Ontario introduces bill to promote transparency in healthcare industry

Healthcare Alert

Life Sciences Alert

  • Christopher Pejovic (Articling Student)

On September 27, 2017, Ontario’s Minister of Health and Long-Term Care, Dr. Eric Hoskins, introduced proposed legislation that aims to add transparency to certain marketing practices employed by the medical industry, in particular the provision of payments such as meals, hospitality, and financial grants from the medical industry to healthcare professionals. If passed, this legislation will be the first of its kind in Canada, and will follow similar legislation in the United States where the Physician Payments Sunshine Act has been in place since 2010.

The proposed legislation, Bill 160, will create the Health Sector Payment Transparency Act (the “Proposed Act”) with the stated goals of strengthening transparency to ensure that patients have trust in healthcare providers and the healthcare system, and providing patients with access to information to assist in making informed decisions about their healthcare. 

Reporting requirements

At the heart of the Proposed Act is the requirement of a “payor” to report to the Minister of Health various information relating to a “transfer of value” provided directly or indirectly to a “recipient”. A “transfer of value” is broadly defined to mean a transfer of value of any kind, including payments, benefits, gifts, advantages, or perquisites. The reporting requirement does not apply to a transfer of value falling below a yet-to-be-prescribed monetary threshold. A “payor” is broadly defined to include essentially any person or entity in the medical product industry (i.e., drugs or medical devices) that provides a transfer of value to a recipient, and includes: manufacturers, distributors, importers, wholesalers, and agencies that perform marketing, promotional, or continuing education programs on behalf of manufacturers. A “recipient” is any person or entity that receives a transfer of value from a payor, and will therefore include physicians, pharmacists, and any other healthcare professionals. 

Where the reporting requirement applies, the payor must disclose certain information relating to the transfer of value, including: the names of the parties to the transaction, the source of the transfer of value in the case of an intermediary, the dollar value and date of the transfer of value, and a description of the transfer of value, including the reasons for it. The information that must be disclosed may be expanded by subordinate legislation.

Enforcement and penalty for non-compliance

Once received, the Minister must analyze the information for the purposes of health system research and evaluation, planning and policy analysis. Importantly, for payors and recipients alike, the Minister must publish the information collected, including any personal information, on a website at least once per calendar year. 

The Proposed Act also provides the Minister with inspection powers, including the power to enter a premise without a warrant, if the inspector reasonably believes that a record relating to the transfer of value is located there. Significant monetary penalties are prescribed for non-compliance, which, depending on the number of previous infractions, range from $10,000 to $100,000 for each day the offence occurs or continues.

If passed, the Proposed Act will fundamentally change marketing practices in the healthcare industry in Ontario. It is important for those in the healthcare industry to remain aware of the status of the Bill and to adjust their marketing and data collection strategies accordingly if the Bill becomes law. 

For more information please contact the authors.