Improving Affordable Access to Prescription Drugs


BETWEEN: HER MAJESTY THE QUEEN IN RIGHT OF CANADA, ("Canada" or "Government of Canada") as represented by the Minister of Health ("the federal Minister")

AND: GOVERNMENT OF PRINCE EDWARD ISLAND ("PEI") as represented by the Minister of Health and Wellness ("PEI Health Minister")

Canada and PEI are also referred to individually as a "Party", or collectively as the "Parties".



  12. NOTICE


WHEREAS, on August 11, 2021, Canada and PEI agreed to targeted federal funding over four years, beginning in 2021, to add new drugs to PEI's list of covered drugs and lower out of pocket costs for drugs covered under public plans for Island residents.

Canada authorizes the federal Minister to enter into an agreement with PEI, for the purpose of improving the province's public drug plans through targeted investments.

The "Improving Affordable Access to Prescription Drugs Program" was established by the Government of Canada to provide financial support to PEI to make public drug plans more affordable for Canadians.

This Agreement respects jurisdictional roles, and in particular, recognizes that the Government of PEI is responsible for the design and delivery of publicly insured health care services in PEI, such as prescription drug coverage, with federal funding aimed at supporting PEI's work to improve its public drug plans.

THEREFORE, Canada and PEI agree as follows:


In this Agreement,

1.1 "Agreement" means this funding agreement and includes all appendices and any amendments made to this Agreement;

1.2 "Capital Cost" means any item that has an acquisition cost of $1000 or greater, and may, where applicable, include any electronic device the cost of which is under $1000 (e.g. communication device, computer equipment), acquired by PEI with funds provided under this Agreement;

1.3 "Eligible Expenditures" means the costs described in 5.6 of this Agreement that Canada has agreed to contribute to and that are incurred and paid by PEI in carrying out the Initiative;

1.4 "Evaluation" means the systematic collection and analysis of evidence on the outcomes of initiatives and programs used to make judgments about their relevance, performance and alternative ways to deliver them or to achieve the results;

1.5 "Fiscal Year" means the period commencing on April 1 of any calendar year and terminating on March 31 of the following calendar year;

1.6 "Initiative" means the activities as outlined in PEI's Implementation Plan that is described in Annex 1 to this Agreement;

1.7 "Material" means anything that is created or developed by PEI with funding under this Agreement including designs, reports, photographs, drawings, plans, specifications, documents, tools, resources, computer software, surveys, databases and Web sites;

1.8 "Performance Measurement" means the process and systems of selection, development and ongoing use of performance measures to guide decision-making; and

1.9 "Program" means Canada's Improving Affordable Access to Prescription Drugs Program.


The purpose of this Agreement is to expand PEI's public formulary and improve the affordability of its public drug plans to levels more comparable to those of other provinces and territories. Insights and lessons learned from this Initiative may be used to inform the future implementation of national pharmacare.


3.1 Objectives

PEI will work to expand its public formulary and the affordability of its public drug plans to:

  1. Enhance and improve alignment with other public drug plan formularies;
  2. Support more affordable access to prescription drugs; and,
  3. Represent an initial step toward informing the implementation of national pharmacare.

3.2 Eligible Activities

  1. Implementing changes to public drug plans to enhance coverage for residents (e.g. adding new drugs to formulary, lowering out-of-pocket costs for drugs covered under public plans);
  2. Evidence collection and research to support enhanced public drug coverage (e.g. which drugs could be added to the provincial formulary, which out-of-pocket costs could be reduced, how drug plans could be streamlined);
  3. Stakeholder engagement to inform and communicate drug plan changes;
  4. Planning, administrative and communications activities to support changes to public drug plans;
  5. Enhancing drug data analysis and collection capacity; and,
  6. Program evaluation.


4.1 This Agreement is in effect when both Canada and PEI have signed and will remain in effect until March 31, 2025, unless terminated earlier in accordance with the terms of this Agreement.

4.2 Funding will cover the period from August 11, 2021 to March 31, 2025. This Agreement covers Eligible Expenditures incurred to carry out the Initiative in accordance to the Agreement during the period beginning August 11, 2021, and ending March 31, 2025, notwithstanding the effective date of the Agreement.


5.1 Allocation to PEI

The maximum amount of funding over 4 years is $35,000,000 as follows:

Fiscal Year 2021-2022 $2,900,000
Fiscal Year 2022-2023 $10,700,000
Fiscal Year 2023-2024 $10,700,000
Fiscal Year 2024-2025 $10,700,000

5.2 Canada will make annual payments to PEI in the form of advance payments to be made in the amount outlined in section 5.1.

5.3 Where an advance payment is not fully expended in the Fiscal Year for which it was provided, Canada may consider all or part of the remaining balance of such advance as an overpayment. However, Canada may authorize PEI to retain reasonable unexpended balances of advance payments to cover expected Eligible Expenditures to be incurred by PEI during the following Fiscal Year. Unexpended funds as of March 31, 2025 may be considered an overpayment and be returned to Canada.

