Executives from Medbuy, the company that arranged hospitals' contracts for intravenous chemotherapy drugs, told an Ontario legislature committee that the labels on the IV bags didn't accurately describe the contents.

The executives testified Monday at Ontario's standing committee on social policy, which is looking into diluted chemotherapy treatments given to about 1,200 cancer patients in Ontario and New Brunswick.

Medbuy, a London, Ont.-based group purchasing organization, works with hospitals to reduce the cost of their health-care supplies, such as medication and surgical masks.

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Marchese Hospital Solutions and the hospitals differed in their interpretations of how the chemotherapy IV bags would be used.

Until Monday, no one from the company had spoken publicly about its role as a broker between five hospitals — including four in Ontario and one in New Brunswick — and Marchese Hospital Solutions, which won a contract to produce intravenous chemotherapy mixtures.

Last week, Marita Zaffiro, the president of Marchese Hospital Solutions, which supplied the chemotherapy drugs cyclophosphamide and gemcitabine, testified that the chemo was made according to Medbuy's contract.

The four Ontario hospitals have told members of the standing committee on social policy at Queen's Park that they used the IV bags of chemotherapy for multiple patients.

Zaffiro said her company believed each bag was intended for a single patient, so any excess saline would not result in an overdilution.

Hospitals have said that Marchese's bags were labeled with the volume and amount of drug only.

Kent Nicholson, CEO of Medbuy, and Michael Blanchard, the company's vice-president of pharmacy, testified Monday, with Blanchard saying the problem is that the bags' labels from Marchese did not accurately describe the contents.

"This particular issue could have been avoided had the label correctly indicated what was the contents of the bags. Their ability to admix is not in question," Nicholson told reporters after the hearing.

"If the label had accurately described what was in the bag, we would not have had an issue here."

Nicholson said the bags contained more gemcitabine — four grams of it — than would be given to a single patient, adding that a qualified pharmacist would know that.

Admixing is the bulk mixing or compounding of drugs for multiple patients, who may be in different locations, without individual prescriptions.

Previously, the committee heard that Medbuy bought the chemotherapy treatments from Marchese Hospital Solutions of Mississauga, which won the contract from longtime supplier Baxter in late 2011 after a public bidding process.

MPPs have been asking hospital staffers and health ministry officials about the regulatory grey zone surrounding Marchese Hospital Solutions' mixing services, which was not accredited by the Ontario College of Pharmacists.

Health Canada and the provinces and territories are working to improve oversight, including inspections of companies like Marchese Hospital Solutions that aren't federally licensed as manufacturers or provincially accredited as pharmacies, while they look for a long-term solution.

A "communication issue" at the hospitals contributed to the overdilution issue, Zaffiro said.

The communication issue is separate from the questions about federal and provincial jurisdiction.

With files from CBC's Genevieve Tomney and Melanie Glanz