Tighter Rules for Drugs Exported from Canada

Summary#

These are final amendments to the Food and Drug Regulations (instrument SOR/2022-100) that change how drugs made in Canada for export, and drugs simply passing through Canada, are handled. The amendments were published on June 8, 2022 and were set to take effect six months later (around December 8, 2022), with an extra three-month transition window for some businesses. Health Canada led the changes.

What it does#

• Requires drugs made in Canada solely for export to be made, tested, packaged/labeled, distributed or wholesaled by holders of a drug establishment licence who pay the applicable fees under the Fees in Respect of Drugs and Medical Devices Order.
• Requires exporters who sign the export certificate to keep a copy for five years.
• Makes exporters certify on the export form that the product is made in Canada, is not for sale in Canada, and meets the destination country’s legal requirements.
• Applies many of the same good manufacturing practice rules (Parts C, Divisions 2–4 of the Food and Drug Regulations) to exported drugs, with some exceptions where Canadian-specific rules do not apply.
• Clarifies that drugs transhipped through Canada must be transported and stored “in bond” (that is, under customs-controlled conditions).
• Provides a temporary transition: businesses that were operating under the old export exemption may continue for three months after the rules take effect (and longer in some cases if they have applied for a licence before the transition ends).

Who's affected#

• Manufacturers, packagers, testers, distributors and wholesalers in Canada that make or handle drugs solely for export.
• Exporters who issue export certificates and must keep records for five years.
• Carriers and warehouses that handle drugs transhipped through Canada (because such shipments must be kept in bond).
• The government notes it is aware of 16 companies that used the old export exemption; 3 of those did not have a licence. Health Canada estimated up to 10 additional unlicensed companies might need to apply for licences.
• If it is unclear whether a particular business is affected, Health Canada’s outreach or the licensing rules will determine that (the source notes Health Canada cannot identify every unlicensed exporter in advance).

Why it matters#

• It brings exported drugs under largely the same quality oversight as drugs sold in Canada. That means more consistent checks on how exported drugs are made and stored.
• The change helps Canada meet trade and regulatory commitments—especially under the Comprehensive Economic and Trade Agreement with the EU—and supports Canada’s standing in the Pharmaceutical Inspection Co-operation Scheme.
• Health Canada estimates the cost to industry at a present value of $2,287,030 over 10 years (annualized $325,621), mainly for licences, training and inspections. A typical licence fee example quoted was $30,677 for a certain fabrication activity (2022–2023 fee year).
• For the public, the practical effect is stronger assurance that drugs leaving Canada meet internationally recognized manufacturing and quality standards. For exporters, it may mean extra paperwork, possible licence fees, and readiness for inspections.