5.4 Adjustment

Notwithstanding any other provisions of this Agreement, Canada may withhold or reduce any payments to be made to PEI pursuant to this Agreement in the event that any report has not been submitted by PEI in accordance with the requirements of the Agreement.

5.5 Overpayments

Any overpayment, unspent advance, or disallowed expenditure shall be repayable to Canada, and until repaid, constitutes a debt due to Canada. Canada may deduct the said amount from any subsequent payments under this Agreement, or if no further payments remain to be made, or the said amount is determined after the termination or expiration of this Agreement, PEI will, unless otherwise agreed, repay the amount within thirty (30) calendar days of written notification from Canada. The repayment shall be by cheque(s), or other agreed upon method, payable to the Receiver General for Canada and shall be sent to Canada's representative identified in section 12. Interest charged on any overdue amounts will be in accordance with the Interest and Administrative Charges Regulations.

5.6 Eligible Expenditures only include the following, unless otherwise agreed to by Canada:

  1. Costs related to changes to the public drug plans (e.g. the cost of adding new drugs to formulary, and the cost of reducing out-of-pocket costs);
  2. Operating costs including salaries and benefits; rent and utilities; materials and supplies; travel and accommodation; and, contractual personnel;
  3. Capital costs;
  4. Training, professional development and support;
  5. Data development and collection to support reporting; and
  6. Information technology and related investments.

5.7 Underspending

PEI shall inform Canada in writing of any potential underspending for any given Fiscal Year on March 1 and earlier if requested.

5.8 Financial Reporting

As a condition of annual funding under this Agreement, PEI must provide Canada with a financial statement, attested to by PEI's Chief Financial Officer, by October 1 of each Fiscal Year. The financial statement must note any variances between actual expenditures and the Implementation Plan (Annex 1). The revenue section of the statement should include the total amount of funding used for each activity or service, and any unspent amount of funding that may be retained if approved by Canada.


6.1 Canada acknowledges that PEI is subject to the Freedom of Information and Protection of Privacy Act R.S.P.E.I. 1988, Cap. F-15.01 (the "FOIPP Act") and Archives and Records Act R.S.P.E.I. 1988, Cap. A-19.1.

6.2 Canada and PEI will share and release data as available and that is agreed to by the Parties in writing, and will share knowledge, research and information on effective and innovative practices in pharmaceutical systems management, to further support the development of and reporting on outcomes. The sharing and release of the data, knowledge, research and information described herein this Agreement, including section 7 of this Agreement, will be subject to what the Parties are legally permitted to share and in compliance with applicable privacy legislation, for PEI this includes the Health Information Act R.S.P.E.I. 1988, Cap. H-1.41 (the "HIA") and Freedom of Information and Privacy Act R.S.P.E.I. 1988, Cap. F-15.01 (the "FOIPP Act") and shall be consistent with PEI's policies with respect to privacy and security of data and access to information. The Parties agree that no personal health information as defined in HIA or personal information as defined in the FOIPP Act will be shared unless: a) it has been de-identified; b) a privacy impact assessment and threat and risk assessment conducted; c) and a data sharing process, outlining the type of information that is to be shared, has been established in writing between the Parties prior to the sharing of such information, and which will be detailed in the Implementation Plan described in section 7 of this Agreement.

6.3 Canada may use early lessons learned from this Initiative to inform ongoing work to advance national universal pharmacare.

6.4 PEI will continue to participate in federal/provincial/territorial discussions that include the development of a national strategy for drugs for rare diseases and the Canadian Drug Agency Transition Office.


7.1 Implementation Plan

PEI will submit an Implementation Plan to Canada for approval no later than July 31, 2022. Once approved by Canada, the Implementation Plan will be annexed to this Agreement (Annex 1).

7.1.1 Subject to section 6 of this agreement, the Implementation Plan will include:

  1. A description of planned activities including rationale and how they will enhance public drug coverage for residents, which can be amended as per section 10;
  2. Expected outcomes and a plan to collect data and measure progress on the identified activities and outcomes, including baselines, targets, and measures for appropriate data collection as well as associated GBA+ considerations;
  3. A plan to compile and share key learnings to help inform future decisions on the implementation of national pharmacare; and,
  4. An expenditure plan for the period of the Agreement, which includes a breakdown of how funding in section 5 will be allocated annually for each activity.

7.2 Evaluation

Responsibility for Evaluation of programs rests with PEI in accordance with its own Evaluation policies and practices.


8.1 Canada and PEI agree on the importance of communicating with the public about the objectives of this Agreement in an open, transparent, effective and proactive manner through appropriate public information activities. Canada and PEI agree to coordinate their efforts on public communications related to this Agreement to ensure consistency in messaging.

8.2 Canada and PEI will each receive the appropriate credit and visibility when investments financed through funds granted under this Agreement are announced to the public.

8.3 PEI may conduct public communications, announcements, events, outreach and promotional activities about the Agreement and give Canada 10 days advance notice and advance copies of public communications related to this Agreement, and results of the investments of this Agreement.

