The Impact of Québec’s Bill 92 on Arrangements between Manufacturers and Pharmacies, and Patient Support

On December 6, 2016 the Québec National Assembly passed Bill 92, "An Act to extend the powers of the Régie de l’assurance maladie du Québec, regulate commercial practices relating to prescription drugs and protect access to voluntary termination of pregnancy services."

In order to better oversee the various areas under the Régie de l’Assurance Maladie du Québec (RAMQ) Bill 92 has increased the RAMQ’s capacities. Bill 92 includes prohibitions on commercial practices between drug manufacturers, wholesalers, pharmacies, and manufacturers' ability to offer financial assistance or reimbursement to patients. Concerning products on the RAMQ List of Medications, the bill contains restrictions to the reimbursement of drug costs by a manufacturer and to possible permissible contractual arrangements made between a manufacturer, wholesaler and a pharmacy. Most of the provisions of Bill 92 are now in force, with some important exceptions.

What You Need To Know

  • Manufacturers and wholesalers are barred from paying or reimbursing (in whole or in part) the price of listed drug products on behalf of a patient, with an exception for "humanitarian" supply. This provision will come into force along with a regulation that will set out the criteria to qualify for the exception of a humanitarian reason.
  • Manufacturers, wholesalers and pharmacies have new restrictions on exclusivity or preferred arrangements regarding the purchase of listed drugs.
  • Bill 92 permits RAMQ to delist a drug product in several circumstances, including if
    • a manufacturer fails to comply with its obligations under regulation or in an agreement with the ministry,
    • a competing drug becomes subject to a listing agreement with the ministry, or
    • delisting is recommended by the Institut national d’excellence en santé et en services sociaux (INESSS).

Loyalty Cards and Patient Support

Under Bill 92, manufacturers are unable to pay/reimburse all or a portion of the price of a drug that is covered by the provincial health plan. Accordingly, the provision would prohibit brand loyalty cards where a patient is dispensed a brand product and the manufacturer pays the difference in cost between the brand and generic product. The manufacturer would also be unable to provide co-pay assistance, bridge funding or other financial support. The provision would be subject to exception for "humanitarian" reasons which will be set out in a regulation to the Act. These prohibitions will come into force on the date that the "humanitarian" regulations are put into place. The government has not provided an indication of when this regulation may be enacted.

Commercial Arrangements

Under Bill 92, certain commercial arrangements between manufacturers, wholesalers and pharmacies are prohibited, including the following:

  • A manufacturer cannot require that a pharmacist buy drugs exclusively from the manufacturer, nor can they directly or indirectly encourage or require a pharmacist to sell a particular brand of drug preferentially
  • Manufacturers cannot directly or indirectly grant to or receive from a pharmacist any advantages relating to the sale of drugs, except as authorized by regulation. For example, authorized benefits/professional allowances that are allowed under existing Québec laws would continue to be permitted.

These prohibitions could impact preferred provider agreements or specialized distribution arrangements in Québec.

Delisting of Drugs

Bill 92 permits RAMQ to delist a drug from the List of Medications in the following circumstances:

  1. The manufacturer fails to comply with a condition or commitment prescribed by regulation, a provision of a listing agreement or contract entered into following a call for tenders.
  2. The selling price guaranteed by the manufacturer is higher than the maximum amount payable by the basic drug insurance plan.
  3. A competing drug is the subject of a listing agreement.
  4. Either the l'Institut national d'excellence en santé et en services sociaux (INESSS) recommends or the Minister considers it in the public interest to do so.

The provisions are important for innovative manufacturers to keep in mind when negotiating a product listing agreement, as RAMQ will assert that it has the power to delist a drug if a lower cost alternative becomes available.

Pharmacist Obligations

To support drug pricing transparency, as of September 15, 2017, pharmacists will have the obligation to provide greater disclosure to patients regarding fees relating to drug dispensing. A patient must be given a receipt that separately specifies the price of the drug, the amount that is covered by the public drug insurance plan, the wholesaler’s margin, the pharmacist’s professional fees, and the amount that must be paid by the patient.

Increased Enforcement Powers

Under the new legislation, RAMQ has enhanced enforcement powers with respect to the collection of unlawful rebates paid by .drug manufacturers and wholesalers to pharmacies. Once the enforcement provisions come into force on March 7, 2017, RAMQ will also have the authority to demand a further administrative monetary penalty of 15% of the amount of any such rebate. The fines for a drug manufacturer’s or wholesaler’s non-compliance with the new regulations can be up to $1 million and can be doubled for repeated offences.

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

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2017 by Torys LLP.
All rights reserved.

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