Reducing Regulatory Burden for Private Label Products Proposed Regulatory Amendments to the ODBA and DIDFA
The concerns and recommendations expressed in this letter are supported by the signed companies and organizations that represent over 1,560 independently owned and operated small business pharmacies across Ontario.
We have serious concerns regarding the proposed regulatory amendments to O. REG. 201/96 (ODBA) AND REG. 935 (DIDFA) as they will result in unintended consequences that will severely impact the viability of small independent pharmacy businesses in the province.
If passed as intended without including the recommendations below, these proposed regulatory amendments will result in:
+A clear bias to certain large corporations as private label products will only offer a significant financial advantage to those large corporations that manufacture them. Such advantage will be at the expense of small independent pharmacies.
+ Significantly reducing competition in the marketplace as disadvantaged small businesses may be forced to close or sell their pharmacies to those large corporations.
+ Job losses at small independent pharmacies.
+ Limiting the number of generic manufacturers in the market, due to the lack of competitive open-market environment, thereby increasing the potential for drug shortages and impacting patient care.
+ Increasing the price of medications, as over the long term some previously multi-source molecules could eventually become dual or single source generics.
In order to keep the PC government for the people’s promise to make Ontario “open for business”, it is paramount to ensure a level playing field and allow for an equitable competitive balance between small and large pharmacy operators. Our recommendations are as follows:
- The removal of the current 10% restriction on commercial terms if private label products are to be allowed in Ontario.Given both restrictions were introduced in 2010, consideration must be given to lifting them simultaneously and not one without the other.
- Aligning Ontario with other provinces where there are no restrictions related to the business relationships between pharmacies and manufacturers.
- While other provinces currently allow for private label generics, they do not have the strict limitations on the business relationships between pharmacies and manufacturers which is a simple basic economic relationship in any retail business environment.
- Those restrictions are unnecessary red tape regulations that have been introduced in Ontario under the previous government and since then have created a significant burden on pharmacy operators.
- These restrictions are unique to Ontario and have no impact on the cost of medications for the government or taxpayers.On the other hand, those restrictions have resulted in increased drug shortages as one of the unintended consequences.
Independent community pharmacies are well poised to play a bigger role to support the government’s commitment to end hallway medicine through further expansion and adoption of scope and services.
A fair and equitable market environment is necessary to ensure a sustainable and predictable model for independent pharmacy business to positively contribute to the health care system.
Thank you for your engagement and consideration to our concerns and recommendations.
Billy Cheung, Executive Director, Pharmacy, Marketing, & Professional Affairs, Pharmasave Ontario
Sherif Guorgui, Executive Director, OnPharm-United
Calvin LeRoux and Grady Brown, Co-CEOs, PharmaChoice Canada
Jeff May, Executive Vice President and General Manager, Remedy’sRx Specialty Pharmacy
Dean Miller, President & CEO, Whole Health Pharmacy Partners
Ben Shenouda, Executive Director, Allied Pharmacists Inc. (API)
Rita Winn, COO & General Manager, Lovell Drugs