Canada Gazette, Part I, Volume 158, Number 52: Regulations Amending Certain Regulations Made Under the Food and Drugs Act (Shortages and Discontinuation of Sale of Drugs and Medical Devices)

December 28, 2024

Statutory authority
Food and Drugs Act

Sponsoring department
Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The problem of drug and medical device shortages poses a risk to the health of people in Canada by negatively affecting their ability to access the drugs and medical devices they need.

Regulations made in 2016 and 2021 have improved Health Canada’s ability to prevent and mitigate shortages; however, ongoing weaknesses in global medical supply chains have highlighted a need to better protect people from risks to health posed by shortages. In particular, new tools are needed to proactively address the risk of shortages that could cause serious harm to people in Canada. These tools need to be agile to allow their application to adapt to new circumstances as shortage risks evolve. The department’s experience has also highlighted a need to refine existing tools, such as the frameworks that govern the reporting of shortages and discontinuations as well as the exceptional importation of drugs and medical devices to prevent, when possible, or mitigate the impacts of a shortage.

Background

Drug and medical device shortages in Canada

Drug and medical device shortages are a complex and growing problem worldwide. A shortage is a situation in which a market authorization holder of a drug or a manufacturer of a medical device is unable to meet the demand for its product in Canada. Shortages can arise from a range of circumstances, such as manufacturing or distribution problems, recalls, difficulties accessing raw materials, stockpiling, increases in demand, and major geopolitical developments or environmental events.

Drugs and medical devices play an integral role in delivering timely and effective patient care. Shortages of these products can contribute to adverse patient outcomes and cause harm. Shortages may require a patient to use a less effective substitute drug^{footnote 1} or medical device, ration products used in their care,^{footnote 2} or cease use of a needed product. These actions can all result in harm to a patient through suboptimal treatment or an interruption to treatment. Shortages may lead patients to use atypical means of procuring products that can increase the harm to health (e.g. purchasing products online or from a person not authorized to sell them). Further, treatment errors may occur when the patient uses a less familiar product, which can lead to a harm to health. Drug and medical device shortages also burden the health care system when health care practitioners are required to spend time on finding alternatives, additional patient monitoring and, in the case of medical devices, learning to use alternative treatments or medical devices.

The harms caused by a shortage can range from relatively mild to life-threatening in nature. This depends on factors like the severity of the injury or disease being treated, the size of the population being treated, the public health importance of the disease, and the availability of a substitute product.

Shortages impact all major drug classes and a wide range of medical devices. Since 2017, 10%–15% of drugs marketed in Canada are in shortage at any given time and over half (55%) of marketed drugs have experienced at least one shortage. For example, in May 2024, 937 (10%) drugs marketed in Canada were in shortage and, of these, 23 were considered to be critical, national shortages. As well, since 2020, nearly 550 medical device shortages have been reported to Health Canada across 18 different clinical categories of devices specifically monitored by the department. In May 2024, 87 medical devices subject to the mandatory shortage reporting framework were in shortage.^{footnote 3}

There is evidence from population health and demographic trends that Canada’s need for drugs and medical devices will continue to grow as the population ages and the number of people impacted by chronic diseases increases. This may lead to the problem of shortages worsening over time. Major drivers of this trend involve increased diagnosis and treatment of chronic diseases. For example, it is expected that Canada’s senior population, which accounts for nearly two thirds of publicly funded drug spending,^{footnote 4} will increase by 68% from 2017 to 2037.^{footnote 5} Although similar data are not available for medical devices, medical devices are widely understood to be crucial in managing chronic diseases that disproportionately affect older individuals.

Drug and medical device shortage reporting

In 2016, Health Canada advanced regulations to require market authorization holders for certain drugs to report shortages and discontinuations of their products on a third-party operated website under contract to the Department. In 2020 and 2021, the government introduced a similar framework to mandate reporting to Health Canada of select medical device shortages that are specified on a list incorporated by reference. Medical device shortage reports are currently published by Health Canada on its website.

These frameworks are both used in the department’s ongoing surveillance of drug and medical device shortages, but there are differences in the way those frameworks are written and administered. In particular, medical device shortage reporting requirements apply to a narrower set of products and are reported to Health Canada and are processed and published by the department.

These reporting frameworks provide the department and its stakeholders with information about which products are in shortage and how long those shortages are expected to last. They also provide information on drug and medical device discontinuations. This information is used by governments, industry, clinicians and patients to identify whether the reported shortages and discontinuations could affect them and develop plans to mitigate their worst effects.

Preventing and mitigating shortages

Health Canada leads a range of activities to help prevent and mitigate shortages of therapeutic products. Historically, these activities have involved working alongside supply chain stakeholders to increase production of products in shortage, to conserve existing supplies, or to source substitutes during times of shortage. The department also leads or co-chairs formal committee structures that engage provinces and territories, industry, health care practitioners, and the patient community to facilitate information sharing about potential and actual shortages and mobilize collective response when shortages occur.

In 2020 and 2021, the Food and Drugs Act was amended and new regulations were made through interim orders^{footnote 6,footnote 7,footnote 8} and permanent regulations, designed to help prevent drug and medical device shortages and alleviate them when they occur. These regulations

• permit exceptional importation and sale of designated drugs and medical devices that do not fully meet Canadian regulatory requirements, but that are manufactured to comparable quality standards, to address a shortage or an anticipated shortage;
• enable the Minister to require information to be provided about a shortage from drug market authorization holders, and medical device licence holders and establishment licence holders under certain conditions;
• prohibit the distribution of certain drugs intended for the Canadian market for consumption or use outside of Canada if doing so would cause or exacerbate a shortage; and
• require the reporting of medical device shortages for specified categories of medical devices.

Weakness in the medical supply chain

In 2020, the COVID-19 pandemic had widespread effects on global supply chains, including medical supply chains.

The pandemic underscored a number of existing and emerging vulnerabilities in global supply chains for many critical products, including drugs and their ingredients. For instance, the concentration of active pharmaceutical ingredient production and raw materials in a few foreign jurisdictions combined with export trade restrictions and transportation disruptions threatened access to needed drugs in Canada and worldwide. Limited supply chain visibility, unforeseen demand spikes, inadequate safety stock supplies, and just-in-time delivery methods further contributed to global supply chain pressures and constrained availability of key drugs and medical devices. This resulted in a significant spike in shortages in Canada^{footnote 9} and around the world.^{footnote 10}

Despite global progress towards reducing the worst effects of the pandemic-related disruptions, global medical supply chains have remained fragile. For example, the number of concurrent critical and national drug shortages in Canada (classified as “Tier 3 shortages”) has not significantly shifted from its peak, despite the easing of the pandemic.^{footnote 11}

In the medium and long term, there is also evidence that the situation is being exacerbated by increasing extreme weather events. For example

• A 2023 tornado in North Carolina destroyed a Pfizer warehouse causing supply constraints on over 30 drugs.^{footnote 12}
• The “Great Texas Freeze” in 2021 caused statewide blackouts and closed resin manufacturing facilities, creating shortages of medical devices that use resin such as chest drains, and semiconductor plants that produce chips for many medical devices.^{footnote 13}
• Hurricane Maria struck Puerto Rico in 2017 and threatened the global supply for dozens of important drugs and medical devices like intravenous (IV) fluids and IV bags that support the delivery of a wide range of drugs.^{footnote 14}

Weaknesses in medical supply chains have been felt across Canada and around the world. By 2022, Canada began to experience shortages in categories of health products that had not previously required active intervention by Health Canada, including pediatric antibiotics, over-the-counter analgesics, cough and cold medications, and infant formulas.^{footnote 15,footnote 16} These shortages raised significant public attention and concern.

The average length of a shortage in Canada is 98 days^{footnote 17} but lead times to change production schedules can be much longer. Manufacturers and other supply chain players can help to limit and/or prevent the impact of shortages by proactively identifying, prioritizing and implementing strategies to mitigate risks within their own control. Recent publications have demonstrated that proactively assessing risks to drug manufacturing processes and supply chains, coupled with an understanding of market vulnerabilities, have enabled stakeholders to support robust operations that help prevent shortages.^{footnote 18} This research further notes that proactive risk assessment has enabled some stakeholders to predict and prevent supply disruptions that could potentially lead to a shortage.^{footnote 19,footnote 20} Thus, the likelihood of a shortage occurring can be decreased by assessing shortage risks and implementing robust quality management systems that explicitly consider and address these risks.

As well, holding additional stock is an effective mechanism to help maintain the availability of a necessary product when there are rapid and unexpected fluctuations in supply or demand for the product. Safety stock is an inventory practice of holding additional stock to protect against supply chain uncertainties and shortages.^{footnote 21} The industrial engineering literature demonstrates how holding safety stock is an effective mechanism to address unpredictable spikes in demand and issues with supply chains. Specifically, there is an increased likelihood that shipment delays or disruptions will result in a shortage if a company does not hold safety stock.^{footnote 22} This practice can also be important for preventing stockouts from occurring, which would be a complete depletion or interruption of supply. Safety stock inventories are one of the few tools that can prevent the majority of stockouts.^{footnote 23}

International response to weaknesses in medical supply chains

In response to health risks posed by ongoing problems in global medical supply chains, several countries have adopted or are developing new policy or regulatory approaches to preserve access to therapeutic products within their borders. Three common approaches have focused on safety stocks, shortage prevention and mitigation plans, and shortage reporting.

Safety stocks

• In 2021, France implemented regulations requiring market authorization holders for designated “medicines of major therapeutic interest” to hold a minimum of two to four months of excess stock in the country, which can be mobilized in the event of a shortage.^{footnote 24} Companies can apply for a waiver from these requirements if they meet certain criteria.
• In 2022, Australia adopted a requirement for market authorization holders of “designated brands” to hold safety stocks in volumes equivalent to four to six months of regular demand in the country and to provide regular six-month reports on those stocks.^{footnote 25} This was supported by price increases and guarantees negotiated with market authorization holders.

Shortage prevention and mitigation plans

• The United States Food and Drug Administration concluded in 2019 that one of the three root causes of drug shortages is that the “market does not recognize and reward manufacturers for mature quality management systems,” which the organization defines as a quality management system that aims to robustly detect and address vulnerabilities to prevent the occurrence of problems.^{footnote 26} The lack of a market incentive helps to explain why manufacturers may not proactively develop plans to assess and address shortage risks, which could increase the likelihood of a supply disruption occurring. Under the 2020 United States Coronavirus Aid, Relief, and Economic Security Act, certain manufacturers are required to develop, maintain and implement a redundancy risk management plan that identifies and evaluates risks to the supply of certain drugs.^{footnote 27}
• Since 2021, market authorization holders of “medicines of major therapeutic interest” sold in France have been required to maintain shortage risk management plans for these drugs and to report the products for which they are developing shortage risk management plans.^{footnote 28}
• In a 2021 study, the European Commission concluded that in many cases manufacturers could proactively analyze shortage risks and plan for their occurrence, even though some shortages materialize without warning.^{footnote 29} In 2023, the European Union published an amendment proposal for the General Pharmaceutical Legislation, which would require that manufacturers maintain shortage prevention and mitigation plans for all drugs sold in Europe.^{footnote 30} The legislation also proposes a scheme to allow regulatory authorities to request that market authorization holders submit their plans to the relevant regulator.

Reporting

• In 2019, Australia adopted a framework for reporting drug shortages similar to the model used in Canada.^{footnote 31} The scope of the reporting framework includes certain important over-the-counter products like adrenaline autoinjectors and naloxone nasal spray. Australia has also recently adopted a voluntary approach to receiving reports from distributor associations on increases in demand for a drug.
• The United States Food and Drug Administration has developed an Office of Supply Chain Resilience for medical devices whose aim is to strengthen public health supply chains by proactively monitoring, assessing and communicating risks and vulnerabilities to prevent shortages of medical devices.^{footnote 32} Among other activities, this has involved maintaining a list of medical device shortages and working toward developing a list of critical medical devices.

Objective

The objective of the proposed amendments to the Food and Drug Regulations and the Medical Devices Regulations is to better protect people in Canada from the harms posed by certain therapeutic product shortages. The intended effect of these proposed amendments is to provide Health Canada and its regulated parties, stakeholders and provincial/territorial partners with more and better tools to prevent, mitigate, and respond to drug and medical device shortages.

