In 2020 and 2021, Health Canada issued a number of interim orders to address shortages of drugs, medical devices, and other health products. The interim orders were temporary measures to provide Health Canada with tools needed to effectively manage the pandemic. On September 1, 2021, the Canadian government published the Regulations Amending Certain Regulations Concerning Drugs and Medical Devices (Shortages),1 aimed at maintaining Health Canada's ability to monitor, prevent, and alleviate drug and medical device shortages in Canada on a permanent basis once the pandemic has ended.
What you need to know
- Exceptional importation and sale: A new framework will allow for the importation and sale of certain drugs and medical devices in the event of a shortage or anticipated shortage in Canada that may not fully meet Canadian regulatory requirements.
- Mandatory reporting of medical device shortages: Manufacturers and importers of specified medical devices will be required to report shortages (actual and anticipated), including those resulting from any discontinuance of sale.
- Drug export prohibition:2 Amendments to the Food and Drug Regulations will prohibit the exportation by a drug establishment licence (DEL) holder of certain drugs intended for the Canadian market, unless there are reasonable grounds to believe that the exportation will not cause or exacerbate a shortage of the drug in Canada. If a DEL holder exports a drug from Canada, it must immediately create and retain a detailed record of the information relied on to determine that such export will not cause or exacerbate a shortage in Canada.
- Power to request information: Health Canada's power to request information from regulated parties to assess a drug or medical device shortage will be expanded.
- Biocides and foods for a special dietary purpose: Exceptional importation of biocides and foods for a special dietary purpose was previously permitted under Interim Order No. 2 Respecting Drugs, Medical Devices and Foods for a Special Dietary Purpose in Relation to COVID-19 (March 1, 2021).3 Continued measures for these products will not be permanently introduced into legislation. Biocides imported under Interim Order No. 2 may continue to be sold to retail facilities until December 31, 2022. Retail sale of such biocides will be permitted until the imported stock has been exhausted. Foods for a special dietary purpose imported under Interim Order No. 2 may continue to be sold until their expiration date.
- DEL for hand sanitizers: Applicants that submitted a DEL before September 1, 2021 may continue conducting licensable activities related to drug-based hand sanitizers while the DEL application is being processed until the earlier of: (i) the date that Health Canada has made a decision regarding the DEL application, (ii) the date the application is withdrawn, or (iii) September 1, 2023.
Exceptional importation and sale of drugs and medical devices
Drugs and medical devices listed on the List of Drugs for Exceptional Importation and Sale and the List of Medical Devices for Exceptional Importation and Sale will be eligible for exceptional importation and sale in Canada. These lists are maintained by Health Canada, and a product may be added to the lists if there are reasonable grounds to believe that:
- a Canadian drug or medical device is in shortage or at risk of shortage; and
- the drug or medical device to be added can be substituted for the Canadian drug or medical device.
Drugs or medical devices must be authorized for sale by a foreign regulatory authority in order to be added to the exceptional lists. While these designated health products are exempted from compliance with certain provisions of the Food and Drug Regulations and the Medical Devices Regulations mainly relating to labelling requirements, they are subject to requirements related to establishment licences, good manufacturing practices, recalls, reporting of adverse drug reactions, and mandatory problem reporting for medical devices. Health Canada will determine the permitted duration of exceptional importation of a designated health product on a case-by-case basis, the end date of which will be set out on the applicable list. Health Canada may also specify in advance a maximum limit on the number of products/units permitted for import.
The Canadian importer must have a valid establishment licence that authorizes the importation of the applicable category of product, and must notify Health Canada of the intended import at least three business days (for drugs) or five business days (for medical devices) in advance of each shipment. Further, importers must ensure that information supporting the safe use of the health product is available in both English and French.
Mandatory reporting of medical device shortages
Manufacturers and importers will continue to be required to report shortages (actual and anticipated) of medical devices identified on the List of Medical Devices – Notification of Shortages. Health Canada may add specific devices or types of devices on the list if a shortage presents or may present a risk of injury to human health.
The mandatory reporting obligation applies to manufacturers of all specified medical devices and importers of Class I specified medical devices. The report must be submitted to Health Canada within five business days after the day on which the manufacturer/importer becomes aware that a shortage exists or has determined that a shortage is anticipated.
There are two situations exempted from this mandatory reporting obligation:
- if a manufacturer or importer anticipates that the manufacturer will be able to meet the demand within 30 days of the day it anticipated or became aware of the shortage; or
- if the manufacturer can meet the demand for a different medical device that it manufactures which can be substituted for the specified medical device in shortage.
Health Canada will publish the information received through this mandatory reporting on a Government of Canada website.
Drug export prohibition
In response to the U.S. law that came into effect late 20204 permitting the importation of Canadian drugs as a cost-containment measure, Health Canada implemented temporary prohibitions on drug exports, aimed at safeguarding Canada's drug supply from the impact of diversion from Canada. The regulatory amendments will prohibit, on a permanent basis, the exportation by a DEL holder of the following drugs intended for the Canadian market, unless there are reasonable grounds to believe that the exportation will not cause or exacerbate a shortage of the drug in Canada:
- drugs listed in Schedule I, II, III, IV or V to the Controlled Drugs and Substances Act;
- drugs listed in Schedule C or D to the Food and Drugs Act (F&DA);
- prescription drugs on the Prescription Drug List; and
- drugs that are permitted to be sold without a prescription, but that are administered only under a practitioner's supervision.
This export prohibition does not apply to over-the-counter drugs, veterinary drugs and natural health products, and so these products can be exported without additional oversight as long as the applicable requirements of the Food and Drugs Act and Food and Drug Regulations are complied with. Furthermore, the export prohibition does not apply to 1) consumer-level pharmacies that do not hold a DEL, 2) transshipment of drugs (i.e., drugs imported into Canada for the sole purpose of export), or 3) drugs manufactured in Canada solely for export purposes.
These regulatory amendments are final and will come into force on the following dates:
- November 27, 2021 for amendments related to the prohibition on drug exportation;
- March 1, 2022 for most other amendments.
Health Canada intends to publish various guidance documents in the coming months regarding the new frameworks and obligations introduced by the amendments. Regulated parties should review these amendments carefully and plan to make operational modifications accordingly, to adapt to the new frameworks and to meet the new compliance requirements.
2 See our previous bulletin on related topic: https://www.torys.com/insights/publications/2020/12/canada-acts-to-safeguard-drug-supply.
4 See our bulletin on this issue: https://www.torys.com/insights/publications/2020/12/canada-acts-to-safeguard-drug-supply
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.