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Health Minister Deb Matthews is pictured.Kevin Van Paassen/The Globe and Mail

Ontario is moving to authorize the provincial College of Pharmacists to inspect facilities that mix drugs, closing a regulatory loophole that may have led to more than 1,200 cancer patients receiving diluted chemotherapy treatment.

The Ministry of Health on Friday announced that it was working on a regulation that would make companies like Marchese Health Solutions, which supplied the chemotherapy drugs in question, subject to inspection by the college.

College spokeswoman Lori DeCou confirmed that her organization was "in the final stages of developing a draft regulation that will provide the college with the necessary authority in order to inspect premises where pharmacists and pharmacy technicians practice, including where drugs are prepared. To be clear, that would include Marchese Health Solutions."

The college is tasked with overseeing licensed pharmacists and pharmacies, and routinely inspects pharmacies. Health Canada regulates and inspects drug manufacturers. Marchese, which was federally incorporated and reportedly never inspected, currently falls into a jurisdictional grey area in that it is not considered a pharmacy or a drug manufacturer.

Marita Zaffiro, the president of Marchese, did not return phone and e-mail messages seeking comment on the new policy.

In prepared statements released earlier this month, Ms. Zaffiro defended the quality of the chemotherapy cocktail her company supplied, saying the mix was prepared to specifications outlined in its contracts with hospitals and suggesting that it was improperly administered to patients.

The diluted drugs were discovered by a pharmacy technician in Peterborough, Ont., who noticed that bags containing cyclophosphamide and gemcitabine were overfilled. The bags were found to contain too much saline, which effectively watered down the treatment by up to 20 per cent.

Meanwhile, Health Canada is putting in place new rules that aim to ensure "active oversight" of drug-compounding companies across the country until a long-term national solution is found.

Under the new directives, also announced Friday, companies that mix drugs may continue to operate if the compounding is done within a hospital and meets provincial regulations; under the supervision of a provincially licensed pharmacist, or "in a manner that meets the licensing and manufacturing requirements of the federal Food and Drugs Act."

The rules were a direct response to the Marchese controversy, but how they would have prevented the watered-down chemotherapy treatments in Ontario and New Brunswick was not immediately clear. Marchese, which is based at a private facility in Ontario, already operated under the supervision of a pharmacist.

Indeed, Supriya Sharma, senior medical adviser with Health Canada's Health Products and Food Branch, said during a news conference to announce the new regulations that the company "had the appropriate oversight in place."

A spokesman for federal Health Minister Leona Aglukkaq, Steve Outhouse, later called reporters to clarify that since Marchese was operating under the supervision of a pharmacist, it would be subject to inspections by the college under Health Canada's new regulations.

The federal regulations do not specifically state that operations like Marchese would be inspected. Ms. DeCou, the spokeswoman for the college, declined to comment on regulations.

Health Canada has mulled the question of jurisdictional oversight of companies that compound drugs for at least 16 years. A 2009 policy paper underscored "a need to develop a Canada-wide consistency" to regulating the companies, and recalled a 1997 workshop in which "the need for clarity across roles and jurisdiction" was highlighted.

How many unregulated companies are mixing cancer drugs is unknown to either the federal or Ontario governments.

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