The proposed amendments are also designed to improve the quality of, and user experience for, existing administrative processes such as drug and medical device shortage reporting or applications for exceptional importation.

Description

The Food and Drug Regulations and the Medical Devices Regulations would be amended to

• allow the Minister to expand the scope of drugs that would be subject to regulatory obligations related to shortages, such as reporting, to additional drugs or classes of drugs, including certain over-the-counter drugs;
• allow the Minister to require information to be provided, in certain circumstances, about a shortage of any drug that could present a risk of injury to human health if in shortage rather than only those drugs in scope of shortage reporting;
• set new requirements for drug market authorization holders to develop and maintain shortage prevention and mitigation plans for drugs where a shortage could present a serious risk of injury to human health;
• set new requirements for importers and wholesalers to report to Health Canada surges in demand for drugs they sell where a shortage could present a serious risk of injury to human health;
• set new requirements for drug market authorization holders to maintain safety stocks for select drugs that could present a serious and imminent risk of injury to human health if in shortage;
• allow the Minister to increase the supply of a drug available to address a shortage by extending the expiration date for the drug in certain circumstances;
• improve the exceptional importation and sale frameworks for drugs and medical devices;
• improve and expand the reporting of drug and medical device shortages and discontinuations; and
• make minor non-substantive amendments to improve consistency of language between English and French versions of regulatory text.

These measures are described in greater detail below.

Scope of drugs subject to shortage regulations

The existing scope of the shortage regulations includes controlled substances on Schedules I to V of the Controlled Drugs and Substance Act, prescription drugs on the Prescription Drug List, radiopharmaceuticals in Schedule C of the Food and Drugs Act, biologics in Schedule D of the Food and Drugs Act and drugs that are permitted to be sold without a prescription but are administered only under the supervision of a practitioner (also known as “ethical drugs”).

These proposed amendments would expand the scope of these regulations by incorporating by reference to a List of Drugs for the Purposes of Section C.01.014.8 of the Food and Drug Regulations (Expanded Scope List). Using a document incorporated by reference allows the scope of the shortage regulations to be adapted according to changing circumstances and target only the drugs that meet the conditions set out in the proposal. The use of documents incorporated by reference is consistent with authorities granted by section 30.5 of the Food and Drugs Act.

The Expanded Scope List would apply certain regulatory obligations to additional drugs that are not currently in scope of the shortage framework. This list would be maintained on a Government of Canada website. A proposed sample of the drugs that could be included on the list, as well as a draft version of this list, is provided for consultation.

Under the proposed amendments, the Minister of Health would have the authority to add a drug or class of drugs to the Expanded Scope List if the Minister has reasonable grounds to believe that a shortage or the discontinuation of sale of that drug or that class of drugs could present a risk of injury to human health. This is a different threshold of risk from the proposed amendments regarding safety stocks or shortage mitigation and prevention plans and demand surge reporting as noted above. This list would generally be amended only after consultation with stakeholders, in line with Health Canada’s Incorporation by Reference Policy. Advance notice would be given to regulated parties to allow them time to come into compliance with their new obligations related to this list.

In particular, drugs on this Expanded Scope List would be subject to the following provisions of the Food and Drug Regulations:

• the existing requirement under sections C.01.014.9 and C.01.014.10 of these regulations for market authorization holders to report shortages and discontinuations of the drug;
• the existing prohibition under section C.01.014.13 against distributing the drug for consumption or use outside of Canada if doing so could cause or exacerbate a shortage in Canada;
• the proposed requirements under section C.01.014.81 for market authorization holders to maintain shortage prevention and mitigation plans if a shortage of the drug could cause a serious risk of injury to health;
• the proposed requirements under section C.01.014.91 for importers and wholesalers to report demand surges if a shortage of the drug could cause a serious risk of injury to health; and
• the proposed requirement under section C.01.014.84 for market authorization holders to ensure that a safety stock is held in Canada if the drug is also specified on the list linked to safety stock requirements (Safety Stock List).

Some shortage frameworks that apply under the current scope would no longer be limited to the drugs in scope for shortage reporting. For example, the proposed amendments would also expand the Minister’s authority to require information about drug shortages so that it applies to any drug that could present a risk of injury to human health if it is in shortage, including over-the-counter drugs. A drug would no longer need to be in scope of the other shortage regulations for the Minister to use this authority to request information. The scope is similarly expanded for exceptional importation and sale, which is outlined in the relevant section below.

Shortage prevention and mitigation plans

The requirements for shortage prevention and mitigation plans would be limited to drugs where there could be a serious risk of injury to human health if in shortage. To assist market authorization holders in meeting these requirements, Health Canada would publish guidance as well as a list of drugs that the department would consider to be within scope of these requirements as these drugs are critical and vulnerable to shortage (the Critical and Vulnerable Drug List). This list is being developed using a rigorous methodology to assess clinical importance, which includes independent clinician expert reviews, consideration for the Canadian context and collaboration with an expert panel of clinicians, policy-makers, and industry stakeholders. This list is being published on the department’s website as part of the consultation on this proposal. Health Canada would keep the Critical and Vulnerable Drug List up to date to reflect changes to criticality or vulnerability over time.

The proposed shortage prevention and mitigation plan amendment would require drug market authorization holders to establish and maintain a plan that identifies and assesses shortage risks and sets out a plan for mitigating the risks of shortages when they occur. Shortage prevention and mitigation plans would need to be maintained for the entire time that the drug market authorization holder sells the drug on the Canadian market.

Market authorization holders who are required to establish and maintain a plan would need to include the following information in their shortage prevention and mitigation plan for a drug where there could be a serious risk of injury to human health if there were a shortage of the drug:

• a detailed description of the measures that the market authorization holder intends to take to identify and assess shortage risks associated with the drug;
• a detailed description of the shortage risks associated with the drug that the market authorization holder has identified and assessed;
• a detailed description of the measures that the market authorization holder intends to take to prevent or mitigate shortage risks associated with the drug and to mitigate the impacts of a shortage of the drug;
• a general description of how the market authorization holder intends to evaluate the effectiveness of such measures;
• a strategy for communicating to the Minister any significant increase in the likelihood that a shortage of the drug could occur; and
• a detailed description of how the market authorization holder ensures that a safety stock of the drug is maintained, if applicable and consistent with the new measures described in the safety stocks section below.

Internationally recognized formats of shortage prevention and mitigation plans would be acceptable for the purposes of fulfilling this requirement provided that they include all the essential elements above. Shortage risks that are specific to Canada could be added to the internationally recognized shortage prevention and mitigation plan as an annex or appendix.

Market authorization holders who are required to establish and maintain a plan would be required to assess the effectiveness of the measures outlined in their shortage mitigation and prevention plan every three years or, if applicable, when there is a significant change in the likelihood that a shortage of their drug could occur. Market authorization holders would also be required to submit their shortage mitigation and prevention plan to the Minister within 24 hours upon the Minister’s request.

Demand surge reporting

The proposed requirements for demand surge reporting would be limited to importers and wholesalers of drugs where there could be a serious risk of injury to human health if in shortage. To assist importers and wholesalers in meeting these requirements, Health Canada would publish guidance as well as the Critical and Vulnerable Drug List, which the department would consider to be within scope of these requirements.

The proposed demand surge reporting amendment would require importers and wholesalers to inform Health Canada if their monthly volume of sales of these drugs increases by at least 250% compared to the sales in the same month of the previous calendar year. If such an increase in sales takes place, the information would need to be provided within five days of the end of the month and would need to include

• the name and contact information of the importer or wholesaler providing the report;
• the drug identification number assigned to the drug being reported on;
• the drug’s brand name and proper name or common name;
• the proper or common names of the drug’s medicinal ingredients;
• the drug’s therapeutic classification according to the Anatomical Therapeutic Chemical classification at the third and fourth levels;
• the drug’s strength, dosage form, and route of administration;
• the quantity of product contained in the drug’s package; and
• the date on which the increase in demand began and the reason for the increase in demand if known.

Unlike the case of shortage reports under C.01.014.9, information submitted by importers and wholesalers under this requirement would not be published, to protect any confidential business information.

The purpose of this requirement would be to protect people in Canada from harms by giving Health Canada an advance signal of a significant surge in the demand for a drug that could cause a shortage. The purpose is not to signal a shortage that has already been reported. For this reason, this requirement would not apply if the increase in the volume of sales is associated with a drug shortage that has already been reported pursuant to the requirement at C.01.014.9.

Safety stocks

These amendments would incorporate by reference into the regulations a List of Drugs for the Purposes of Sections C.01.014.84 of the Food and Drug Regulations (Safety Stock List) maintained on a Government of Canada website, which the Minister may amend from time to time. The Minister of Health would have the authority to add a drug to the Safety Stock List only if the Minister has reasonable grounds to believe that a shortage of the drug, if it were to occur, could present a serious and imminent risk of injury to human health. Specifying drugs on a list incorporated by reference into the regulations provides flexibility to adapt to changing circumstances, to help ensure that only drugs that meet the necessary preconditions are included and to allow the adaptation of how the stock quantity is calculated to each unique situation.

This Safety Stock List would be a subset of the list of drugs that pose a serious risk of injury to human health if in shortage (i.e. the Critical and Vulnerable Drug List). A proposed sample of the drugs that could be included on the list, as well as a draft version of this list, is provided for consultation. Health Canada anticipates that up to 70 different drugs, articulated at the level of medicinal ingredient and route of administration, could meet the criteria for this list, which would specify up to 425 authorized products identified at the level of drug identification number. The process for identifying products that meet the criteria of presenting a serious and imminent risk of injury to human health would be outlined in guidance documents before any consultation on proposed additions to the list.

Amendments to the Safety Stock List would follow a stakeholder consultation, which is in line with Health Canada’s Incorporation by Reference Policy. The amendments would be implemented in a way that gives market authorization holders sufficient time to come into compliance with their new stockholding obligations.

Market authorization holders of drugs on this list would be required to ensure that a minimum quantity of the drug be held inside Canada. As a default, the quantity of stock that would be required to be held would be equivalent to three months of the average monthly demand for the drug in the previous calendar year.

A situation may arise where it may be necessary to maintain safety stocks in a quantity that is different than the default amount. For example

• Certain drugs may have physical characteristics that make it impractical to hold a safety stock in the default quantity; and
• An unusual pattern of demand in the previous year may make it inappropriate to hold a quantity of safety stock based on sales from that year.

For this reason, the Minister would have the authority to require market authorization holders to ensure that a different quantity of safety stock is held by indicating a different time period on the Safety Stock List. Before specifying a different quantity of safety stock, the Minister would be required to consider the characteristics and uses of the drug and any unusual patterns of demand for the drug in the previous calendar year as well as the risks to human health that could be presented by a shortage of the drug.

For each year that a market authorization holder would be required to ensure that a safety stock for a listed drug is held, it would be required to create a record of information in respect of its safety stocks for those drugs. This record would be required to show the following information for each month of that year:

• the address of each building where safety stock was kept and the quantity kept in each building;
• how the quantity of the safety stock was calculated;
• whether safety stock was kept by the market authorization holder or by another person on its behalf; and
• the contact information of any person who held safety stock on behalf of the market authorization holder.

The market authorization holder would be required to retain this record for at least three years after creating it.

In the case where a market authorization holder of a listed drug draws on its safety stock to respond to a shortage, the market authorization holder would be required to ensure that the safety stock is replenished and maintained as soon as feasible once the demand for the drug has been met.

Authority to extend drug expiration dates to address shortages

These amendments would incorporate by reference into the Food and Drug Regulations a List of Drugs with Extended Expiration Dates (Extended Expiration Dates List) maintained on a Government of Canada website, which the Minister may amend from time to time. Lots or batches of drugs added to this list would be permitted for sale until the extended expiration date specified on this list. This would provide the Minister with an additional tool to help address drug shortages.

