Preventing Drug Shortages in Canada

The Interim Order Respecting Drug Shortages (Safeguarding the Drug Supply) was announced in Canada on November 27, 2020. This interim order (IO) introduces new measures to help prevent bulk importation programs, such as the one recently established by the U.S., from causing or worsening a drug shortage in Canada. Under the IO, certain drugs intended for the Canadian market are prohibited from being sold for consumption outside of Canada if that sale could cause or worsen a drug shortage.

In order for Health Canada to meet the objectives of the IO, the Minister may request information from Drug Establishment License (DEL) on volumes intended to be sold outside of Canada. Health Canada will review information provided, and make a final determination of whether or not distribution plans would potentially case a drug shortage or worsen a drug shortage. If the party in question can determine that distribution will not cause a drug storage in Canada, distribution of drugs outside of Canada will be permitted. This authority will help Health Canada assess the level of risk for the products currently experiencing a shortage, and will enable Health Canada to enact measures needed to prevent or alleviate potential drug shortages before they occur.

On October 1, 2020, the U.S. Department of Health and Human Services published the final rule on the Importation of Prescription Drugs. The rule creates a pathway for licensed U.S. pharmacists or wholesalers to import, in bulk, certain prescription drugs intended for the Canadian market. Diversion of drugs from the Canadian market would put added pressure on the drug supply, increasing the risk of drug shortages harming Canadians.

This latest IO focuses on drugs for which a shortage would have the highest impact on patient health and safety. Drugs under the scope of the IO include prescription drugs, controlled substances and biologics. Drugs manufactured for export, which are not labelled for the Canadian market, are excluded from the IO. Enforcement of this IO will be managed through inspections, compliance promotion, monitoring, and verification. Actions that could be taken against DEL holders that violate the terms of the IO include a suspension or cancellation of the Drug Establishment License.