A-29.01, r. 2 - Regulation respecting the conditions governing the accreditation of manufacturers and wholesalers of medications

Updated to 1 September 2012

This document has official status.

chapter A-29.01, r. 2

Regulation respecting the conditions governing the accreditation of manufacturers and wholesalers of medications

Act respecting prescription drug insurance

(chapter A-29.01, s. 80).

M.O. 92-06; M.O. 2007-016, s. 6.

1. In order to be recognized by the Minister of Health and Social Services, a drug manufacturer (manufacturer of medications) shall satisfy the following requirements:

(1)  he must manufacture, produce, import or sell drugs under his name or under a trademark;

(2)  he must agree to be bound by the commitment in Schedule I and sign that commitment;

(3)  (paragraph revoked).

M.O. 92-06, s. 1; M.O. 99-04-28, s. 1.

2. In order to be recognized by the Minister, a drug wholesaler (wholesaler who distributes medications) shall satisfy the following requirements:

(1)  he must distribute drugs in the list drawn up under section 60 of the Act respecting prescription drug insurance (chapter A-29.01), acting as an intermediary between drug manufacturers and pharmacists;

(2)  he must agree to be bound by the commitment in Schedule II and sign that commitment;

(3)  he must hold a permit or licence issued under subsection 55(1) of the Controlled Drugs and Substances Act (S.C. 1996, c. 19) and be an authorized distributor holding a permit for the importation, production or sale of drugs and controlled substances issued under that subsection;

(4)  he must be registered for the purposes of Part IX of the Excise Tax Act (R.S.C. 1985, c. E-15);

(5)  he must carry on activities in the drug distribution field, such as purchase and sale, receipt, storage, transport and delivery of the drugs entered on the list drawn up under section 60 of the Act, working out of premises used solely for the purposes of a wholesale business and over a period of not less than 35 hours per week divided into equal segments of time for each day from Monday through Friday;

(6)  he must maintain a drug inventory including not less than 50% of the drugs entered on the list drawn up under section 60 of the Act.

M.O. 92-06, s. 2; M.O. 96-08, s. 1; M.O. 2007-016, s. 1.

3. Where a drug manufacturer or drug wholesaler is a legal person, it shall include with its commitment a resolution by the board of directors or an attestation indicating the name of a person authorized to act on its behalf.

M.O. 92-06, s. 3.

4. (Omitted).

M.O. 92-06, s. 4.

SCHEDULE I

(s. 1)

MANUFACTURER’S COMMITMENT

1. The manufacturer undertakes to submit a guaranteed selling price per package size for any drug that he wishes to have entered on the List of medications drawn up under section 60 of the Act respecting prescription drug insurance (chapter A-29.01).

The guaranteed selling price shall be established as follows:

(1) it must be submitted for each package size of the drug, the number of package sizes being limited to 2, and the price must take into account any price granted for multiples of the package size;

(2) it may differ for sales to pharmacists or to wholesalers, but such difference may not exceed 6.25%. As of 1 April 2012, the difference may not exceed 6.50%;

(3) it must remain in force throughout the period of validity of the List of medications;

(4) it must not be higher than any selling price granted by the manufacturer for the same drug under other provincial drug insurance programs.

The guaranteed selling price is the price that a buyer must pay for a drug. It is reduced by the value of any reduction granted by the manufacturer as a rebate, discount or premium and by the value of any good or service provided without consideration to a buyer by the manufacturer, other than a benefit authorized under the Regulation respecting the benefits authorized for pharmacists (chapter A-29.01, r. 1).

The guaranteed selling price must include, in addition to the sum demanded as the price, any amount received for marketing, service, guarantee, commission, transport or delivery and any amount received in any other respect, excluding fees payable to the seller by reason of the buyer’s failure to comply with the conditions of payment provided for in the sales contract.

2. The manufacturer undertakes to respect, in his transactions with wholesalers and pharmacists, the guaranteed selling price that he submitted, and consequently he agrees to comply with the following requirements:

(1) every sale of a drug must be recorded in writing in an invoice indicating the net price paid by the buyer for each drug;

(2) the manufacturer may grant a discount for a payment made within 30 days following the purchase, provided that the discount does not exceed 2% of the net price;

(3) no reduction in the price of the drug may be applied to other merchandise;

(4) no reduction in the price of a drug may be granted to a buyer or an intermediary, including a wholesaler, a commercial name or a chain of pharmacies for the attainment of a fixed purchase volume for a given period, and no good or service may be provided without consideration or reduction as a rebate, discount or premium, other than a benefit authorized within the meaning of the Regulation respecting the benefits authorized for pharmacists (chapter A-29.01, r. 1), or a professional allowance for an owner pharmacist who deals through a wholesaler, a commercial name or a chain of pharmacies that is paid in whole to the owner pharmacist, and other than a discount referred to in paragraph 2;

(5) (paragraph revoked);

(6) upon the sale of a drug, no term of payment greater than 90 days may be granted to a pharmacist, even in the case of a consignment; notwithstanding the foregoing, in the case of a sale of drugs to a wholesaler, the manufacturer may grant a term of payment of up to 120 days.

2.1. The manufacturer undertakes to reimburse to the Board an amount corresponding to the value of any reduction as a rebate, discount or premium, of any good, service or gratuity or of any other benefit granted to an owner pharmacist that is not a benefit authorized within the meaning of the Regulation respecting the benefits authorized for pharmacists (chapter A-29.01, r. 1) or a discount referred to in paragraph 2 of section 2. The manufacturer also undertakes to pay to the Board a sum corresponding to 20% of that amount as administrative expenses.