Under the proposed amendments, the Minister of Health would have the authority to add any lot or batch to this list if

• the drug is authorized for sale in Canada;
• the Minister has reasonable grounds to believe that there is a shortage or risk of shortage of the drug that could present a risk of injury to human health; and
• the Minister has reasonable grounds to believe that the lot or batch of the drug will comply with the specifications of the drug up to and including the extended expiration date. This evidence would typically be provided by the market authorization holder.

Health Canada would consult with the market authorization holder before any changes are made to the list. The change would take effect immediately to avoid delays in responding to the shortage. This is similar to the approach taken with amending the List of Drugs for Exceptional Importation and Sale.

In the case where the Minister adds a lot or batch of a drug to the list, the market authorization holder of that lot or batch would be required to notify within five days any establishment licence holder they sell to that the expiration date was extended. In the case where an establishment licence holder that has sold a lot or batch of a drug on the list has been notified of the extended expiration date, they would be required to notify any person that they sell to within five days of being notified.

Updates to exceptional importation and sale frameworks for drugs and medical devices

These proposed amendments would update the Food and Drug Regulations and the Medical Devices Regulations to improve the exceptional importation and sale frameworks for drugs and medical devices.

In respect of drugs, the Food and Drug Regulations would be amended to provide the Minister with new regulatory tools to address drug shortages in a broader range of circumstances. The proposed amendments would modify the framework for the exceptional importation and sale of drugs specified in Part C Division 10 of these regulations to allow it to be used in a broader range of circumstances while mitigating safety risks to the greatest extent possible. In particular, the proposed amendments would

• Expand the exceptional importation and sale framework to allow the sale of a domestically manufactured drug that is authorized in a foreign jurisdiction with minor adjustments to adapt the requirements to a drug that is already in Canada. For example, a notification of sale would be required in place of a notification of import;
• Expand the scope of application of the exceptional importation and sale framework to allow its use to source an acceptable alternative of any drug that could present a risk of injury to human health if in shortage. This change would not affect existing safety requirements under the exceptional importation framework. The effect of the change would be to allow the use of the exceptional importation framework to respond to a wider range of drug shortages that pose a risk of injury to human health, such as shortages of over-the-counter drugs;
• Allow the exceptional importation and sale framework to be used to source substitutes for drugs that have been discontinued in Canada, for a period of up to 36 months after the product was discontinued. This would provide time to address discontinuations that could cause harm by bringing in a substitute drug for a limited time while patients transition to a different drug or while a new drug is being approved;
• Allow the Minister to limit the sale of specific drugs on the List of Drugs for Exceptional Importation and Sale so that a drug establishment licence holder can only sell a specified drug to a practitioner, pharmacist, hospital or another person who holds an establishment licence in respect of the drug. Pharmacists selling such a drug at the retail level would be required to keep the product inaccessible to the public until its sale. This would allow the department to more carefully balance the risks and benefits of exceptional importation and sale in specific cases;
• Require that information allowing safe use of the drug accompany the drug or be provided to the purchaser or consumer at the time of sale. If the drug is sold in an open self-selection area, copies of the information would be required to be placed adjacent to the drug in a manner that permits the purchaser or consumer to take a copy;
• Require importers or sellers of drugs on the List of Drugs for Exceptional Importation and Sale to report serious adverse drug reactions associated with those drugs to the Minister within 15 days of receiving information about an adverse drug reaction or becoming aware of it. This would provide the department with a mechanism to better assess the ongoing risk profiles of drugs on the list; and
• Require importers or sellers of drugs on the List of Drugs for Exceptional Importation and Sale to report information in respect of any serious risk of injury to human health that is associated with certain foreign regulatory actions (e.g. drug recall in a foreign jurisdiction) within 72 hours of when they receive this information or become aware of it.

In respect of medical devices, the Medical Devices Regulations would be amended to clarify the scope of the exceptional importation framework for medical devices. In particular, the proposed amendments would

• Revise section 62.28 of these regulations to clarify that the Minister may only add a medical device to the List of Medical Devices for Exceptional Importation and Sale if the Minister has reasonable grounds to believe that there is a risk of injury to health from an actual or anticipated shortage; and
• Add new provisions after section 62.32 of these regulations to require the importer of a designated medical device to notify the Minister within 72 hours after the importer receives information or becomes aware that the medical device is no longer authorized for sale in the foreign jurisdiction.

Updates to reporting frameworks for drug and medical device shortages and discontinuations

These amendments would improve existing requirements for the reporting of drug and medical device shortages and discontinuations.

In the case of drugs, provisions would be added to require market authorization holders of drugs to provide earlier notice of their decision to discontinue a drug authorized for sale in Canada. The existing requirement at paragraph C.01.014.10(2) of the Food and Drug Regulations to report a discontinuation at least six months ahead of the discontinuation would be replaced with a requirement to report a discontinuation at least twelve months in advance of discontinuing sales. If the decision is made less than twelve months in advance, the discontinuation would be required to be reported within five days of the decision being made. This would provide interested parties like Health Canada, hospitals, clinicians, patients and industry with more advance notice of drug discontinuations and allow them to make appropriate transition plans. In addition, the requirement to update discontinuation reports within two days when information in the report changes would be extended to five days. This would provide drug market authorization holders with additional time to update their reports, now that discontinuation reports are required 12 months in advance.

In the case of medical devices, provisions would be added at section 62.221 of the Medical Devices Regulations to require manufacturers of specified Class I-IV devices and importers of specified Class I devices to establish and maintain documented procedures

• enabling them to monitor their ability to meet demand for the medical device in Canada;
• enabling them to identify when shortages of the medical device occur; and
• enabling them to provide shortage-related information to the Minister if the Minister requests it under section 62.26 of these regulations.

This would allow the department to efficiently monitor compliance with medical device shortage reporting requirements.

The proposed amendments would also clarify, simplify and refine existing shortage reporting requirements for manufacturers of specified Class I-IV medical devices and importers of specified Class I medical devices. These changes are intended to clarify regulatory requirements for regulated parties, simplify when a shortage needs to be reported and make the shortage reporting framework for medical devices less burdensome. The proposed amendments to the Medical Devices Regulations would

• Modify sections 62.23 and 62.25 of these regulations to require that medical device shortages be posted to a website operated by a third party instead of reporting to the Minister;
• Repeal the requirement at paragraph 62.23(1)(i) for manufacturers and importers to provide a summary of the information used to determine that a medical device shortage exists or is likely to occur;
• Require manufacturers and importers to report an actual or potential shortage of a specified medical device, even if they have a device that can be substituted for the medical device in shortage or for which a shortage is anticipated. This would provide Health Canada with additional shortage signals, as the availability of a substitute device does not always prevent or mitigate shortages. It would also provide stakeholders with greater clarity on when a report would be required;
• Revise timelines under subsection 62.23(4) to require manufacturers and importers to report medical device shortages at least six months ahead of the date on which a shortage is anticipated, or within five days of the date on which a shortage is identified;
• Revise timelines under section 62.241 for reporting medical device discontinuations. In the case that the decision is made to discontinue a medical device in more than 12 months, manufacturers and importers of medical devices would be required to report the discontinuation at least 12 months before the date of a discontinuation. If the decision is made to discontinue the sale of the medical device in 12 months or less, manufacturers and importers would be required to report the discontinuation within five days after the decision is made to discontinue the medical device. If the information in the report changes, manufacturers and importers would be required to make that update within five days;
• Require manufacturers and importers of medical devices to report all discontinuations of medical devices on the List of Medical Devices – Notification of Shortages, regardless of whether the discontinuation leads to an actual or anticipated shortage. Manufacturers and importers would be exempt from reporting medical device discontinuations if the manufacturer or importer of the discontinued medical device has replaced it with a new device that is authorized for sale in Canada and compatible with the discontinued device’s components, parts and accessories; and
• Clarify that the requirement to report a medical device discontinuation for the purpose of tracking shortages is separate from the requirement to report a discontinuation for the purpose of cancelling a medical device licence.

Regulatory development

Consultation

Stakeholder engagement

Since November 2022, Health Canada has sought feedback in various forums from a wide range of stakeholders affected by therapeutic product shortages. Taken together, the department has received feedback from industry, health care professionals, advocacy organizations, provincial/territorial governments, international regulatory counterparts, Indigenous groups and communities, academics, and members of the public. This feedback was received via the following sources:

• three Ministerial Roundtables held in fall 2022 focused on shortages of pediatric analgesics and antibiotics;
• various meetings of purpose-built stakeholder engagement networks like the Multi-Stakeholder Steering Committee on Drug Shortages, the Medical Device Shortages Multi-Stakeholder Committee, and the Health Products Supply Chain Advisory Committee;
• discussions and feedback from federal-provincial/territorial discussion tables focused on shortages, including the pan-Canadian Pharmaceutical Alliance, the Conference of Federal-Provincial/Territorial Deputy Ministers of Health, and the Federal/Provincial/Territorial Assistant Deputy Ministers Drug Shortages Table;
• discussions with international regulatory counterparts through the Global Regulatory Working Group on Drug Shortages and the International Medical Device Safety Meeting, as well as bilateral meetings with counterparts from Australia, the United States, the United Kingdom, Belgium, and France;
• more than 30 bilateral meetings with stakeholder groups representing industry, health care professionals and non-governmental organizations;
• five roundtable discussions between senior officials and stakeholder groups representing distributors, retailers, manufacturers, patient advocacy groups, health care professionals, and Indigenous groups; and
• bilateral meetings with Indigenous groups held in the summer and fall of 2023.

Public consultation

In summer 2023, Health Canada conducted a public consultation focused on identifying strategies to prevent drug and other health product shortages and mitigate their impacts. The consultation received over 160 submissions, including from industry (45%), the general public (22%), health care professionals (15%), patient advocacy groups (8%), not-for-profit organizations (6%), academia (3%), provinces and territories (1%), and Indigenous groups (1%). The percentages listed above do not add up to 100% due to rounding.

The department received feedback in four areas: improved communication and transparency, agile regulatory toolbox, greater supply chain visibility, and enhanced response to supply and demand. Much of the feedback received in the consultation proposed regulatory actions, including improvements in shortage reporting and commentary on strategies to prevent or address harms caused by shortages like shortage prevention and mitigation plans. In December 2023, Health Canada published a report summarizing feedback received from the public consultation.

In summer 2024, Health Canada conducted a public consultation on the proposed amendments. This proposal was also referenced in a four-year health product shortages plan published concurrently with the beginning of the consultation period in June 2024. The consultation received 38 submissions from industry (50%), health care professionals (18%), not-for-profit organizations (11%), the general public (8%), provinces and territories (5%), patient advocacy groups (5%), and academia (3%). Health Canada also administered a stakeholder survey to understand how the amendments could have a positive or negative impact on Canadian industry and health care professionals. The survey was sent to industry stakeholders and associations representing health care professionals, including importers, manufacturers, and pharmacist associations. The survey was distributed on June 25, 2024, and responses were submitted to Health Canada by July 25, 2024.

Regarding the proposed amendments to the Food and Drug Regulations, stakeholders were generally in favour of the requirements for earlier drug discontinuation reporting and for the expanded scope of the shortage regulations. Stakeholders noted that additional reporting requires resources, that it is not always possible to report discontinuations 12 months in advance and that two days is not enough time to make changes to shortage and discontinuation reports. Stakeholders were generally supportive of expiration date extensions and of the changes to the exceptional importation and sale framework. Some stakeholders expressed support for new requirements governing safety stocks, demand surge reporting, and shortage prevention and mitigation plans. Others noted that new requirements for holding safety stocks, shortage prevention and mitigation plans, and demand surge reporting could present significant administrative and financial burdens. Stakeholders also noted that safety stock requirements could lead to waste and that demand surge reporting could lead to noisy data on shortage signals.

This proposal was adjusted to respond to stakeholder feedback by providing additional time to make changes to discontinuation reports. As well, many aspects of the new obligations align with stakeholder comments and address some of their concerns. For example, the new requirements for shortage prevention and mitigation plans and demand surge reporting are targeted to a narrower scope of drugs that could present serious risk to human health when in shortage. The safety stock requirements are also further narrowed to drugs that could present serious and imminent risk to human health when in shortage. This further minimizes the burden so that it only applies to the market authorization holders of drugs that have the greatest risk of harm if in shortage.

