Rules to Prevent Drug and Device Shortages

Summary#

This is a proposed set of changes from Health Canada to rules under the Food and Drugs Act that aim to reduce harmful shortages of drugs and medical devices. The proposal would make some manufacturers and importers keep extra stock, prepare shortage plans, and send earlier warning signals; it is a proposal open for comment (publication: December 28, 2024, comment period: 70 days).

What it does#

• Requires certain drug makers (market authorization holders) to keep minimum “safety stocks” in Canada for the drugs that could cause a serious and imminent health risk if they run out (default amount: 3 months of recent average demand).
• Requires market authorization holders of higher-risk drugs to prepare and keep a shortage prevention and mitigation plan while they sell the drug in Canada.
• Requires importers and wholesalers of high-risk drugs to report a big surge in sales (an increase of at least 250% in a month versus the same month a year earlier), within 5 days.
• Lets the Minister expand which drugs must follow shortage rules (including some over‑the‑counter drugs) by adding them to online lists the government maintains. These include an Expanded Scope List, a Safety Stock List, a Critical and Vulnerable Drug List, and a List of Drugs with Extended Expiration Dates.
• Gives the Minister authority, in some shortages, to extend expiry dates on specific lots or batches to keep usable supply in circulation.
• Changes the exceptional importation/sale rules so Health Canada can bring in or allow sale of foreign-authorized substitutes in more situations (including for some discontinued products for up to 36 months). It also adds requirements for safety information to accompany such products.
• Tightens and harmonizes shortage and discontinuation reporting rules for both drugs and medical devices. For drug discontinuations, companies would need to give at least 12 months advance notice (instead of six). For many medical devices, manufacturers/importers would need documented procedures to monitor demand and report shortages.
• Phases implementation so some powers start in 6 months, other new reporting and plan rules in 1 year, and safety-stock rules in 18 months.

Who's affected#

• Market authorization holders (drug manufacturers/holders of drug licences) — especially those for drugs identified as critical or vulnerable.
• Importers and wholesalers of drugs — who must report demand surges and follow exceptional importation rules.
• Medical device manufacturers and importers — required to track and report shortages for specified devices and to have documented procedures.
• Pharmacists, hospitals and other health-care providers — they may see changes in supply, access to imported substitutes, and new labeling or safety information on products brought in under the exceptional framework.
• Patients who rely on drugs or devices that are at high risk of shortage — especially those using the products named on the government lists.
• Health Canada and provincial/territorial partners — will get more reporting and new tools to act on shortages.
• Small businesses in manufacturing, importing or distribution were singled out in the analysis and could face extra costs and administrative work.
• If it is unclear who is affected for a particular drug or device, the regulations rely on lists maintained by the government to set who must follow the new rules.

Why it matters#

• Drug and device shortages can force people to switch to less effective treatments, delay care, or interrupt ongoing therapy. These are direct health risks for patients.
• The proposal pushes more responsibility onto companies that control supply to spot and reduce shortage risks before patients are harmed (safety stocks, written plans, earlier signals).
• Health Canada says the new tools could reduce shortage harm substantially. The government’s cost‑benefit analysis estimates monetized benefits of about $3.2 billion per year (present value $22.2 billion over ten years) and costs of about $17.1 million per year (present value $119.5 million over ten years). The analysis treats these as estimates and comes from the proposal document.
• On the ground, this could mean fewer sudden gaps in important medicines and more options (including temporary imported alternatives) when shortages happen. It could also mean higher inventory costs, extra paperwork, and some logistical or waste concerns for manufacturers, wholesalers and small businesses.
• These are proposed amendments. They are not law yet. The public consultation and timing are described in the proposal (phased start in 6 months, 1 year, and 18 months after final publication).