2.2. The generic drug manufacturer undertakes to send the Board an annual report on or before 1 March for the preceding calendar year giving the detail of the reductions as rebates, discounts or premiums, the gratuities, goods, services or any other benefit, other than the discount referred to in paragraph 2 of section 2, granted by the manufacturer to each owner pharmacist in Québec. The report must also state the value of all the sales of generic drugs on the List of medications that are sold directly to owner pharmacists or indirectly through wholesalers, a commercial name or a chain of pharmacies, under the basic prescription drug insurance plan. If a pharmacist owns more than one establishment, the data must be detailed by establishment. If a pharmacy is owned by a partnership of pharmacists or a joint-stock company, the data must be detailed by partnership or company and, where applicable, by establishment.

The manufacturer agrees to the Board sending the report to the Ministère de la Santé et des Services sociaux, the Institut national d’excellence en santé et en services sociaux and the Agence du revenu du Québec. The manufacturer also undertakes to provide that department, that body and that agence, on request, and the Board with all additional information they may require in relation to the content of the report.

3.  (Revoked).

4.  The manufacturer undertakes to forward to the Institut national d’excellence en santé et en services sociaux the following information for each of the drugs he wishes to have entered on the List of medications:

(1) any information of a pharmacotherapeutic nature required by the Institut national d’excellence en santé et en services sociaux;

(2) the identification number of the drug assigned by the Health Protection Branch, Health Canada;

(3) its trademark;

(4) its form;

(5) its strength;

(6) its available package sizes;

(7) the guaranteed selling price for the next period of validity of the List of medications for each package size of the drug.

5. The manufacturer undertakes to forward to the Board, not later than 1 September for the period from 1 January to 30 June of the same year and not later than 1 March of the following year for the period from 1 July to 31 December, the following statistics on his sales of drugs by product and by package size;

(1) the number of package sizes sold to Québec wholesalers;

(2) the number of package sizes sold to Québec pharmacists;

(3) the amount of sales to Québec wholesalers;

(4) the amount of sales to Québec pharmacists;

(5) the weighted average price represented by the ratio of the aggregate amount of sales to the number of package sizes sold.

6. The manufacturer undertakes to furnish to the Board any other information that it may require regarding the selling price of his drugs under section 58 of the Act.

7. The manufacturer may terminate this commitment by means of 60 days’ notice in writing forwarded to the Minister.

IN WITNESS WHEREOF, THE MANUFACTURER, by his duly authorized representative, has signed at ______________________________, on ______________________________ 20__________

__________(Name of manufacturer)__________

__________(Signature)__________

__________(Name of signatory)__________

__________(Position of signatory)__________

M.O. 92-06, Sch. I; M.O. 96-08, s. 2; M.O. 99-04-28, s. 2; M.O. 2007-016, ss. 2, 3 and 4; M.O. 2008-001, s. 1; S.Q. 2010, c. 15, ss. 89 and 90; M.O. 2011-006, s. 1.

SCHEDULE II

(s. 2)

WHOLESALER’S COMMITMENT

1. The wholesaler undertakes to respect, in his transactions with pharmacists, the manufactuer’s guaranteed selling price, to which is added his mark-up as established in section 2 of this commitment, and consequently he agrees to comply with the following requirements:

(1) every sale of a drug must be recorded in writing in an invoice indicating the net price paid by the buyer for each drug;

(2) a discount may be granted only for a payment made within 30 days following the purchase and such discount may not exceed 2% of the net price;

(3) no reduction in the price of the drug may be applied to other merchandise;

(4) no reduction in the price of a drug may be granted for the attainment of a fixed purchase volume for a given period;

(5) no good may be provided without consideration and no reduction as a rebate, discount or premium may be granted to a buyer;

(6) upon the sale of a drug, no term of payment greater than 90 days may be granted to a buyer, even in the case of a consignment.

2. The wholesaler undertakes, in establishing his selling price, not to increase the manufacturer’s guaranteed selling price by more than 6.25% in relation to the package size purchased. As of 1 April 2012, the increase may not exceed 6.50%.

The profit margin shall be limited to a maximum amount provided for in respect of certain medications entered on the List of medications drawn up under section 60 of the Act respecting prescription drug insurance (chapter A-29.01).

3. The wholesaler undertakes to forward to the Board, not later than 1 September for the period from 1 January to 30 June of the same year and not later than 1 March of the following year for the period from 1 July to 31 December, the following statistics on his sales of drugs by product and by package size:

(1) the number of package sizes sold to Québec pharmacists;

(2) the amount of sales to Québec pharmacists;

(3) the weighted average price represented by the ratio of the amount of sales to the number of package sizes sold.

4. The wholesaler undertakes to furnish to the Board any information that it may require regarding the price of the drugs that he offers for sale under section 58 of the Act respecting prescription drug insurance (chapter A-29.01).

5. The wholesaler may terminate his commitment by means of 60 days’ notice in writing forwarded to the Minister.

IN WITNESS WHEREOF, THE WHOLESALER, by his duly authorized representative, has signed at ______________________________, on ______________________________ 20__________

__________(Name of wholesaler)__________

__________(Signature)__________

__________(Name of signatory)__________

__________(Position of signatory)__________

M.O. 92-06, Sch. II; M.O. 96-08, s. 3; M.O. 2007-016, s. 5; M.O. 2008-001, s. 2; S.Q. 2010, c. 15, s. 90; M.O. 2011-006, s. 2.

REFERENCES

M.O. 92-06, 1992 G.O. 2, 3263

M.O. 96-08, 1996 G.O. 2, 5430

M.O. 99-04-28, 1999 G.O. 2, 1289

M.O. 2007-016, 2007 G.O. 2, 2835A

M.O. 2008-001, 2008 G.O. 2, 143

M.O. 2011-006, 2011 G.O. 2, 680

S.Q. 2010, c. 15, ss. 89 and 90

S.Q. 2010, c. 31, s. 175