides direction to organizations involved in the compounding and admixing of medications while federal and provincial/ territorial authorities look at long-term oversight of these activities.  Specifically, it provides that compounding and admixing activities can continue:  1. if they are done within a provincially regulated hospital; 2. if they are done outside a hospital, as a service under the supervision of a provincially licenced pharmacist; or 3. if they are done in a manner that meets the licencing and manufacturing requirements of the federal Food and Drugs Act.

Amendments to Regulation 965

Regulation 965 is amended by the addition of section 10.1, entitled “Obtaining Drugs”. As of September 12, 2013, no hospital shall, either directly or indirectly, purchase or otherwise obtain a drug except from prescribed suppliers. The purpose of this amendment is to ensure that hospitals only purchase, or otherwise obtain, drugs from accredited, licensed or otherwise approved suppliers that meet prescribed regulatory standards (“prescribed suppliers”), thereby ensuring a level of quality and government oversight that was previously absent.

Prescribed suppliers include:

  • An accredited pharmacy under the Drug and Pharmacies Regulation Act (Ontario)
  • An accredited pharmacy in another Canadian jurisdiction
  • The provincial or federal government
  • Another hospital
  • A “drug preparation premises” that passed its latest inspection by the Ontario College of Pharmacists
  • A person conducting a clinical trial or named in a letter of authorization under the Food and Drugs Act (Canada)
  • A patient who supplies their own drugs
  • A person (i.e., a wholesaler) who purchases a drug from a regulated entity and has not reconstituted, diluted, or otherwise prepared the drug or combined it with another substance
  • A corporation that procures goods or services on behalf of a hospital and has procured the drugs from a regulated entity

The Minister of Health and Long-term Care also has the authority to approve additional prescribed suppliers.

In short, hospitals will be required to make relevant inquiries, particularly with their third party suppliers, and confirm that all drugs have originated from an approved supplier.

Amendments to Regulation 202/94 under the Pharmacy Act

A related amendment was made to Regulation 202/94 under the Ontario Pharmacy Act. The amendment created Part IX “Inspection of Drug Preparation Premises”, which permits the Ontario College of Pharmacists (the “College”) to inspect all “drug preparation premises”.

The Regulation defines a “drug preparation premises” as any place where a pharmacist or pharmacy technician engage in or supervise drug preparation activities (i.e., reconstituting, diluting, combining, admixing or mixing substances with a drug without a prescription for distribution/sale). The Regulation is clear that a drug preparation premises does not include a pharmacy accredited by the College, a facility that operates under a federal drug establishment license, or a hospital.

The amendments give College appointed inspectors broad investigative powers regarding drug preparation premises including: entry and access to any drug preparation premises; the right to inspect, examine or test equipment, make inquiries and examine and copy records relevant to the member’s practice with respect to drug preparation activities or the premises and the right to observe a member in his or her practice.

The amendments also require a drug preparation premises to submit to and pass a College inspection every five years, or more often, where the College deems it necessary. After an inspection, the College will issue a written report with a grade (pass/ pass with conditions/ fail). A member of the College is prohibited from engaging in or supervising drug preparation activities at a drug preparation premises that receives a failing grade. Any supervision and drug preparation activities at a drug preparation premises that passes an inspection “with conditions” must be done in accordance with the conditions set out in the written report. These amendments recognize that drug preparation activities are not restricted to “traditionally” regulated entities and are more widespread than previously thought.

Practical Implications

There are a number of review processes currently underway.  The provincial government appointed a pharmacy expert to conduct an independent review of Ontario’s cancer drug supply chain.  The expert’s report is expected to be released this month.  

It is also expected that there will be changes forthcoming as the provinces/territories work with Health Canada to develop a long-term solution to address issues of regulatory oversight.  For example, while Health Canada’s Policy on Manufacturing and Compounding Drug Products in Canada addresses federal and provincial oversight responsibilities, there may be activities that are not captured by this Policy.  In a rapidly evolving industry, it is not always clear where oversight lies. 

In terms of the regulatory amendments made to date, these changes have broad implications for health industry clients, both in terms of those entities supplying drugs to hospitals and/or engaging in drug preparation activities, as well as hospitals purchasing those drugs. 

Hospitals will need to make reasonable inquiries, and suppliers will need to demonstrate that any drugs supplied to patients come from a prescribed supplier.  From a risk-management perspective, hospitals will want to ensure that prescribed suppliers provide proof that they are qualified and accredited and are in compliance with any regulatory obligations, including inspection requirements.

Hospitals should also establish clear protocols for purchasing or otherwise obtaining drugs so they can demonstrate that they meet their obligations regarding section 10.1 of Regulation 965 and that suppliers are subject to proper regulatory oversight for drug preparation activities.

We will continue to monitor and provide commentary on any updates as they become available.


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