8.4 Canada may conduct public communications, announcements, events, outreach and promotional activities about the Agreement and give PEI 10 days advance notice and advance copies of public communications related to this Agreement, and results of the investments of this Agreement.

8.5 Canada will post this Agreement on a Government of Canada website.


9.1 Canada and PEI are committed to working collaboratively and avoiding disputes through government-to-government information exchange, advance notice, early consultation, and discussion, clarification, and resolution of issues, as they arise.

9.2 Canada and PEI will endeavour to resolve disputes bilaterally between the Assistant Deputy Minister representative for Canada and the Director of Pharmacy for the Department of Health and Wellness representative for PEI.

9.3 If a dispute cannot be resolved under section 9.2, then the dispute will be referred to the Deputy Ministers of Canada and PEI responsible for health, and if it cannot be resolved by them, then the Health Minister of Canada and PEI's Minister of Health and Wellness will endeavour to resolve the dispute.


10.1 Amendments to this Agreement must be in writing and signed by the federal Health Minister and PEI's Minister of Health and Wellness.

10.2 Amendments to the Implementation Plan must be in writing and signed by an Assistant Deputy Minister or Deputy Minister of Canada and PEI.


11.1 This Agreement may be terminated by either Party by providing six (6) months written notice.

11.2 Canada has no obligation to make payments to PEI after the date of effective termination under section 11.1.


The address for notice or communication to Canada:

Health Canada
70 Colombine Driveway
Brooke Claxton Building
Ottawa, Ontario
K1A 0K9


The address for notice or communication to PEI:

PEI Department of Health and Wellness
105 Rochford Street
PO Box 2000
Charlottetown, PEI
C1A 7N8



13.1 No member of the House of Commons or of the Senate of Canada or of the Legislature of PEI shall be admitted to any share or part of this Agreement, or to any benefit arising from it that is not otherwise available to the general public.

13.2 If a provision of this Agreement that is not a fundamental term is found by a court to be or to have become invalid or unenforceable, in whole or in part, it will be severed and deleted from this Agreement, but all the other provisions of this Agreement will continue to be valid and enforceable.

13.3 This Agreement shall be interpreted and applied in accordance with the laws of Canada and laws of Prince Edward Island.

13.4 This Agreement, including Annex 1, constitutes and expresses the entire agreement of the Parties hereto and any amendment or addition thereto shall be by mutual consent, in accordance with the terms of this Agreement.

13.5 The headings are inserted in this Agreement for reference only and shall not form part of the Agreement.

13.6 The provisions of this Agreement which, by their terms, are intended to survive or which must survive in order to give effect to continuing obligations of the Parties, shall survive the termination or expiry of this Agreement.


14.1 Any Material created or developed by PEI or other entity with whom PEI has collaborated with in carrying out its obligations under this Agreement shall vest in and remain the property of PEI or other entity. PEI will report to Canada what Materials, if any, have been created or developed under this Agreement and provide copies of such Materials to Canada if requested to do so.

14.2 Canada will review the list of Materials provided by PEI pursuant to section 14.1 for the purpose of determining if Canada wishes to seek permission to use any such Materials, and agreement in writing from PEI will be required prior to Canada making information in the Materials available to the public.


15.1 Personal and confidential information

PEI will develop, maintain and ensure compliance with policies relating to the protection of personal and confidential information. The policies must include a privacy impact assessment and a privacy audit of the implementation of the Initiative, where personal and confidential information is collected, used or disclosed. These policies will be made public.

15.2 Disclosure

For greater certainty and to ensure openness and transparency, information and records which each Party agrees may be released to the public, subject to section 6.2, shall include the following:

15.2.1 this Agreement and any amendments thereto;

15.2.2 any financial, activity or evaluation reports required to be submitted to Canada under this Agreement; and

15.2.3 any report arising from any audit conducted under this Agreement.


During and following the expiration of this Agreement, PEI shall indemnify and save harmless Canada and its employees and agents from and against all claims, losses, damages, costs, expenditures, including solicitor/client fees, administrative fees and disbursements, actions, and any other proceedings made, sustained, brought, prosecuted, threatened to be brought, or prosecuted in any manner based on, occasioned by, or attributable to any environmental effect, injury to or death of a person, or damage to or loss of property, arising directly or indirectly from any act, omission or delay on the part of PEI or its employees, servants, agents, or voluntary workers in carrying out the Initiative, except that Canada shall not claim indemnification under this section to the extent that the injury, loss, or damage has been caused by Canada or its employees or agents.

Signed on behalf of Canada by the Minister of Health at Ottawa, Ontario, this 16th day of March, 2022.

The Honorable Yves Duclos, Minister of Health

Signed on behalf of PEI by the Minister of Health and Wellness at Charlottetown, Prince Edward Island, this 11th day of March, 2022.

The Honorable Ernie Hudson, Minister of Health and Wellness

Annex 1: Improving Affordable Access to Prescription Drugs in Prince Edward Island

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