As we reported, Ontario passed the Health Sector Payment Transparency Act, 2017 (Bill 160) in December 2017, which will require those defined as “payors” – such as pharmaceutical and medical device manufacturers, wholesalers and distributors – to disclose financial relationships with healthcare professionals and organizations to the government.
On February 21, 2018, the Ontario Government published a draft regulation under the Health Sector Payment Transparency Act, 2017 (“Act”). Comments on the draft regulation are due April 6, 2018.
At a high level, the draft regulation provides additional detail on the following:
- Who is a “recipient” under the Act. 31 categories of persons or entities will be considered a “recipient” of a transfer of value (“TOV”) and includes regulated healthcare professionals, hospitals, independent and community health facilities, patient and disease advocacy groups, charitable foundations, universities, various not-for-profit organizations, and individuals or immediate family members of certain designated “recipients”.
- What constitutes a reportable “transfer of value” (“TOV”). The draft regulation sets out a list of 24 items that are considered reportable TOVs under the Act, such as cash or cash equivalents, compensation for services, consulting fees, membership fees, grants and donations, honoraria, event sponsorships, membership fees, renovations, entertaining and sporting events, food, travel and accommodations, rebates and discounts, licenses and copyright fees, and personal gifts.
- The Threshold for reporting a TOV. Any TOV of $10 or more is reportable under the Act.
- Additional payors. Community pharmacies and laboratories are added to the list of payors under the Act.
- Who is an “intermediary” for the purposes of the Act. A person or entity is an “intermediary” and deemed to be facilitating a TOV on behalf of a payor if the TOV originates from the payor, whether or not the payor directs how the TOV is used or is aware of the identities of the recipients. TOVs made through intermediaries are reportable under the Act. A person or entity is not an intermediary if: (i) they are prescribed as a “recipient” under the Regulation, (ii) if the payor does not direct how the TOV will be used by that recipient and (iii) a published ethical guideline or code commonly accepted within the field would be breached if the identity of the recipient is disclosed to the payor.
- Market research firm treated as a recipient. A market research firm is deemed to be a recipient (and not an intermediary) where: (i) a manufacturer gives a payment or other TOV to the market research firm; and (ii) the firm then uses the payment as an incentive to recipients to encourage their participation in a market research study. The manufacturer must not know the identity of the recipients, and knowing the identity must cause the manufacturer to be in breach of a published ethical code or guideline. In this case, the payor must disclose the amount paid to the market research firm that is used as an incentive.
- Exceptions to the Reporting Requirement. A payor is not required to report: (i) transactions less than $10, (ii) salary and benefits provided to an employee of a payor, (iii) medical products provided to a recipient that are intended to be given to a patient free of charge (i.e., samples), (iv) educational materials intended to be used by the recipient in a clinical setting for the benefit of a patient, (v) compensation for expert witness services, and (vi) rebates provided in accordance with ordinary commercial terms and in compliance with subsection 1(11) of Ontario Regulation 201/96 made under the Ontario Drug Benefit Act.
- Manner and frequency of reporting. Reporting shall occur annually, no later than June 30 in any year beginning after 2019 (i.e., initial reporting for all TOVs in the previous calendar year will begin on June 30, 2020). Reporting will be done through an electronic data collection platform maintained by the Minister.
- Process for Disclosure and Correction of Information. The draft regulation outlines a process for disclosing and correcting information under the Payors will be required to notify each recipient no later than March 31 in any given year of the TOV they intend to disclose. The recipient must be given a minimum of 45 days to review the information. If the recipient disagrees with the TOV to be reported, they must advise the payor. The payor must then review the correction request made by the recipient and notify the recipient in writing of its decisions and reasons. If the decision is not resolved and reported to the Minister, the recipient can request that the Minister mark the information as disputed.
Draft regulation – Health Sector Payment Transparency Act, 2017