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Bulletin

Canada Moves to Protect its Supply of Medications and COVID-19 Protective Equipment

Fasken
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Overview

Life Sciences Bulletin

On September 1, 2021, the Government of Canada published amendments to help address the shortage of drugs and medical devices in Canada. In particular, the Regulations Amending Certain Regulations Concerning Drugs and Medical Devices (Shortages) amend the Food and Drug Regulations and Medical Devices Regulations (the “Amendments”).

The Amendments extend and modify certain measures already in place through two interim orders (IOs): the Interim Order Respecting Drug Shortages (Safeguarding the Drug Supply) and Interim Order No. 2 Respecting Drugs, Medical Devices, and Foods for a Special Dietary Purpose. They have been made with the stated intention to help track, prevent and mitigate shortages of key health products in Canada, including drugs and medical devices.

The IOs were notably intended to respond to shortages caused or worsened by the COVID-19 pandemic. The Amendments were introduced to preserve powers from the IOs that are still needed to address future shortages, as such they will come into force in a manner that prevents these powers from lapsing when the IOs expire.

These Amendments notably prohibit the distribution of drugs intended for the Canadian market outside of Canada if that sale could cause or worsen a shortage. The prohibition applies to drug establishment licence (DEL) holders (e.g. manufacturers, wholesalers and distributors). A sale is only permitted if the DEL holder has reasonable grounds to believe that it will not cause or worsen a drug shortage.

The Amendments also require that medical devices manufacturers and importers of Class I devices report any anticipated shortage of devices included in the List of Medical Devices – Notification of Shortages. Any discontinuance of a specified medical device that is likely to cause a shortage must also be reported. It should be noted that personal protective equipment tools are generally classified as Class I. The demand for these products has considerably increased since the COVID-19 global crisis. With the Amendments, Health Canada hopes to anticipate and prevent or mitigate potential shortages.

New Provisions Coming into Force

On November 27, 2021, two provisions will come into force that:

  1. prohibit the distribution of drugs destined for the Canadian market outside Canada that could cause or aggravate a shortage; and
  2. allow the Minister of Health to require information relating to drug and device shortages.  The Minister uses this information to assess the level of risk for the drug or device that may be experiencing a shortage and then make a decision on measures that may prevent or alleviate the shortage.

On March 1, 2022, five provisions will come into force concerning:

  1. the exceptional import and sale of drugs and medical devices,
  2. the continued sale of exceptionally imported foods for special dietary purposes and biocides for an additional period of time,
  3. amending the Certificates of Supplementary Protection Regulations,
  4. mandatory reporting of listed medical device shortages and the power to require information on medical device shortages, and
  5. the extension of relaxations related to establishment licenses for certain drug-based hand sanitizers.

Impact on the U.S. Market

The IOs may be viewed as a response to U.S. efforts to import Canadian drugs to help reduce U.S. drugs costs.  On July 2020, the Trump administration announced the Safe Importation Action Plan. This plan allows U.S. states, wholesalers, pharmacists and drug manufacturers to import prescription drugs from a licensed wholesaler in Canada under specified conditions.

The first objective of the Interim Order Respecting Drug Shortages (Safeguarding the Drug Supply) was meant to protect Canadians from any shortage caused by such importation. The Government of Canada’s express intention was to ‘’help safeguard the Canadian drug supply by ensuring that bulk importation frameworks, such as the one recently established by the United States, do not cause or exacerbate a drug shortage in Canada’’. [1]

Nevertheless, the Biden administration announced in May 2021, that they were not in a rush to allow states to import drugs from Canada. According to media reports, there are several issues to consider before authorizing an importation plan such as rule-making by the federal government and review by the FDA to ensure the safety of the drug imported.[2]  Accordingly, while the Amendments solidify the IO, their purpose appears to be more generally in line with helping to prevent shortages in Canada for any reason, including in the context of a pandemic.


[1] See: the Government of Canada, Explanatory note for safeguarding drug supply interim order

[2] See: the Washington Post, Biden executive order to lower drug prices

 

The authors gratefully acknowledge the contribution of Alexandra Lemelin, Summer Student

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