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Impact of ODB changes on PMPRB price reviews
The recently announced changes to the Ontario Drug Benefit Plan makes a number of changes to the rules governing pricing for drugs in the province.
The principle changes with a potential implication on the transaction price of a drug are:
- An intention to secure more competitive prices in the Ontario marketplace by entering into competitive agreements with brand manufacturers.
- The enforcement of the Drug Benefit Price to protect pharmacies from unauthorized price increases. Price increases will only be permitted in exceptional cases.
- The empowerment of the Executive Director, Drug Programs, to negotiate prices with manufacturers.
- Amendments to the Ontario Drug Benefit Act to prohibit manufacturers from selling a listed drug product at a price higher than the Drug Benefit Price and to prohibit the paying of a rebate to any portion of the trade channel.
Comment: From a PMPRB perspective, there seems to be nothing that will directly affect the operation of the Board's enforcement activities and the practices of the manufacturers. The price change feature proposed in the ODB changes would seem to be more restrictive than the price change provisions of the PMPRB. In addition, the process of negotiation of prices for branded products submitted for listing would tend to work in concert with the PMPRB's policies in moderating the prices for new drugs. The impact of price policies in respect of generic drugs would fall outside the Jurisdiction of the Board.
The unanswered questions remain:
- What is the PMPRB's view if, due to the negotiation process and the restraint on price increases, the price in Ontario were substantially different than in some other parts of the country. It is conceivable that the national price for a new or an existing product would be within guidelines on a national basis but excessive in some parts. The PMPRB has previously indicated that they would consider the price "in any market" for the purposes of determining if prices are within the Guidelines.
- How would the PMPRB deal with the competitive agreements with brand companies? How will they deal with fluctuations in the average transaction price due to changes in the agreements between the ODB and brand companies? In previous clarification, the Board indicated that its intention is not to discourage any incentive program or entering into an agreement benefiting patients, however reporting must be consistent in all periods. Will this remain the case?
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