Health Canada also received feedback on the proposed amendments to the Medical Devices Regulations. Industry stakeholders expressed concerns about the removal of the 30-day backorder exemption for shortage reporting and inclusion of all discontinuations as reportable, noting that these changes could result in unnecessary reporting. Health Canada responded to these comments by leaving the 30-day backorder exemption as it is in the existing regulations. As well, the parameters of discontinuation reporting were revised to help prevent unnecessary reports when an updated product would be made available. Specifically, all discontinuations would need to be reported unless the discontinued device would be replaced with a compatible version.

Modern treaty obligations and Indigenous engagement and consultation

The amendments are not expected to impact treaties with the Indigenous peoples of Canada. Health Canada conducted an initial assessment that examined the geographical scope and subject matter of the initiative in relation to modern treaties in effect and did not identify any potential modern treaty impacts.

Instrument choice

A range of regulatory and non-regulatory options were considered in the development of these amendments.

No regulatory action

A non-regulatory approach was considered where elements of this proposal would be advanced relying on enforcement discretion based on risk.

The term “enforcement discretion” refers to the discretion that public authorities have to choose which enforcement action, along a continuum, will best address a particular situation in light of their statutory mandate. There are a range of actions that may be reasonably taken by a regulator in response to a particular situation based on prioritization of resources and/or relying on a risk-based approach. Health Canada’s enforcement discretion is exercised in accordance with its protection of health and safety statutory mandate under the Food and Drugs Act. On a case-by-case basis, Health Canada may deprioritize the enforcement of certain provisions where there is a pressing public health need and where the risks of doing so are low or can be appropriately mitigated.

This approach was rejected on the basis that routine use of enforcement discretion can undermine principles of transparency and predictability in the application of regulations. Also, this approach would not encourage the development of tools that are useful to help prevent and mitigate shortage risks.

Voluntary action by stakeholders

Under this approach, Health Canada would rely only on stakeholder action to reduce the risk of shortages. The department would use guidance to inform regulated parties on how to develop and maintain shortage prevention and mitigation plans, would encourage regulated parties to provide more timely reports of shortages and discontinuations, and would encourage distributors to report surges in demand to Health Canada.

This approach was rejected because key elements of this proposal would not have been feasible under a non-regulatory approach:

• Regulatory action is needed to require the use of safety stocks for drugs for which a failure to do so could cause serious and imminent harm to people in Canada if those drugs went into shortage. A voluntary approach would likely result in a patchwork system that would not adequately protect people in Canada from harm.
• Demand surge reporting by distributors could be encouraged without regulatory action but the reliability of these reports would be uncertain.
• A guidance-based approach would not be appropriate to address issues in shortage reporting for medical devices, since this would involve instructing regulated parties to act in ways contrary to the regulations.

Broad-based regulatory approach for drugs

A broad-based regulatory approach was considered, where regulatory requirements would be framed to apply broadly without regard for the specific characteristics of therapeutic products.

Under this model, the department would require market authorization holders, importers, and wholesalers of all drugs to establish risk management systems specifically focused on identifying, assessing, and addressing shortage risks. The requirement would allow regulated parties to tailor their systems to their position and role in the supply chain but would apply without regard for whether a shortage of a drug poses a serious risk of injury to health. This approach would not require regulated parties to maintain safety stocks but would require regulated parties to consider whether safety stocks are an appropriate measure to mitigate risk.

Under this approach, regulatory provisions related to shortage reporting, shortage prevention and mitigation plans, and the prohibition against selling drugs outside of Canada if it could cause or exacerbate a shortage, would apply to all drugs marketed for sale in Canada, including over-the-counter drugs.

Under this approach, provisions related to medical devices would be retained in the form specified in this proposal.

This approach was rejected on the basis that it would be excessively burdensome to industry and Health Canada to implement on a large scale, especially for drugs that would not pose a serious risk of injury to health if in shortage. The department determined that a more targeted approach is needed to allow both the department and regulated parties to target their efforts based on risk.

Selected regulatory approach

The preferred option of regulatory amendments would introduce new obligations in a targeted way to the drugs that have the highest risk of injury to health when in shortage. This model would allow Health Canada to enforce compliance with specific actions that reduce the likelihood of shortages that pose a serious risk of injury to health or a serious and imminent risk of injury to health.

These amendments would also improve and expand the tools available to Health Canada to respond to a shortage.

Regulatory analysis

Benefits and costs

This section provides a description of the methodology used in the cost-benefit analysis, as well as a quantitative and qualitative depiction of the estimated costs and benefits due to the regulatory proposal. A full cost-benefit analysis report is available upon request by writing to hpsdpdcorr-corrdgppsdp@hc-sc.gc.ca.

Baseline scenario versus regulatory scenario

The estimated costs and benefits of the proposed amendments are determined by incremental differences between two future scenarios: one where the current regulatory framework (baseline scenario) does not change versus one where this proposal comes into force (regulatory scenario). The purpose of the cost-benefit analysis is to compare the regulatory scenario against the baseline scenario and estimate the costs and benefits for three stakeholder groups: industry, the government of Canada, and people in Canada.

In the baseline scenario, there are currently no requirements for drug market authorization holders to retain safety stocks in Canada for the drugs they sell. In the proposed regulatory scenario, market authorization holders of specific drugs that could pose a serious and imminent risk of injury to human health if in shortage would be required to maintain three months of safety stock.

In the baseline scenario, there are currently no requirements in Canada for organizations to have drug-specific shortage prevention and mitigation plans. In the proposed regulatory scenario, market authorization holders of drugs that could pose a serious risk of injury to human health if in shortage would be required to develop shortage prevention and mitigation plans for these drugs and review their plans every three years. In addition, importers and wholesalers of these drugs would now be required to track and report to Health Canada if a drug has a 250% increase in sales, over its sales in the same month of the previous calendar year.

In the baseline scenario, the Minister’s options are limited when responding to shortages. The proposed amendments would empower the Minister to increase the supply of drugs available to address a shortage by extending the expiration dates for lots or batches of drugs in certain circumstances. In addition, the Minister would have the ability to expand the scope of drugs that would be subject to the regulations governing shortages, like over-the-counter drugs, to include these drugs in the shortage framework, including requirements for shortage reporting.

Manufacturers of Class I to IV medical devices or importers of Class I medical devices that have a device on the List of Medical Devices – Notification of Shortages are currently not required to have documented procedures in place to track and report medical device shortages to Health Canada. These organizations would now be required to establish and maintain documented procedures to monitor their ability to meet demand, identify medical device shortages, and report medical device shortages and discontinuations.

In the baseline scenario, the exceptional importation and sale frameworks for drugs is limited. In the proposed regulatory scenario, updates to the drug exceptional importation framework would allow the department to broaden the scope of products and circumstances the framework can be applied to. This would allow Health Canada more flexibility when using these frameworks to prevent and mitigate shortages of drugs.

Lastly, drug shortages and discontinuations are currently being reported to a website operated by a third party, while medical devices shortages and discontinuations are being published on a Health Canada website. In the proposed regulatory scenario, the third-party operated website would be expanded and updated to include medical device shortage and discontinuation reporting.

Key assumptions:

• all costs and benefits are presented in 2024 dollars;
• a discount rate of 7% is used in the analysis; and
• the analysis evaluates the costs and benefits over 10 periods of 12 months and thus, the study period begins immediately following registration of the regulations.

Data collection

In June 2024, Health Canada distributed two targeted drug and medical device external stakeholder surveys to all drug establishment licence, drug identification number, medical device establishment licence, and medical device licence holders to determine the impact of some of the proposed amendments. Health Canada received 89 survey responses from stakeholders in the drug industry and 346 survey responses from stakeholders in the medical device industry. The responses from these external stakeholder surveys have aided Health Canada in estimating the benefits and costs of the proposed amendments.

Health Canada also used previous external stakeholder questionnaires and supplemented the analysis with previous survey findings to reduce the number of requests to industry.

The number of drugs that could meet the different thresholds of risk of injury due to a shortage are outlined below. Each authorized drug product sold in Canada is assigned a drug identification number to uniquely identify each product and differentiate between doses, manufacturers or other characteristics. As such, there may be multiple authorized drugs that have the same medicinal ingredient and route of administration, but different drug identification numbers. The impact of this proposal is calculated based on the number of drugs specified at the level of drug identification number (DIN-drug) that would be in scope of each measure used in the cost-benefit analysis. Health Canada used previous shortage experience and its internal database to determine the number of additional DIN-drugs that could pose a risk of injury to human health if in shortage. The DIN-drugs that could meet the criteria for serious risk of injury to human health were determined using the initial list generated through a rigorous process to identify clinical risk, based on medicinal ingredient and route of administration, and matched to Health Canada’s internal drug identification number database. The number of DIN-drugs that could be subject to the safety stock requirements is based on a subset of drugs in Health Canada’s initial Critical and Vulnerable Drugs List that also meet the criteria for serious and imminent risk of injury to human health if in shortage.

Table 1: Estimated number of drugs in scope

Risk category	Estimated number of drugs (medicinal ingredient / route of administration)	Estimated number of DlN-drugs table b1 note a	Source
Drugs that could pose a risk of injury to human health if in shortage that are currently out of scope of the shortages regulations (e.g. over-the-counter)	Up to 12	75	Experience with past shortages and clinical expert opinion matched to the drug identification number database
Drugs that could pose a serious risk of injury to human health if in shortage	Up to 275	1 380	Ranking of clinical importance through expert-led process matched to the drug identification number database
Drugs that could pose a serious and imminent risk of injury to human health if in shortage	Up to 70	425	Experience with past shortages and clinical expert opinion matched to the drug identification number database
Table b1 note(s) Table b1 note a DIN-drug refers to the number of uniquely identified drug products authorized for sale in Canada that are described by the listed medicinal ingredient / route of administration. Return to table b1 note a referrer

Costs to industry

Cost to accumulate and maintain safety stocks

Organizations that manufacture drugs that could pose a serious and imminent risk of injury to human health if in shortage would be required to hold three months of safety stock based on their average monthly demand of the drug. It is estimated that there could be around 425 DIN-drugs that meet this definition. However, it would not apply to DIN-drugs where it is not possible to hold a safety stock of three months due to the nature of the drug. It was determined, through an external survey, that approximately 5% of the 425 DIN-drugs (21 DIN-drugs) would not be subject to the safety stock requirements. Therefore, the estimated number of DIN-drugs that could be required to maintain three months of safety stock would be 404 DIN-drugs (425 DIN-drugs – 21 DIN-drugs).

The external survey was also used to determine the average cost per drug associated with accumulating enough safety stock to be in compliance with the new safety stock regulations which was estimated to be approximately $86,000 per drug. The total one-time cost to industry to initially accumulate safety stock is estimated to be $34.7M (404 DIN-drugs * $86,000).

It is expected that there would be additions to the Safety Stock List, but these changes are expected to be minor as this list is designed to be stable once established. It is expected that the majority of changes would be due to new products entering the market and it is assumed that this list would grow proportionally to the number of newly marketed DIN-drugs for sale in Canada. Clinical guidelines on the use of medications tend to be updated every three to five years and are not expected to result in major changes to the number of drugs on the Safety Stock List but may lead to new drugs being added to replace other drugs that are removed. Using this assumption and data from Health Canada’s Drug Product Database on the number of newly marketed drugs each year from 2013 to 2023, it is estimated that, on average, there are approximately 700 new marketed DIN-drugs each year. It is assumed that the ratio of drugs that pose a serious and imminent risk of injury to human health if in shortage is 3% (404 DIN-drugs / 12 000 total DIN-drugs). Therefore, applying this percentage to the number of newly marketed drugs results in approximately 21 drugs (700 new marketed DIN-drugs per year * 3%) added to this list each year and an ongoing cost of $1.8M per year (21 new DIN-drugs * $86,000) for these drugs to accumulate safety stock.

The total cost for industry to accumulate safety stock is estimated to be $43.4M PV discounted at 7% per year over ten years.

