Status

Schedule 4 of Bill 160 enacts the Health Sector Payment Transparency Act, 2017 (the “Act”). On December 12, 2017, the Act received Royal Assent, but has not yet been proclaimed in force.

Purpose of the Act

The purpose of the Act is to require the reporting of information related to financial relationships that exist within Ontario’s health care system. The purpose is also to enable the collection, analysis and publication of that information in order to, among other things:

  • strengthen the transparency to sustain and enhance patients’ trust in both the health care system and health care providers, and
  • allow patients to make informed decisions about their health care by providing them with access to information.

The Act is similar to the Physician Payments Sunshine Act found in the United States and is the first of its kind in Canada. The Act calls attention to the financial relationship between the medical industry (such as pharmaceutical and medical device companies) and those involved in the health care sector (individuals and organizations) – it creates a regime that requires mandatory disclosure of private sector payments to health professionals. As part of Bill 160, the Strengthening Quality and Accountability for Patients Act, 2017, the Act aims to enhance transparency, accountability, and the quality of care across the health care sector.

Requirements of the Act

The Act requires a “payor” to report to the Minister of Health and Long-Term Care (the “Minister”) information related to a “transfer of value” provided to a “recipient”, whether directly or indirectly through an intermediary. Intermediaries and affiliates may also be required to make reports, if requested by the Minister. The Act describes a payor as any of the following persons if the person provides a transfer of value to a recipient:

  1. A manufacturer that sells a medical product under the manufacturer’s own name or under a trade-mark, design, trade name or other name or mark that is owned or controlled by the manufacturer and that fabricates, produces, processes, assembles, packages or labels the product, even if those tasks are performed by someone else on the manufacturer’s behalf.
  2. A person who fabricates, produces, processes, assembles, packages or labels a medical product on behalf of a manufacturer described in #1.
  3. A wholesaler, distributor, importer or broker that promotes or facilitates the sale of a medical product.
  4. A marketing firm or person who performs activities for the purposes of marketing or promoting a medical product.
  5. A person who organizes continuing education events for members of a health profession on behalf of a manufacturer described in #1.
  6. A prescribed person or entity.

Note other relevant definitions:

  • “Transfer of value” means a transfer of value of any kind, including a payment, benefit, gift, advantage, perquisite or any other prescribed benefit.
  • “Recipient” means a prescribed person, as per the regulations, that receives a transfer of value from a payor.

The Act requires the following information to be reported:

  1. The name of the parties to the transaction.
  2. The source of the transfer of value (if requested).
  3. The parties’ respective business addresses.
  4. The date of the transfer of value.
  5. The transfer of value’s dollar value (or its approximate dollar value, if it is a non-monetary transfer of value).
  6. A description of the transfer of value (including reasons).
  7. Any other prescribed information.

The Act also requires the Minister to analyse the information that is reported for the purposes of health system research and evaluation, planning, and policy analysis. The Minister is allowed to disclose the information reported at least once in a calendar year. Furthermore, the Act establishes a framework for inspections and other compliance mechanisms.

Draft Regulations

In February 2018, draft regulations under the Act were published by the Ontario Government. Details found within the draft regulations include, among other things:

  • a list of 31 persons/entities that constitute recipients, including regulated health professionals; hospitals under the Public Hospitals Act and the Private Hospitals Act; psychiatric facilities under the Mental Health Act (subject to exceptions); a not-for-profit entity that operates a family health team or community mental health and addiction services; a licensee under the Long-Term Care Homes Act, 2007; a College under the Regulated Health Professions Act, 1991; a board member, director, trustee, officer, appointee, employee, or agent of a prescribed entity within this definition; etc.
  • a list of 24 items that are considered reportable transfer of values under the Act, such as cash or cash equivalents, honoraria, compensation for services, rebates and discounts, membership fees, supplies and equipment, food and beverages, travel and accommodation, personal gifts, royalties, etc.
  • the definition of intermediary – a person or entity is deemed to be providing or facilitating a transfer of value on behalf of a payor if the transfer of value originates from the payor (irrespective of whether the payor directs how the transfer of value is to be used by the intermediary or is aware of the identities of the recipients at the time the transfer of value is provided to the intermediary)
  • the monetary threshold for reporting a transfer of value set at $10 or more, and other exceptions to reporting requirements
  • other reporting requirements related to the classification of the transfer of value
  • new entities under the definition of payor, including community pharmacies and laboratories
  • the manner and frequency of reporting – every payor must report to the Minister every year, no later than June 30 in any year after 2019 for the previous calendar year.

Penalties

Penalties will be imposed on individuals and corporations for contravening the Act for each day or part of a day on which the offence occurs or continues to occur. These will range from $10,000-$25,000 for individuals and $50,000-$100,000 for corporations. However, a defence of due diligence is applicable in cases where all reasonable steps were taken to prevent the contravention, or at the time of the contravention, the person had an honest and reasonable belief in a mistaken set of facts which, if true, would have resulted in there not being any contravention.