New rules to prevent drug and device shortages

Summary#

This is a proposed set of changes called Regulations Amending Certain Regulations Made Under the Food and Drugs Act (Shortages and Discontinuation of Sale of Drugs and Medical Devices) published by Health Canada on December 28, 2024. The goal is to reduce harmful drug and medical device shortages by making manufacturers, importers and wholesalers do more planning, reporting, and (for some drugs) keep extra supply in Canada. Health Canada estimates the proposal would cost industry $17.1M per year but produce monetized benefits of about $3.2B per year, with a net present-value benefit of about $22.1B over ten years.

What it does#

• Requires some drug companies to keep minimum “safety stock” in Canada. The default amount is the equivalent of three months of average monthly demand, but the government can set different amounts for specific drugs on a published list.
• Forces drug market authorization holders to prepare and keep up-to-date shortage prevention and mitigation plans for drugs that, if scarce, could cause serious harm.
• Requires importers and wholesalers to tell the Minister of Health if sales of certain drugs jump by 250% in a month compared with the same month a year earlier, and to do so within five days after that month ends.
• Expands what drugs can be covered by shortage rules by using public “lists incorporated by reference,” which lets the Minister add drugs (including some over‑the‑counter medicines) when shortages could risk health.
• Lets the Minister extend expiration dates for specific lots or batches of drugs temporarily to increase available supply (via a public list of lots with extended dates).
• Broadens and clarifies the “exceptional importation and sale” rules so foreign-authorized drugs and certain domestic lots can be used more easily during shortages, with extra safety and labelling requirements.
• Changes discontinuation reporting: companies would need to notify a planned permanent stop in sales at least 12 months in advance, or within five days if the decision is made less than 12 months ahead.
• Updates medical‑device rules to require documented procedures to monitor demand and report shortages for listed device categories, and to publish device shortage and discontinuation notices on the same third‑party website used for drug shortages.
• Phased timing if adopted: some powers would start after six months, some after one year, and the safety‑stock rule after 18 months from final publication.

Who's affected#

• Drug manufacturers and market authorization holders who sell drugs in Canada.
• Importers and wholesalers of drugs.
• Pharmacies, hospitals, and other health providers who buy and distribute drugs and listed medical devices.
• Medical device manufacturers and importers, especially those with devices on the government’s published lists.
• Health Canada and the Minister of Health, who would run new lists, review plans and reports, and enforce the rules.
• Patients and clinicians who rely on the affected drugs and devices.
• Small businesses in the drug and device supply chain may face setup and ongoing costs (the Regulatory Impact Analysis includes a small‑business analysis).

If a specific group or drug is unclear, the rules let the Minister add products to public lists—so the exact set of affected products will change over time.

Why it matters#

• More planning and required safety stock aim to reduce sudden shortages of critical medicines. That can mean fewer forced switches to less‑effective treatments, fewer treatment interruptions, and fewer risks to patient safety.
• Faster and broader reporting gives Health Canada earlier signals so it can act sooner (for example, by allowing safe imports or extending expiry dates).
• There are trade‑offs: manufacturers and wholesalers will face new costs to hold stock, build plans, track sales surges, and report more often. Those costs could be passed down the supply chain. Health Canada’s analysis estimates industry costs of about $17.1M per year but much larger estimated health benefits of about $3.2B per year.
• These are proposed changes, not law yet. The government opened a consultation for 70 days from the publication date (December 28, 2024), so stakeholders can still comment before any final rules are made.