Québec Publishes Draft Regulation on Calls for Tenders for Provision or Supply of Medications

When it entered into force on June 10, Bill 81, titled An Act to reduce the cost of certain medications covered by the basic prescription drug insurance plan by allowing calls for tender, introduced amendments to An Act respecting prescription drug insurance through which the Québec government is given the power to issue calls for tender to supply medications sold in pharmacies. The Draft Regulation governing the mechanics of the bidding process was recently published (available here on page 18) and is now the subject of a 45-day comment period.

What You Need To Know

• Bill 81 enables Québec Minister of Health and Social Services to issue a call for tenders for the purpose of setting a price of a drug that will be covered by the public drug plan in Québec. The Draft Regulation describes the conditions and process for the call for tenders.
• The Draft Regulation provides that the Minister may conduct (i) a general call for tenders, whereby all accredited manufacturers of medications submit a price, or (ii) a fixed-price call for tenders to award a contract to one or more manufacturers
• Contracts may be awarded to a maximum of 3 manufacturers per drug (of the same form and strength) or per supply, and for a maximum duration of 3 years, including any renewals.
• The deadline to provide comments on the Draft Regulation is October 8, 2016.

Bill 81 enables the Minister to issue a call for tenders to enter into contracts with manufacturers of drugs, as well as with wholesalers, either to establish the price at which a manufacturer will sell a drug to a wholesaler, or to establish the conditions for the exclusive supply of a drug from a wholesaler to pharmacists.

The purpose of the tender process is to encourage manufacturers and wholesalers to compete and lower drug costs for patients, generate savings, reducing burden on the health care system. However, concerns have been raised that: a) the bidding process may contribute to drug shortage issues resulting from supply disruptions; b) it may lead to less competition between manufacturers and wholesalers and as such not generate the expected saving; and c) cause problems in terms of access to health care services for patients. There is also a general concern that these new rules will heavily impact the current business model in the pharmaceutical industry by eliminating the pharmacists’ right to choose their own brands.

To discuss these issues, please contact the author(s).

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