The Cap Is Back: Québec to Reinstate Professional Allowances Cap
On July 19, the Québec government announced its intent to amend the regulation respecting benefits authorized for pharmacists to reinstate the 15% cap on professional allowances for drug products. The regulation is expected to come into effect on September 2, 2017.
What You Need To Know
- A professional allowance is a discount, rebate or other benefit granted or paid by a manufacturer to a pharmacy. The professional allowance must be used for pharmacist or patient education, or other designated activities aimed at the promotion of patient health.
- Québec and Ontario are the only two provinces that have "anti-rebate" legislation relating to the price of drug products sold by drug manufacturers to wholesalers and to pharmacies. Ontario abolished professional allowances a few years ago and has strict limits on the ability of a manufacturer to provide designated rebates to a pharmacy. Québec has continued to allow professional allowances from generic drug manufacturers to pharmacies.1
- Over the past two years, the amount of professional allowances that may be paid (as a percentage of drug product sales) has been in flux, rising incrementally from 15% up to most recently being completely uncapped. The draft regulations will reinstate the earlier 15% cap.
Conclusion
Québec's drug pricing policies have made national news over the last few months2, with the province reportedly in negotiations with the Canadian Generic Pharmaceutical Association (CGPA) on a model to save the Québec government $1.5 billion on drug costs over the next five years. This agreement follows Québec's intention to move forward with the tendering of generic drugs although the proposed tendering appears to be on hold now that the CGPA agreement is in place.
The reinstatement of the cap appears to be related to Québec's efforts to reduce its spending on drug products. Rather than providing these benefits to pharmacy owners, drug manufacturers may be inclined to offer lower prices on products, thereby reducing public spend.
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1 Innovative drug manufacturers can provide certain "authorized benefits" to pharmacies – goods and services (not in kind) relating to patient or pharmacist education and other health promotional activities.
2 For example: https://www.theglobeandmail.com/report-on-business/quebec-expects-15-billion-in-savings-with-new-drug-price-deal/article35705420/