Proposed Regulation Amendments to Establish a Pricing Framework for Generic Products
An Ontario Public Drug Programs Executive Officer Communication published on November 5, 2014 invites stakeholder comments on proposed amendments to O. Reg. 201/96 under the Ontario Drug Benefit Act. The proposed amendments would establish a pricing framework for certain generic drug products approved for listing on the Ontario Drug Benefit (ODB) Formulary/Comparative Drug Index. The pan-Canadian framework, part of ongoing Health Care Innovation Working Group (HCIWG) efforts to reduce the cost of generic drugs, was developed through ongoing discussions with provinces and territories and in response to a Canadian Generic Pharmaceutical Association (CGPA) proposal for a tiered pricing model.
The current pricing framework in Ontario requires manufacturers to set generic prices at 25% of the brand reference product for solid dosage forms (e.g., tablets, capsules) and 35% for non-solid dosage forms (e.g., solutions, creams). A number of provisions in the regulations allow the Executive Officer to consider exemptions to the 25/35% price requirements.
The proposed regulations would establish a pricing framework for some generic products (those listed on or after April 1, 2013 and for which there are only one or two generic products available). Single source generic prices would be set at 75% of the brand reference product or 85% if the province does not have a listing agreement for the brand reference product. The price of the generic product that is set at 75/85% may be reviewed by the Executive Officer 120 days before the second anniversary date of listing. Where two generic products are available, the price would be set at 50% of the brand reference product. If there are three or more generic products, the current 25/35% price rules will apply.
The proposed framework is not intended to impact a large number of generic product listings and the provinces and territories will be monitoring the impact of these changes as part of the three year reassessment.
The proposed regulation would also include provisions to address potential price increases for older generic products in Ontario. For single and dual source generic products listed prior to 2006, the brand reference price may be adjusted based on CPI to a maximum of 10 years, for the purpose of adjusting the highest reference price for older generic products.
Comments will be accepted from interested parties on or before December 21, 2014 at 5:00 p.m. EST.
For more information regarding the proposed amendments, and how to submit comments, please see the Executive Officer Communication on the OPDP website.