The increased safety stock from the 404 DIN-drugs would also generate an increase in storage costs that would be ongoing. It was determined that the increased storage cost would be approximately $260 per DIN-drug based on the external stakeholder survey. The total estimated annual cost of increased storage is expected to be $105,000 (404 DIN-drugs * $260 per drug). Further, the additional 21 (700 DIN-drugs * 3%) new DIN-drugs per year as determined above would also be expected to have an ongoing storage cost of $260 per drug per year. This would result in an ongoing cost of $5,460 per year (21 new DIN-drugs * $260). Therefore, the total storage cost for industry to maintain safety stocks is estimated to be $770,000 PV discounted at 7% per year over ten years.

Organizations would also be required to maintain safety stock records for a period of three years. It is assumed that the information is readily available, and the only increased cost would be the storage of the records for three years. It is further assumed that maintaining records for an organization would take around one extra hour of a regulatory affairs employee’s time as well as additional cloud storage costs each year, which would cost an organization approximately $52 per year. This results in an estimated annualized cost of $47,000 or $330,000 PV discounted at 7% per year over ten years.

Overall, the cost of introducing safety stock provisions is expected to be $44.5M PV discounted at 7% per year over ten years.

Cost of shortage prevention and mitigation plans

The proposed amendments would require market authorization holders of DIN-drugs that could pose a serious risk of injury to human health if in shortage to develop shortage prevention and mitigation plans for each of those DIN-drugs and to review these plans every three years.

According to the external survey, approximately 30% of DIN-drugs that pose a serious risk of injury to human health if in shortage already have shortage prevention and mitigation plans in place for their drugs and since there are estimated to be around 1 380 DIN-drugs that could pose a serious risk of injury to human health if in shortage (see Table 1), there are approximately 966 DIN-drugs (1 380 DIN-drugs * 70%) that do not already have a shortage prevention and mitigation plan in place. It would cost organizations around $15,200 per DIN-drug to create a new shortage prevention and mitigation plan, based on the external survey. It is expected the one-time cost to industry to have shortage prevention and mitigation plans in place for DIN-drugs that could pose a serious risk of injury to human health if in shortage would be approximately $14.7M ($15,200 * 966 DIN-drugs).

In addition, there is expected to be an ongoing cost for new DIN-drugs each year that meet the threshold of posing a serious risk of injury to health if in shortage. Using the same methodology as described for safety stock, it is estimated that approximately 11% of drugs (1 380 DIN-drugs/ 12 000 total DIN-drugs) could pose a serious risk of injury to human health if in shortage and it is therefore estimated that approximately 77 new DIN-drugs (11% * 700 new marketed DIN-drugs) would meet the risk threshold each year resulting in an ongoing cost of $1.2M (77 new DIN-drugs * $15,200) per year for the holders of these DIN-drugs to develop shortage prevention and mitigation plans.

Under the proposed amendments, market authorization holders of all 1 380 DIN-drugs that would meet the threshold of posing a serious risk of injury to health if in shortage would be required to review their plans every three years or when there is a significant change to the safety profile of their drug, whichever is sooner. It is assumed that market authorization holders of all 1 380 DIN-drugs would need to review their plans, and that one-third of the plans would be reviewed each year. It is further assumed that the cost of reviewing the plans would be around $7,600, or half of the cost of creating a new plan. Therefore, it is expected that reviewing shortage prevention and mitigation plans would cost organizations around $3.5M each year or $21.3M PV over the 10-year period, discounted at 7% per year.

Therefore, the overall cost for industry to develop and review shortage mitigation and prevention plans is estimated to be $42.1M PV discounted at 7% per year over ten years.

Cost to set up a demand surge reporting system for importers and wholesalers

Organizations that import or wholesale drugs that could pose a serious risk of injury to human health if in shortage would be required to report to the Minister of Health if a drug has a 250% increase in sales over its sales in the same month of the previous calendar year. For example, if an organization’s monthly sales in February 2024 is 250% higher than the sales volume in February 2023, an organization would be required to report the increased demand to the Minister.

The external survey suggests that 39% of respondents reported selling a DIN-drug that could pose a serious risk of injury to human health if in shortage and being an importer or wholesaler, but not a fabricator or distributor. Since there are approximately 1 500 drug establishment licence holders, it is estimated that 585 drug establishment licence holders (1 500 drug establishment licence holders * 39%) would be required to report increases in year-over-year demand. Approximately 65% of respondents to the survey indicated that they already have a system in place and could track and report a 250% increase in sales volume. This results in 205 drug establishment licence holders (585 drug establishment licence holders * 35%) that would need to update their systems at an estimated cost of $61,000 based on survey responses.

This results in an estimated one-time cost of $12.5M (205 drug establishment licence holders * $61,000) for importers and wholesalers who are not fabricators or distributors to update their systems to be able to track and report a 250% increase in year-over-year sales volumes.

In addition, it is expected that there would be an ongoing cost for new drug establishment licence holders (importers and wholesalers) with DIN-drugs that could present a serious risk of injury to human health if in shortage. It is estimated that, on average, there are approximately 47 new drug establishment licence applications per year, based on Health Canada internal data.

Using the previous methodology, it is estimated that approximately 18 (47 drug establishment licence applications * 39%) of the new drug establishment licence applications would be for either an importer or wholesaler. It is further estimated that approximately six drug establishment licence holders each year (18 new drug establishment licence holders * 35%) would need to update their systems to be able to track and report a 250% increase in year-over-year sales, which results in an ongoing cost of $366,000 (6 new drug establishment licence holders * $61,000).

Therefore, the total costs to industry to set up demand surge reporting systems is estimated to be $13.9M PV discounted at 7% per year over ten years.

Cost of demand surge reporting for importers and wholesalers

It is challenging to estimate how many times an organization has experienced a 250% increase in demand year over year since this has never been a requirement. However, a study published by the Patented Medicine Prices Review Board (September 2022) mentions “In 13% of reports (to www.drugshortagescanada.ca), the reason for shortage was cited as ‘demand increase for the drug,’ the only demand-side cause available in the reporting template.”

There are, on average, 1 788 shortages reported to Health Canada per year by market authorization holders, with the number of shortages slightly decreasing over time. It is assumed that 13% of these shortages were due to demand increases, based on the Patented Medicine Prices Review Board publication. It is also assumed that the 13% would represent the number of times per year that a DIN-drug would have a 250% increase in demand resulting in an estimated 232 (1 788 shortages * 13%) shortages due to demand. This estimate may be high since not all shortages caused by demand increases would necessarily have a 250% year-over-year increase in demand. Conversely, this estimate could also be low since there may not be a shortage when there is a 250% increase in demand.

While the above estimates the number of times per year market authorization holders would have an increase in demand, it does not capture all organizations that would now be required to report a 250% increase in demand to Health Canada as it is only a requirement for importers and wholesalers of those DIN-drugs. It is assumed that for each demand increase there would be more than one importer or wholesaler per DIN-drug, which would need to report a 250% increase. The external survey was used to determine the ratio of importers and wholesalers who are not market authorization holders (drug identification number holders) to market authorization holders which was found to be approximately 1.4 importers or wholesalers per market authorization holder. This results in 325 shortage reports (1.4 * 232 shortages due to demand) submitted by importers or wholesalers to Health Canada because of the new requirement.

It is expected that the cost of reporting demand increases to Health Canada would be similar to the cost of reporting shortages. A United States government report on the cost of reporting shortages or discontinuations of drugs estimated the cost to be approximately $315 per notification. Therefore, the cost to importers and wholesalers who are not fabricators or distributors to report 250% year-over-year increases in demand to Health Canada is $102,000 per year (325 shortage reports * $315) starting in year two or $621,000 PV discounted at 7% per year over ten years.

Overall, the cost to set up demand surge reporting systems and to report demand surges is expected to cost organizations around $14.5M PV discounted at 7% per year over ten years.

Cost to establish documented procedures for medical device shortage reporting

Currently, manufacturers of Class I to IV devices or importers of Class I devices that have a device on the List of Medical Devices – Notification of Shortages are not required to have documented procedures in place to track and report medical device shortages to Health Canada.

Under the proposed amendments, it is expected that manufacturers of Class I to IV medical devices and importers of Class I devices selling a device on the List would need to have these procedures in place. It is expected that around 40% of organizations already have documented procedures in place based on the external survey.

Therefore, it is estimated that 60% of specified medical device licence holders would have to put these documented procedures in place. It is estimated that there are approximately 2 159 medical device licence holders resulting in 1 295 (2 159 * 60%) that would need to have documented procedures.

It is anticipated that organizations would incur a cost of approximately $6,500 per organization to establish these procedures based on the external stakeholder survey. Therefore, for the 1 295 organizations, the total one-time cost to industry is expected to be around $8.4M ($6,500 * 1 295 medical device licence holders) in the first year.

In addition, there is expected to be an ongoing cost for new organizations that enter the market to establish these procedures. It is estimated that there will be approximately 80 new entrants each year, on average (2014–2019), that would need to establish these procedures, resulting in an ongoing cost of $520,000 per year (80 new entrants * $6,500 per organization).

Overall, it is expected to cost medical device establishment licence holders approximately $11.0M PV to establish documented procedures discounted at 7% per year over ten years.

Cost for over-the-counter drugs that are exceptionally imported to include information that allows for safe use

Over-the-counter drugs could be added to the List of Drugs for Exceptional Importation and Sale under the proposed amendments. Importers of over-the-counter drugs that are exceptionally imported would be required to include information allowing for the safe use of the drug as part of the exceptional importation and sale framework. It is assumed that, in most cases, this would be in the form of a single sheet of printed paper that is assumed to cost $0.33 per unit.^{footnote 33}

When the exceptional importation and sale framework was formalized in 2020, over-the-counter drugs were not included in the framework. Between that time and 2024, one shortage of an over-the-counter drug posed sufficient harm to people in Canada that Health Canada allowed foreign authorized products to be exceptionally imported and sold to mitigate the shortage. As there has been one shortage over a four-year period, it is assumed that one of these shortages will happen every four years.

During that specific shortage, Health Canada allowed for 12 over-the-counter products for exceptional importation and sale, in respect of which 4.4 million units were imported into Canada.^{footnote 34} As previously mentioned above, Health Canada assumes that each unit of product sold would have to have a single sheet printed with the product to indicate information regarding the safe use of the product. Therefore, it is estimated that during one of these shortages, the annual cost for industry would be approximately $1.4M. However, since the timing of one of these events is unknown, the cost has been spread over the four-year period to account for uncertainty. Therefore, the annualized cost of this amendment is expected to be approximately $333,000 per year.

Overall, including information to allow for safe use of a product is expected to cost organizations around $2.3M PV over the ten-year period, discounted at 7% per year.

Cost of increased reporting due to removal of medical device exemptions

Currently, if an organization has a medical device named on the List of Medical Devices – Notification of Shortages, they may be eligible for an exemption from medical device shortage reporting if the organization has a substitute medical device available. The proposed amendments would remove this exemption, and organizations would now have to report shortages even if they have a substitute medical device available.

It is challenging to accurately estimate the number of past exemptions, since the exemptions are determined by organizations and do not require submitting an application to Health Canada if the medical device is on the List of Medical Devices – Notification of Shortages. However, responses to an external survey and consultation with programs suggest that the number of shortages reported could be as high as four times the amount currently submitted. Internal data reveals that there are around 100 medical device shortages reported each year, on average. Therefore, Health Canada anticipates that the average number of reports it receives would grow from approximately 100 per year to around 400 per year, resulting in an additional 300 reports per year.

Using the previous estimate of $315 to report a shortage, it is expected that the total annual cost to the industry for reporting these shortages is approximately $94,500 per year (300 medical device reports * $315). The shortage and discontinuation framework would come into force one year after the regulations are registered, resulting in the associated cost beginning in the second year after registration.

Overall, it is expected that medical device establishment licence holders would incur an overall cost of $575,000 PV discounted at 7% per year over ten years. The requirement to report is not being done to demonstrate compliance with another requirement, so it is not considered an administrative burden for the purposes of the one-for-one rule.

