Canada follows in the footsteps of the United States and many European countries with the December 2017 passage of the Strengthening Quality and Accountability for Patients Act 2017.
This legislation, which is only applicable in Ontario, will strengthen transparency by providing information about the financial relationships within the healthcare system. More specifically, it requires the collection and publication of these financial relationships with the goal of providing the public with information to enable more informed healthcare decisions, research, and planning and policy analysis. The regulation, which is open for public comment until April 6th, will come into force after the government obtains consent from the Lieutenant Governor of Ontario.
Summary of Proposed Regulations
The Act requires pharmaceutical manufacturers (brand, generic and OTC) and medical device companies and other “payors” (e.g. community pharmacies and laboratories) to disclose any transfers of value to a “recipient” that have a dollar value of $10 CAD or more.
What is a transfer of value?
Under the law, “a transfer of value” includes “a payment, benefit, gift, advantage, or other prescribed benefit.” Examples include meals, hospitality, travel expenses, fees paid for consulting on speaking events, and other benefits (including in-kind transfers of value).
Excluded from the definition are:
- Goods sold under a bill of sale or purchase agreement;
- Salary/benefits provided as a part of employment;
- Educational materials that are used for the benefit of patients (e.g. anatomical models);
- Compensation for expert testimony.
Who is a payor? Who is a recipient?
The law defines a “payor ” as any of the below persons who provide a transfer of value to a recipient, including:
- A manufacturer selling a medical product;
- A person who fabricates, produces, processes, assembles, packages or labels a medical product on behalf of a manufacturer;
- A wholesaler, distributor, importer, or broker of a medical product;
- A marketing firm or person who markets or promotes a medical product; and
- A person who organizes continuing education on behalf of a manufacturer.
A “recipient ” is defined as a “person or entity that receives a transfer of value from a payor.” The legislation has defined 23 recipients including:
- 26 defined types of HCPs;
- Hospitals, clinics, medical institutions, pharmacies and laboratories;
- Non-profits, charitable organizations and foundations;
- Physician organizations and colleges;
- Universities and research institutes;
- Advocacy groups; and
- Patient organizations.
The Act requires that payors report the below information :
- The names and addresses of the parties to the transaction (e.g., the payor, recipient, and any other intermediary),
- The source of the transfer of value if it is being reporting by an intermediary (e.g., if a speaker program vendor is reporting the speaker program fees paid to an HCP),
- The date of the transfer of value,
- The transfer of value’s dollar value or, in the case of a non-monetary transfer of value, its approximate dollar value,
- A description of the transfer of value, including the reasons for it, and
- Any other prescribed information.
This information must be reported to the Minister of Health on June 30th of each calendar year, and payors must begin data collection in January 2019. Payors will report via an electronic data collections platform maintained by the Ministry. Payors must inform recipients of each transfer of value by March 31st of each calendar year and provide 45 days for the recipient to review.
How does this affect you?
The Transparency Act is modeled after the U.S. Sunshine Act and the EFPIA reporting requirements in the EU. Like the Sunshine Act and EFPIA obligations, the Transparency Act was created with the goal of strengthening transparency by requiring companies to track and report certain payments and items of value. However, the Transparency Act’s reporting requirements go even further than the Sunshine Act and EFPIA reporting obligations. For example, “recipients” under the Transparency Act includes patient organizations and advocacy groups and “payors” includes vendors such as marketing firms or speaker program vendors. What does this mean for you? In the short term, companies will need to review their policies, processes, aggregate spend systems (with a special focus on reporting fields), training, etc. to ensure compliance with the Act. In the longer term, companies may reconsider their strategies for engaging with patient advocacy organizations in light of the Act as well as the heightened global scrutiny on such relationships. More information can be found here.
Not sure how ready your company is to deal with the upcoming changes? Take this short self-evaluation.
Then, Polaris and IQVIA can help make sure you and your team are compliant with legislation around the world. Learn more here. Schedule a conversation with Chrisoula Nikidis, our Canadian Head of Compliance and Ethics Solutions, by clicking here.