New Rules to Reduce Drug and Device Shortages

Summary#

This is a proposed set of changes to rules under the Food and Drug Regulations and the Medical Devices Regulations that aim to prevent and reduce harmful drug and medical device shortages in Canada. The package would require some drug companies, importers and wholesalers to hold safety stock, make shortage‑prevention plans and report big spikes in demand; it would also broaden exceptional import rules and improve shortage reporting. This is a proposal by Health Canada (published December 28, 2024) and is open for comment (comment period 70 days).

What it does#

• Adds new powers and lists (kept on government websites) so the Minister can change which products the shortage rules apply to, including some over‑the‑counter drugs (via a List of Drugs for the Purposes of Section C.01.014.8).
• Requires drug makers of certain high‑risk products to create and keep shortage prevention and mitigation plans (a draft Critical and Vulnerable Drug List would guide which drugs qualify).
• Requires some drug makers to hold minimum safety stocks in Canada for the most critical drugs (default amount = 3 months of the previous year’s average monthly demand; managed through a Safety Stock List; Health Canada expects up to 425 affected product entries).
• Requires importers and wholesalers to report a large surge in sales — defined as at least 250% in a month versus the same month a year earlier — within 5 days.
• Lets the Minister add specific drug lots or batches to a List of Drugs with Extended Expiration Dates so their sale can continue past the original expiry in shortage situations.
• Expands and clarifies the exceptional importation and sale frameworks (the List of Drugs for Exceptional Importation and Sale and the medical device equivalent) so substitutes can be used more broadly and for longer in some cases (for example, up to 36 months after a product is discontinued).
• Tightens and standardizes shortage and discontinuation reporting for drugs and medical devices:
  • Drug discontinuations must be reported 12 months before stopping sales (or within 5 days if decided less than 12 months in advance).
  • Medical device makers/importers must post shortages and discontinuations to a public, third‑party website and keep documented procedures to monitor supply.
• Sets different coming‑into‑force timings: some measures at 6 months, others at 1 year, and the safety‑stock rule at 18 months after final publication.

Who's affected#

• Drug manufacturers (market authorization holders) — especially those selling drugs the department considers “critical” or “vulnerable” (an estimated 1,380 product entries may meet the broader “serious risk” threshold; up to 425 may meet the “serious and imminent” threshold for safety stocks).
• Importers and wholesalers of drugs — required to report demand surges and follow new exceptional import/sale rules.
• Medical device manufacturers and importers — tighter shortage reporting and updated exceptional import rules; some device categories will be listed for mandatory reporting.
• Pharmacies, hospitals and practitioners — may see more products routed through exceptional importation, and some imported products may carry extra safety information at retail.
• Health Canada and provincial/territorial partners — more data and tools to monitor and respond to shortages, plus costs for reviewing reports and lists.
• Patients and the general public — the ultimate intended beneficiaries because the measures target products whose shortages could cause serious harm.
• Small businesses in the drug and device sectors — the Regulatory Impact Analysis notes they would bear some of the compliance costs (the proposal includes a small business lens).

Why it matters#

• The stated public‑health goal is to reduce situations where patients must switch to less effective treatments, delay care, or face other harms because a needed drug or device is unavailable.
• The government’s analysis estimates quantifiable annual costs of about $17.1 million per year (present value $119.5 million over 10 years) and monetized benefits of about $3.2 billion per year (present value $22.2 billion over 10 years), with a projected net present‑value benefit of $22.1 billion over 10 years. These figures come from the department’s impact analysis and rest on assumptions about how many shortages would be avoided or shortened.
• For industry the changes mean extra planning, record‑keeping, stockholding and reporting work. For patients and health systems the aim is fewer or shorter shortages of the most critical medicines and devices.
• The proposal includes phased timing so regulators and industry have time to comply. It is not yet law — Health Canada is seeking input before any final rules are made.