Cost of serious adverse drug reaction reporting

Importers of exceptionally imported drugs currently do not have to report serious adverse drug reactions. The proposed amendments would require importers of exceptionally imported drugs to inform Health Canada if they become aware of a serious adverse drug reaction that has been reported in another jurisdiction related to the exceptionally imported drug. Based on data collected as part of the Regulations Amending the Food and Drug Regulations and the Medical Device Regulations (Serious Adverse Drug Reaction Reporting - Hospitals), the administrative cost to provide each serious adverse drug reaction report is $341 and is reflected in the “One-for-one rule” section below.

Market authorization holders currently submit an average of 900 000 serious adverse drug reaction reports annually (including both domestic and foreign reported serious adverse drug reactions) for roughly 20 000 DIN-drugs; an average of 11 serious adverse drug reactions occur globally per DIN-drug. Expanding the scope by requiring the submission of a serious adverse drug reaction report for drugs that may be exceptionally imported is anticipated to increase this average by 218 serious adverse drug reactions each year. Therefore, this amendment is expected to cost the industry around $74,000 within a given year. However, to account for the six-month transition period related to the exceptional importation and sale framework, the first-year costs are expected to be half the per year value. Therefore, the total cost to industry to report serious adverse drug reaction reports is expected to be $487,000 PV discounted at 7% per year over ten years.

Cost of reporting for over-the-counter drugs subject to shortage reporting regulations

All market authorization holders that sell controlled substances on Schedules I to V of the Controlled Drugs and Substance Act, prescription drugs on the Prescription Drug List, radiopharmaceuticals in Schedule C of the Food and Drugs Act, biologics in Schedule D of the Food and Drugs Act and drugs that are permitted to be sold without a prescription but are administered only under the supervision of a practitioner are required to report shortages to a third-party website operating under contract to Health Canada. Over-the-counter drugs that would fit the definition of drugs that could pose a risk of injury to human health if in shortage could now be subject to shortage reporting if specified on a list incorporated by reference into the regulations.

Health Canada programs have estimated that approximately 75 over-the-counter DIN-drugs could be included on an incorporated-by-reference list and be required to report if in shortage. Currently, approximately 29% of drugs subject to the shortage reporting requirement are reported to be in shortage each year. Applying the same ratio to the 75 over-the-counter DIN-drugs results in 22 new shortage reports (75 DIN-drugs * 29%). Therefore, the total ongoing cost to industry for new drugs subject to the shortage regulations is approximately $6,900 per year (22 new shortage reports * $315 per report). However, to account for the six-month transition period for the proposed amendments related to expanding the scope of the shortage regulations, the first-year costs are expected to be half the per year value. Therefore, the total cost to industry for the shortage reporting of new drugs subjected to the proposed shortage requirements is $45,000 PV discounted at 7% per year over ten years. The requirement to report is not being done to demonstrate compliance with another requirement, so it is not considered an administrative burden for the purposes of the one-for-one rule.

Exceptional importation — reporting information in respect of any serious risk of injury to human health associated with foreign regulatory actions

Manufacturers of prescription drugs are currently required to notify Health Canada of any information they receive or become aware of (that applies to a product sold in Canada and represents a serious risk) with respect to risks identified in specified foreign jurisdictions, and within 72 hours of the moment they become aware of it. This information on foreign action includes risk communications issued, changes to label requested, recalls, reassessments, suspensions, and revocations of authorization by the regulatory authorities specified. The proposed amendments would require importers to also disclose such foreign actions to Health Canada concerning exceptionally imported drugs.

Internal data indicates that 20% of all prescription drugs listed on Health Canada’s Prescription Drug List involve industry submitting notifications of foreign action to Health Canada. There are currently 20 active drugs on the List of Drugs for Exceptional Importation and Sale, suggesting that four will likely submit a notification of foreign action. Industry previously indicated that this activity costs an average of $1,573 per notification. Therefore, the annual cost to the industry is expected to be around $6,300 per year.

Overall, it is expected that notifying Health Canada of foreign decisions would incur an overall cost of approximately $41,000 PV discounted at 7% per year over ten years.

Notification of cancellation for exceptionally imported medical devices

The current exceptional importation scheme does not require importers of exceptionally imported medical devices to notify Health Canada if the exceptionally imported device is no longer authorized for sale in another jurisdiction. The proposed amendments would require importers to disclose such foreign actions to Health Canada concerning exceptionally imported medical devices. Unlike drugs, Health Canada does not have consistent information on the frequency of imported medical devices losing their authorization in a foreign jurisdiction. Therefore, it is assumed that the frequency of foreign actions used for the exceptional importation of drugs, which is 20% of exceptionally imported drugs, can be applied as a proxy to exceptionally imported medical devices that would be required to notify Health Canada of such a foreign action.

There are around 25 medical devices per year that are on the List of medical devices for exceptional importation and sale, suggesting that five would likely submit a notification of a foreign action. Industry previously indicated that this activity costs an average of $1,573 per notification. Therefore, the annual cost to industry is expected to be around $8,000 per year.

Overall, it is expected that notifying Health Canada of a foreign decision to cancel a medical device licence would incur an overall cost of approximately $52,000 PV discounted at 7% per year over ten years.

Advanced reporting of discontinuations

The proposed amendments intend to expand the current discontinuation reporting requirement from six months’ advance notice to 12 months’ advance notice. Currently, some market authorization holders may wait to report until a planned discontinuation is six months away. Under the proposed amendments, market authorization holders may see an increase in compliance costs due to early reporting, but this cost to industry is expected to be low if not negligible. Organizations are still currently required to report discontinuations, so while the timing of the burden has changed, the burden itself has not.

Extension of expiry dates

When there is a significant shortage, Health Canada works with industry to mitigate the impacts and increase the available supply of the drug, which could involve the extension of expiry dates. These regulatory amendments would formalize what is already being done. In addition, product information that is reviewed by Health Canada to extend the expiry dates is usually readily available to the manufacturer. Therefore, it is assumed that additional costs to industry would be minimal.

Costs to government

Compliance and enforcement

The proposed amendments are expected to increase compliance and enforcement activities. It is estimated that the increased activities would cost Health Canada approximately $162,000 per year beginning in year two or $987,000 PV discounted at 7% per year over ten years.

Expansion of the third-party website

Currently, drug shortages and discontinuations are reported on a third-party website that is funded by the federal government. The proposed amendments would require medical device shortage and discontinuation information to be submitted to the same third-party website. The website’s contracted cost of developing the medical device portion of the third-party website is expected to cost approximately $500,000 and an increase of $9,400 per year to the cost of the contract.

In addition, Health Canada is expected to incur a cost of approximately $84,000 per year over the first two years in full-time equivalent costs and then starting in year three approximately $42,000 per year in full-time equivalent costs to integrate enhancements and changes during the initial setup and over time.

Overall, the cost of establishing and maintaining the third-party website is expected to be $906,000 PV discounted at 7% per year over ten years.

Government review of demand surge reporting

The proposed amendments related to demand surge reporting for wholesalers and importers are expected to increase the amount of shortage signals that Health Canada receives. For each demand report that Health Canada receives, it is expected that it would cost the department around $300 to review the report and follow up with the wholesaler or importer. As previously estimated, it is expected that Health Canada would receive approximately 325 demand reports per year due to the proposed amendments related to demand surge reporting for importers and wholesalers. Therefore, the total cost per year is estimated to be approximately $97,500 (325 demand surge reports * $300). This cost is expected to begin in year two due to the one-year transition period for the proposed amendments related to demand surge reporting.

Overall, review of the demand reports is expected to cost Health Canada around $601,000 PV discounted at 7% per year over ten years.

Cost of reviewing safety stocks quantity reduction requests

Some market authorization holders that sell DIN-drugs that pose a serious and imminent risk to health if in shortage may not be able to hold three months of safety stock due to the nature of the drug. Some of these drugs may have short expiry dates that are less than three months or have other reasons that make it impractical to hold a safety stock in the default quantity. It is expected that organizations in this scenario would submit a request to Health Canada to hold less than three months’ safety stock.

It is expected that Health Canada would incur some costs to process requests to hold less than three months of safety stock, and to review reports when an organization’s safety stock levels fall below prescribed levels. It is anticipated that it would cost Health Canada approximately $74,000 per year to review the information submitted and provide a decision on the quantity of safety stock that would be required. It is expected that there would be no cost in the first year and half the cost in the second year, due to the 18-month transition period for the proposed amendments related to safety stocks.

Overall, it is expected that the review of this safety stock information and to provide a decision would cost Health Canada $448,000 PV discounted at 7% per year over ten years.

Cost to establish and maintain lists incorporated by reference

Health Canada is expecting to establish new incorporation-by-reference lists that would require website development. Health Canada expects to incur a one-time cost of around $15,000 per list incorporated by reference to establish the list and then an ongoing cost of around $10,000 per year to maintain a list.

Therefore, since three lists incorporated by reference are expected to be established for the proposed amendments, Health Canada estimates that the lists incorporated by reference would have a one-time cost of around $45,000 to establish the lists and $30,000 ongoing to maintain the lists.

Overall, it is expected that the lists incorporated by reference would cost Health Canada $225,000 PV discounted at 7% per year over ten years.

Cost to review shortage prevention and mitigation plans

Health Canada expects to review the availability and appropriateness of shortage prevention and mitigation plans and would review shortage prevention and mitigation plans when a shortage is reported. This activity is expected to cost $78,000 per year beginning in year two or $472,000 PV discounted at 7% per year over ten years.

Cost to evaluate serious adverse drug reaction reporting

Health Canada currently does not require importers of exceptionally imported drugs to report serious adverse drug reactions. The proposed amendment would require importers of exceptionally imported drugs to inform the Minister if they become aware of a serious adverse drug reaction that has been reported in another jurisdiction related to the exceptionally imported drug.

Health Canada is expected to incur a cost of $40,000 per year to evaluate adverse drug reaction reports from exceptionally imported products. However, to account for the six-month transition period for the proposed amendments related to the exceptional importation and sale framework, the first-year costs are expected to be half the per year value. Overall, it is expected that the cost of evaluating additional adverse drug reaction reports is $266,000 PV discounted at 7% per year over ten years.

Cost of adding drugs on the exceptional importation framework

The Minister would be able to add any drug to the List of Drugs for Exceptional Importation and Sale if the shortage or risk of shortage of another drug causes a risk of injury to human health and the drug to be added to that list can be substituted for the drug in shortage or causing risk. The proposed amendments broaden the scope of the drugs that can be brought in through the exceptional importation framework, including over-the-counter drugs.

Since the beginning of the COVID-19 pandemic, Health Canada has seen an increase in the number of health product risk communications and patient safety reviews conducted related to drug shortages. Expanding the scope of drugs that can be listed for exceptional importation could increase the frequency of Health Canada conducting health product risk communications and patient safety reviews; however, the number of drugs newly in scope that could be added to the List of Drugs for Exceptional Importation and Sale is expected to be negligible. Therefore, no incremental costs are assumed.

Benefits to industry

Benefit from sale of drugs under exceptional importation

The proposed amendments pertaining to the exceptional importation and sale of specified drugs are expected to expand the number of foreign authorized products an organization would be able to sell, allowing industry to increase its supply of products and revenues, should an organization propose to sell foreign authorized products in response to a shortage.

Exceptional importation would have positive net benefits for industry, assuming organizations choose this option since exceptional importation is a voluntary mechanism to sell drugs and medical devices, and therefore industry stakeholders would only use this option if they expect it to be profitable.

Benefits to government

Shortage reporting on a third-party website

Reporting medical device shortages to a third-party website is expected to benefit Health Canada by automating the collection and reporting of shortages. An internal survey determined the average amount of time that Health Canada is expecting to save from no longer performing extensive reviews that are required when reporting directly to Health Canada, which was estimated to be 37.2 hours per report on average.

It was previously estimated that Health Canada receives approximately 100 medical device shortage reports per year on average. This results in a cost savings of approximately $283,000 per year beginning in year two.

Overall, it is expected that the savings from automating the collection and reporting of medical device shortages would be $1.7M PV discounted at 7% per year over ten years.

Benefits to people in Canada

It is expected that the proposed amendments would benefit people in Canada by helping to prevent and mitigate drug and medical device shortages in Canada.

In the case of drugs, it is expected that the most significant benefit from these regulations would be from the reduction in overall harm due to shortages of drugs which, if in shortage, would cause either serious risk of injury to health or serious and imminent risk of injury to health.

