Ontario Drug Benefit Program (ODB) Audits: What Pharmacists Must Know

We regularly assist clients who are undergoing Ontario Drug Benefit Program (“ODB”) audits and investigations. 

The Ontario Drug Benefit Program is a Ministry of Health and Long-Term Care program which covers the cost of prescription medication for a number of Ontario residents, including youth, seniors, and persons who spend a high percentage of their annual income on prescription medication (Trillium Drug Benefit). 

Ontario Pharmacies can enter into an agreement with the Executive Officer appointed under the Ontario Drug Benefit Act. This Agreement allows the Pharmacy to bill ODB directly for filling eligible prescriptions. 

Under section 14 of the Ontario Drug Benefit Act, the Minister has the authority to appoint an inspector to carry out an audit of any Pharmacy who bills ODB. An inspector conducting and ODB audit may attend at the pharmacy, request pharmacy records, and ask questions of the pharmacists. An inspector may also seek to obtain information from third parties, such as order/inventory information from wholesalers and drug manufacturers. 

The purpose of an ODB audit is to determine if the Pharmacy is complying with the Ontario Drug Benefit Act and regulations, as well as the Agreement with the Executive Officer.

Specifically, an investigator carrying out an ODB audit may consider whether any claims made by the Pharmacy to ODB were an overpayment or an unsubstantiated claim. 

An overpayment is a claim submitted by the Pharmacy to ODB, and paid by ODB, in a situation where ODB was not required to make the payment. In other words, in an overpayment situation, either the patient or medication were not eligible for ODB coverage. 

An unsubstantiated claim is a claim submitted by the Pharmacy to ODB, and paid by ODB, where there are insufficient purchase inventory invoices to substantiate the claim. In other words, in an unsubstantiated claim, the Pharmacy’s records suggest that more inventory was dispensed than purchased. 

If, following an ODB audit, the Ministry is of the view that the Pharmacy breached the Act, regulations, or the Agreement, the Ministry may: 

  • Issue an Order suspending the Pharmacy’s entitlement to receive payment from ODB; 
  • Issue an Order revoking the Pharmacy’s ODB billing privileges; 
  • Issue an Order terminating the Agreement. 

A potential resolution to an ODB audit is that the Pharmacy and the Ministry enter into a remedial agreement under section 11.1(7) of the Act, which would require the Pharmacy to abide by certain conditions in exchange for being able to continue to bill ODB. 

Throughout the ODB audit process, Pharmacies are given opportunities to provide responses and explanations, including an opportunity to oppose the Ministry’s intention to recover funds from the Pharmacy or the Ministry’s intention to revoke billing privileges. 

Consequences of an adverse ODB audit can be very serious. Such consequences may include loss of ODB billing privileges, allegations of fraud, Ontario College of Pharmacists (“OCP”) complaints, investigations and discipline proceedings, and even criminal charges. Given the potential for serious adverse outcomes, those undergoing an ODB audit should obtain legal representation at the earliest opportunity.