New Rules to Manage Drug and Device Shortages

Summary#

These final regulations — Regulations Amending Certain Regulations Concerning Drugs and Medical Devices (Shortages): SOR/2021-199 — give Health Canada new, lasting tools to monitor and respond when drugs or medical devices run short in Canada. They create formal rules for temporarily allowing certain foreign-made products into Canada, require reporting of some medical-device shortages, let the minister request information about shortages, and limit some exports that could worsen Canadian shortages. Parts came into force on November 27, 2021 and on March 1, 2022.

What it does#

• Adds a formal exceptional-importation system so the Minister can allow the import and sale in Canada of specified foreign drugs or medical devices that don’t fully meet Canadian rules but are made to comparable standards.
  • Importers must notify Health Canada in advance: three business days for drugs and five business days for medical devices.
  • Products on those lists can be sold in Canada only until the dates or limits set on the lists (for devices, until expiry or two years after a final import date).
• Creates a mandatory shortage-reporting requirement for certain medical devices (those listed on a government “notification of shortages” list). Reports must be sent within five business days when a shortage is known or anticipated, with fast updates if details change.
• Gives the Minister the power to request (and require) information from manufacturers, importers, distributors, or licence-holders when there are reasonable grounds to believe a shortage or risk of shortage exists and the information won’t be provided voluntarily. Responses must be electronic and timely.
• Prohibits holders of drug establishment licences from distributing certain drugs intended for the Canadian market for use outside Canada if that export would cause or worsen a shortage; licence-holders must keep a record of their export decision for at least one year after the product’s expiry date.
• Keeps temporary COVID-related flexibilities for a limited time:
  • Allows continued use and sale of some biocides and special-purpose foods imported under earlier interim orders until specified exhaustion or cut-off dates.
  • Lets parties conducting licensable activities for drug-based hand sanitizers continue until Health Canada decides their licence application, they withdraw it, or until September 1, 2023.
• Makes a technical change to the Certificate of Supplementary Protection Regulations to clarify that limited, exceptional authorizations to sell (under the new import rules) do not count as full authorizations for supplementary protection.

Who's affected#

• Health Canada (will run the lists, receive reports, and use the new information powers).
• Manufacturers, importers and distributors of drugs and medical devices — especially those holding or needing an establishment licence.
• Hospitals, pharmacies and health-care practitioners who may receive and use exceptionally imported products.
• Patients who rely on drugs or devices that are in shortage.
• Companies considering exporting drugs intended for the Canadian market (they may need to check and keep records showing exports won’t worsen shortages).
  If a product is on one of the government lists, the parties involved with that product are very likely to be affected; otherwise the impact is limited.

Why it matters#

• These rules permanently bring into the regulations many tools that were used temporarily during COVID-19. That means Health Canada can act faster and more predictably when shortages threaten patient care.
• The exceptional-importation framework can give hospitals and pharmacies quicker access to substitute drugs or devices when Canadian supplies run out. That can prevent treatment delays, forced substitutions, or rationing.
• Mandatory reporting for certain medical-device shortages and the power to compel information aim to improve the government’s visibility into supply problems so action (or warnings) can happen earlier.
• Limiting exports that would worsen Canadian shortages helps protect domestic supply when foreign bulk-import programs or other pressures risk draining stock.
• Health Canada estimated quantified benefits of about $63,392,000 per year (net present value $445,241,000 over 10 years) and total costs to stakeholders of about $872,200 per year. These are the department’s estimates and are summarized in the regulatory analysis.