In the case of medical devices, it is expected that the major benefit of these amendments would be from improvements to shortage reporting supporting earlier action to mitigating the impacts of shortages.

Improvement in quality-adjusted life years (QALY) related to safety stocks

It is expected that the proposed amendments governing the use of safety stocks for drugs that could present a serious and imminent risk of injury to human health would help prevent and mitigate shortages and reduce harm to people in Canada.

The benefits of safety stocks as a form of safeguard against supply chain issues (e.g. shipping delays, spikes in demand, etc.) have been documented. Under the proposed amendments, safety stocks would benefit Canadians in the case of a shortage by helping to avoid a complete stockout while shortage mitigation measures are developed and implemented.

Considering the scope of the proposed amendments, these benefits would be positive for Canadians.

Health Canada estimates that an average of 88 000 patients will get a prescription for a DIN-drug that could pose a serious and imminent risk of injury to human health if the drug were in shortage. The average duration of a drug shortage in Canada is around 98 days or approximately 27% of a year. Therefore, it is estimated that for each DIN-drug that is in shortage, an estimated 24 000 patients (88,000 patients *~27% likelihood of being impacted by a shortage) would be affected in the first year (assuming these prescriptions are evenly prescribed throughout the year). Furthermore, it is estimated that the patient population will grow over time at 1% per year, based on Statistics Canada projected Canadian population growth.^{footnote 35}

In Canada, the value of a statistical life (VSL) for use in economic analysis is set by the Treasury Board Secretariat at $6.4 million in 2007 dollars. Adjusting for inflation, the VSL in 2024 dollars would be equivalent to $9.3 million using the consumer price index.^{footnote 36} While there is some general evidence that as people in Canada get older, they are prescribed more drugs, it is assumed for this analysis that the average age of a person affected by a drug shortage would be equivalent to the average age of people in Canada (41 years).^{footnote 37}

Using the average life expectancy in Canada (82 years),^{footnote 38} assuming the average age of a patient (41 years) receiving a drug considered to pose a serious and imminent risk of injury to human health if in shortage, and applying a 7% discount rate, the value of a statistical life year (VSLY) for the average person in Canada receiving drugs in shortage is estimated to be $649,000 in 2024 dollars.

This value can be further broken down to determine the quality adjusted life year (QALY), which is a concept used in health economics to account for the fact that all years of life lived may not be equal due to illness experienced across the life span.

It is assumed that a benefit of mitigating or preventing shortages would be that some people in Canada would avoid needing to switch their usage of an optimal drug to an alternative drug. In other words, the current baseline is that those people in Canada that are affected by a shortage are required to take an alternative drug that is likely less optimal, because their original drug is in shortage and unavailable. However, a shortage that is mitigated or prevented due to safety stocks would provide a benefit of allowing them to stay on the optimal drug. A study published in 2020 reviewed 494 new molecular entities approved by the U.S. Food and Drug Administration between 1999 and 2015 and found that the median increase in the QALY of patients switching to a new drug was 0.09 QALYs^{footnote 39} compared to the drug previously taken before the new drug came to market. While the study measures the benefit to patients changing from a suboptimal drug to an optimal drug, this analysis assumes that allowing patients to stay on their optimal drug treatment will have the same impact. For this reason, a factor of 0.09 is assumed to be a reasonable proxy. Therefore, it is assumed that, by avoiding a shortage, the QALY gain for drugs that pose a serious and imminent risk of injury to human health if in shortage would be 0.09 QALYs. Taking the previously estimated $649,000 VSLY and the 0.09 QALY, the improvement for an average-aged person in Canada expected to live to 82 would represent a gain of approximately $58,000 ($649,000 * 0.09 QALY) per beneficiary per year.

The average length of a drug shortage in Canada is approximately 98 days. Across a representative list of DIN-drugs that pose a serious and imminent risk of injury to human health if in shortage, the average treatment length of the drug was around 47 days, or approximately 13% of the year. Therefore, the adjusted QALY gain for the average person in Canada no longer being affected by a shortage is approximately $7,500 (58 000 annual QALY * 13% of a year) per patient.

Health Canada also found that 29% of DIN-drugs marketed in Canada were in shortage at some point during fiscal year 2019-20 based on a Patented Medicines Prices Review Board report.^{footnote 40} Assuming that 29% of drugs that could pose a serious and imminent risk to human health if in shortage are in shortage during a given year, the number of active shortages during a given year would be 123 (425 DIN-drugs * 29%) respectively.

Furthermore, a report^{footnote 40} by the Patented Medicines Prices Review Board indicates that, in 2019-20, approximately 55% of shortages were resolved within three months. The same report also estimated that in the same year, 37% of drug shortages did not require any patients to switch the drug they were using because of the shortage.

It is assumed that by requiring three months of safety stock, shortages that last three months or less would no longer require patients to switch their treatment. Furthermore, since it is assumed that 37% of shortages currently do not require patients to change their treatment, the three months of safety stock would reduce the impact of a shortage on patients for 18% of shortages within a year (55% - 37%).

There is expected to be 123 shortages per year for DIN-drugs that pose a serious and imminent risk of injury to human health as previously estimated above. It is further estimated that approximately 5% of DIN-drugs that pose a serious and imminent risk of injury to human health if in shortage would be unable to be held in three months of safety stock due to the nature of the drug, based on the external survey. Therefore, it is expected that 117 shortages would occur in a year where it is feasible to have three months of safety stock for that drug. Thus, it is estimated that, in the regulatory scenario, 21 shortages a year would no longer have patient impacts due to the safety stock requirements.

(55% * 117 shortages per year) – (37% * 117 shortages per year)

It was previously estimated that for each shortage, there are approximately 24 000 patients that will be impacted. Therefore, in the first year after the coming into force of the safety stock requirement, the total number of patients affected would be 504 000 (24 000 patients * 21 shortages).

Assuming that each patient affected by the shortage is affected for the average length of treatment for the drug, the total annualized benefit for patients is expected to be $3.2 billion.

Overall, the expected benefit to people in Canada is estimated to be $22.2 billion PV over a 10-year period, discounted at 7% per year.

Shortage prevention and mitigation plans

It is expected that the proposed amendments relating to the use of shortage prevention and mitigation plans would help prevent and mitigate shortages of drugs that could present a serious risk of injury to human health and reduce harm to people in Canada.

The top three causes of drug shortages in Canada are manufacturing disruptions, demand increases and shipping delays. Shortage prevention and mitigation plans would help to mitigate the risk of manufacturing disruptions and shipping delays causing shortages by addressing the conditions that lead to these supply failures.

Recent publications have demonstrated that proactively assessing risks to drug manufacturing processes and supply chains, coupled with an understanding of market vulnerabilities, have enabled stakeholders to support robust operations that help prevent shortages. This research further notes that proactive risk assessment has also enabled some stakeholders to predict and prevent supply disruptions that could potentially lead to the shortage.

Because of the scope of proposed amendments, these benefits would apply to drugs which, if in shortage, would pose a risk of serious risk of injury to human health.

Demand surge reporting

It is expected that the proposed amendments governing demand surge reporting would provide early signals of shortages and help efforts to mitigate shortages of certain important drugs and reduce harm to people in Canada.

Demand increases are one of the top three causes of drug shortages in Canada, alongside manufacturing disruptions and shipping delays. For example, demand increases have played an important role in recent critical and national shortages, including shortages of pediatric analgesics and medications used in the treatment of diabetes. Receiving signals of demand increases would allow Health Canada to perform early interventions alongside stakeholders that could either prevent or mitigate a drug shortage.

Because of the scope of the proposed amendments, these benefits would apply to drugs which, if in shortage, would pose a risk of serious risk of injury to health.

Scope of drugs subject to shortage regulations

It is expected the proposed amendments governing demand surge reporting would prevent and mitigate shortages of drugs in Canada and reduce harm to people in Canada.

New and existing provisions of the regulations related to shortages are targeted to minimize regulatory burden on drugs with relatively low shortage risk. However, occasions may arise where the shortage risk associated with such a drug changes and becomes significant enough that intervention from Health Canada is warranted. For example, in 2022-23 there were national shortages of pediatric analgesic drugs which affected families across Canada.

By empowering the Minister to place additional drugs within scope of regulations related to shortages, these regulations would allow the department to respond to such situations when they arise by making use of key regulatory tools (e.g. mandatory shortage reporting, exceptional importation, etc.) to protect the health of people in Canada.

Updates to exceptional importation and sale frameworks for drugs and medical devices

It is expected that the proposed amendments to the exceptional importation and sale frameworks for drugs and medical devices would allow the department to apply these frameworks to a wider range of products and circumstances. This would allow the department to be more flexible in using the frameworks to prevent and mitigate shortages of drugs and medical devices.

It is expected that people in Canada would benefit through an increase in the supply of products that are in shortage or at risk of shortage. An increase in products entering the Canadian market during shortages would provide people in Canada with access to substitute products that they otherwise would not have.

Updates to reporting frameworks for drug and medical device shortages and discontinuations

It is expected that the proposed amendments to reporting frameworks for drug and medical device shortages and discontinuations would have the benefit of improving the clarity and usability of shortage reporting platforms. This would allow people in Canada, including patients and medical practitioners, to more easily obtain reliable information about shortages of drugs and medical devices. As well, this information would support Health Canada, its provincial/territorial partners and industry in responding to such shortages when they occur, helping to mitigate the impacts on people in Canada.

Summary totals

Summary total

The monetized benefits are estimated at $3.2B per year (annualized), or $22.2B PV over ten years (discounted at 7%). These estimates include the government cost savings from no longer performing extensive reviews on medical device shortage reports reported directly to Health Canada and benefits to people in Canada in QALY from shortage prevention and mitigation due to the safety stock requirement. The total quantifiable costs are approximately $17.1M per year (annualized), or $119.5M PV over ten years (discounted at 7%). Overall, the net monetized impact is estimated at $22.1B PV in benefits over ten years or $3.2B per year (annualized).

Cost-benefit statement

• Number of years: 10 periods of 12 months (2025 to 2034)
• Price year for costing: 2024
• Present value base year: Period 1 (2025)
• Discount rate: 7%
• Sum of values may not equal totals due to rounding

Table 2: Monetized costs

Impacted stake-holder	Description of cost	Base year	Other relevant years (Year 2)	Final year	Total (PV)	Annualized value
Industry	Cost to accumulate and maintain safety stocks	$34,800,000	$1,900,000	$2,000,000	$44,500,000	$6,300,000
	Cost of shortage prevention and mitigation plans	$14,700,000	$4,700,000	$4,700,000	$42,100,000	$6,000,000
	Cost of tracking and reporting demand surges	$12,500,000	$468,000	$468,000	$14,500,000	$2,100,000
	Cost to establish documented procedures for medical device shortage reporting	$8,400,000	$520,000	$520,000	$11,000,000	$1,600,000
	Cost for over-the-counter drugs that are exceptionally imported to include information that allows for safe use	$179,000	$357,000	$357,000	$2,300,000	$333,000
	Cost of increased reporting due to removal of medical device exemptions	$0	$94,500	$94,500	$575,000	$82,000
	Cost of serious adverse drug reaction reporting	$37,000	$74,000	$74,000	$487,000	$69,000
	Cost of reporting for over-the-counter drugs subject to shortage regulations	$3,450	$6,900	$6,900	$45,000	$6,400
	Exceptional importation – reporting information in respect of any serious risk of injury to human health associated with foreign regulatory actions	$3,100	$6,300	$6,300	$41,000	$5,900
	Notification of cancellation for exceptionally imported medical devices	$3,900	$7,900	$7,900	$52,000	$7,400
	Total costs	$70,626,450	$8,134,600	$8,234,600	$115,600,000	$16,503,700
Government	Compliance and enforcement	$0	$162,000	$162,000	$987,000	$141,000
	Expansion of the third-party website	$593,400	$93,400	$51,400	$906,000	$129,000
	Government review of demand surge reporting	$0	$97,500	$97,500	$601,000	$86,000
	Cost of reviewing safety stocks quantity reduction requests	$0	$37,000	$74,000	$448,000	$64,000
	Cost to establish and maintain lists incorporated by reference	$45,000	$30,000	$30,000	$225,000	$32,000
	Cost to review shortage prevention and mitigation plans	$0	$78,000	$78,000	$472,000	$67,000
	Cost to evaluate serious adverse drug reaction reporting	$20,000	$40,000	$40,000	$266,000	$38,000
	Total costs	$658,400	$537,900	$532,900	$3,905,000	$557,000
All stakeholders	Total costs	$71,300,000	$8,700,000	$8,800,000	$119,500,000	$17,100,000

