Proposed changes to Ontario drug rules target generics pricing, biosimilar listing process
Ontario has proposed amendments to provincial drug regulations that aim to change the pricing model for generic drugs and simplify the process for the province’s drug formulary to list biosimilars.
Ontario’s Ministry of Health and Long-Term Care said the changes are aimed at reducing the “administrative burden” for drug manufacturers and pharmacies.
With regards to generic drug pricing rules, the current pricing model, created by the pan-Canadian Pharmaceutical Alliance, is tiered based on the number of competitors in the market. Generic prices begin at 75 or 85 per cent of the brand price for the first entrant and decrease as more generics are introduced. The proposals would permit generic manufacturers to automatically adjust their prices as their price tier changes, rather than requiring them to apply for an adjustment, which the ministry expects will lower generic prices nationally.
Read: Generic drug deal hailed for price cuts of up to 40% for public, private plans
The proposals would also speed up the biosimilar listing process by no longer requiring manufacturers to provide scientific evidence of clinical similarity between the biosimilar and its originator product, since Health Canada makes that assessment before approving the drug.
“It is not necessary for Ontario to re-review the same scientific evidence,” the ministry said in a document explaining the proposed changes. “[The change] would reduce submission requirements so that biosimilars would be funded more quickly to create fiscal space for new drug products.”
Ontario’s proposal comes on the heels of a similar adjustment by the Canadian Agency for Drugs and Technologies in Health in May 2019 to stop its reviews of biosimilars on the grounds that it could delay patient access to new biosimilar treatments. It also precedes British Columbia’s Nov. 25 deadline to transfer all patients using biologics for select illnesses to transition to biosimilars as part of its expanded biosimilars initiative.
The proposed changes would also permit generic manufacturers to offer larger prescribed discounts to wholesalers and pharmacies. Ontario prohibits drug manufacturers from offering “rebates” to either, but makes exceptions for discounts of 10 per cent of the value of the generic drug’s price in the Ontario formulary, known as “ordinary commercial terms.” The changes would increase the discount to a cap of 25 per cent, bringing Ontario’s policies closer to other Canadian jurisdictions. Ontario and Quebec are the only provinces to prevent rebates or professional allowances.
Read: B.C. government says expanding biosimilars will save nearly $100 million over three years