Table 3: Monetized benefits

Impacted Stake-holder	Description of benefit	Base year	Other relevant years (Year 2)	Final year	Total (PV)	Annualized value
People in Canada	Increased quality of life due to maintaining safety stocks mitigating shortage impacts	$0	$1,800,000,000	$4,100,000,000	$22,200,000,000	$3,200,000,000
Government	Shortage reporting on a third-party website	$0	$283,000	$283,000	$1,700,000	$245,000
All stakeholders	Total benefits	$0	$1,800,000,000	$4,100,000,000	$22,200,000,000	$3,200,000,000

Table 4: Summary of monetized costs and benefits

Impacts	Base year	Other relevant years	Final year	Total (PV)	Annualized value
Total costs	$71,300,000	$8,700,000	$8,800,000	$119,500,00	$17,100,000NONBREAKING_SPACE
Total benefits	$0	$1,800,000,000	$4,100,000,000	$22,200,000,000	$3,200,000,000
NET BENEFIT	$-71,300,000	$1,800,000,000	$4,100,000,000	$22,100,000,000	$3,200,000,000

Quantified (non-monetized) and qualitative impacts

Positive impacts

• The proposed amendments pertaining to the exceptional importation and sale of designated drugs is expected to expand the number of products an organization would be able to sell, allowing industry to increase their supply of products and revenues, should an organization choose this option;
• The proposed amendments would help mitigate or prevent drug shortages in Canada thus benefiting people in Canada.

Negative impacts

• The increase in advanced reporting requirements for anticipated discontinuations from six months to 12 months prior to the discontinuation may increase compliance costs for market authorization holders due to the requirement to report earlier;
• Amendments for the extension of expiry dates are formalizing a current practice that is estimated to have a minimal cost impact.

Small business lens

Although the proposed amendments do not specifically address small businesses, the needs of small business were taken into consideration in the creation of the proposed amendments. For example, safety stock requirements include a condition of feasibility that must be met for the Minister to add a drug to the Safety Stock List. As well, shortage prevention and mitigation plans do not have a prescribed format, allowing the market authorization holders flexibility in how they wish to document their plans, provided the plans contain all the required information.

The number of small businesses was determined through surveys that were sent to all current drug establishment licence holders, medical device establishment licence holders and medical device licence holders. The surveys asked respondents if they were a small business according to the Treasury Board Secretariat’s definition (a business that has fewer than 100 employees or generates between $30,000 and $5 million in annual gross revenue).

There were 89 drug establishment licence holders that responded to the survey with 24 organizations identifying as a small business, which represents 27% of drug establishment licence holder respondents. In contrast, there were 348 medical device establishment licence and medical device licence holders that responded to the survey with 175 organizations identifying as a small business which represents 50% of medical devices establishment licence and medical device licence holder respondents.

The analysis relies on the self-identification of small businesses through the survey as a representative sample of the industry. The following provides a summary of the costs for small businesses.

• Seven small businesses who manufacture approximately six drugs each would need to develop shortage prevention and mitigation plans, resulting in a total cost of $638,000 (7 small business * $91,000 per business) in the first year. Small businesses would also be required to update their plans every three years, resulting in an annualized cost of $129,000 for small businesses. In addition, it is estimated that approximately three newly marketed DIN-drugs would be manufactured by small businesses and meet the threshold of posing a serious risk of injury to human health if in shortage each year, resulting in an ongoing cost of $45,600 per year (3 new drugs * $15,200 per plan) to develop shortage prevention and mitigation plans.
• 18 DIN-drugs would be manufactured by small businesses and meet the threshold of posing a serious and imminent risk of injury to human health if in shortage, requiring safety stocks to be maintained. Therefore, it is expected that small businesses would incur a total accumulation cost of $1.55M (18 DIN-drugs * $86,000) and a per year storage cost of $4,700 (18 DIN-drugs * $260). In addition, it is estimated that there would be approximately one new drug each year that would join the list and be manufactured by a small business. This results in an ongoing cost of $86,000 per year (1 new drug * $86,000) to accumulate safety stock and $260 per year (1 new drug * $260) for storage for a small business that has a drug added to this list. Small businesses would also be required to maintain safety stock records for three years, resulting in an annualized cost of $2,100.
• 32 drug establishment licence holders would be small businesses and be required to update their systems to be able to track and report demand surges. This results in an estimated one-time cost of $1.95M (32 drug establishment licence holders * $61,000) for small business importers and wholesalers who are not fabricators or distributors to update their systems to be able to track and report a 250% increase in year-over-year sales volumes. Furthermore, it is estimated that there would be approximately 49 demand surge reports per year from small businesses. Therefore, the cost to report 250% year-over-year increases in demand to Health Canada for small business importers and wholesalers is estimated to be $15,400 per year (49 shortage reports * $315) starting in year two.
• 622 small business manufacturers would need to establish documented procedures for medical device shortage reporting. Therefore, for the 622 small businesses, the total one-time cost to industry is expected to be around $4.0M ($6,500 * 622 small business medical device licence holders) in the first year. In addition, there is expected to be an ongoing cost to new organizations that enter the market to establish these procedures. It is expected that approximately 38 new entrants (80 new entrants * 48%) would be considered a small business, resulting in an ongoing cost of $247,000 per year (38 new entrants * $6,500 per organization) for small businesses to establish documented procedures.
• 144 shortage reports would be submitted by small businesses due to the removal of medical device shortage reporting exemptions. Therefore, the annual cost to small businesses is estimated to be $45,400 per year (144 reports * $315) beginning in year two.
• 33 serious adverse drug reaction reports would be reported by small businesses in a year, resulting in an ongoing cost of $11,300 (33 reports * $341 per report) per year. However, to account for the six-month transition period for the proposed amendments related to the exceptional importation and sale framework, the first-year costs are expected to be half the per year value.
• Six shortage reports would be reported by small businesses in a year as a result of over-the-counter drugs being subjected to shortage reporting if specified on a list incorporated by reference into the regulations. This results in an ongoing cost of $1,900 per year (6 reports * $315 per report), beginning in the second year.
• Small businesses would be responsible for around 15% of the cost for organizations to include a $0.33 per sheet printout of safe use information per unit of product exceptionally imported. This results in small businesses having an ongoing annual cost of approximately $50,000 per year.

The full small business lens analysis can be found in the Cost-Benefit Analysis report and is available upon request by writing to hpsdpdcorr-corrdgppsdp@hc-sc.gc.ca.

Small business lens summary

• Number of years: 10 periods of 12 months (2025 to 2034)
• Base year for costing: 2024
• Present value base year: Period 1 (2025)
• Discount rate: 7%
• Sum of values may not equal totals due to rounding

Table 5: Compliance costs

Activity	Annualized value	Present value
Cost of shortage prevention and mitigation plans	$124,000	$874,000
Cost to accumulate and maintain safety stocks	$291,000	$2,000,000
Cost to set up demand surge reporting system for importers and wholesalers	$259,000	$1,800,000
Cost of increase reporting due to removal of medical device reporting exemptions	$39,000	$276,000
Cost of reporting for new drugs subject to shortage reporting regulations	$1,600	$11,500
Total compliance cost	$714,600	$4,961,500

Table 6: Administrative costs

Activity	Annualized value	Present value
Cost of reviewing shortage prevention and mitigation plans every three years	$129,000	$908,000
Cost to maintain safety stock records for three years	$2,100	$14,700
Cost of establishing documented procedures for medical device shortage reporting	$747,000	$5,300,000
Cost of demand surge reporting for importers and wholesalers	$13,400	$94,000
Cost of serious adverse drug reaction reporting	$10,500	$74,000
Cost for over-the-counter drugs that are exceptionally imported to include information that allows for safe use	$50,000	$354,000
Total administrative cost	$952,000	$6,744,700

Table 7: Total compliance and administrative costs

Totals	Annualized value	Present value
Total cost (all impacted small businesses)	$1,666,600	$11,706,200

One-for-one rule

The one-for-one rule applies since there is an incremental increase in administrative burden on business. The proposal is considered burden IN under the rule, and no regulatory titles are repealed or introduced. The amendments would result in an annualized administrative total cost of approximately $1,651,134.

As per the Red Tape Reduction Regulations, the assessment of administrative impacts was conducted for a period of ten years commencing from registration. All values listed in this section are presented in 2012 dollars, discounted to 2012 at a rate of 7%.

For all administrative tasks, the average hourly wage (including overhead) of the responsible individual is estimated to be $37.68.

Cost of maintaining safety stock records

The proposed amendments related to maintaining safety stock records represents a one-time cost of $52 (in 2024 dollars) in the second year after the coming into force. Up to 404 businesses would spend one hour to complete the task once per year. In the third year after the coming into force, up to 808 businesses would spend one hour to complete the task once per year.

After the third year, the ongoing cost of maintaining safety stock records represents an annualized total cost of $12,441. Up to 1 212 businesses would spend one hour to complete the task once per year.

Cost of reviewing shortage prevention and mitigation plans

The proposed amendments related to reviewing shortage prevention and mitigation plans represent an annualized total cost of $955,209. Up to 460 businesses would spend 153.19 hours to complete the task once per year.

Cost to establish documented procedures for medical device shortage reporting

The proposed amendments related to documenting procedures represent a one-time cost of $6,500 (in 2024 dollars) for current medical device establishment licence holders to establish documented written procedures for medical device shortage reporting. Up to 1 295 businesses would spend around 131 hours to document written procedures in the first year. The ongoing annual cost for 80 new medical device establishment licence holders each year would represent an annualized total cost of approximately $142,079 for organizations to establish documented written procedures.

Cost of demand surge reporting for importers and wholesalers

The proposed amendments related to notifying Health Canada of 250% increases in demand represents an annualized total cost of approximately $27,972. Up to 325 businesses would spend around six hours per year to report once per year.

Cost for over-the-counter drugs that are exceptionally imported to include information that allows for safe use

The proposed amendments related to exceptional importation of over-the-counter drugs represent a one-time cost of $89,500 (in 2024 dollars). Up to two businesses would spend 1 804.07 hours to complete the task once per year.

The ongoing costs represent an annualized total cost of $97,543. Up to three businesses would spend 2 399 hours to complete the task once per year.

Cost of serious adverse drug reaction reporting

The proposed amendments related to reporting serious adverse drug reactions represent an annualized total cost of approximately $23,429. Health Canada estimates that industry would submit an additional 218 reports each year and the administrative cost per report has been identified at $341 (in 2024 dollars).

Exceptional importation — reporting information in respect of any serious risk of injury to human health associated with foreign regulatory actions

Internal data indicates that industry stakeholders historically submit an average of 298 notifications of foreign action per year, which corresponds to 20% of the total of 1 456 medicinal ingredients on the Prescription Drug List. There are currently 20 active drugs on the List of Drugs for Exceptional Importation and Sale, suggesting that four would likely submit a notification of foreign action. Industry indicated that this activity costs an average of $1,573 per notification (in 2024 dollars).

The first-year costs for reporting information in respect of any serious risk of injury to human health associated with foreign regulatory actions represent a one-time cost of $1573 (in 2024 dollars). Up to two businesses would spend 31.71 hours to complete the task once per year.

The ongoing costs represent an annualized total cost of $1,719. Up to four businesses would spend 31.71 hours to complete the task once per year.

Exceptional importation — notification of the cancellation of foreign authorized medical devices

The proposed amendments would require importers of exceptionally imported medical devices to notify Health Canada within 72 hours of any information they receive or become aware of relating to an exceptionally imported medical device that is no longer authorized for sale in a foreign jurisdiction. Using drug notifications as a proxy, internal data indicates that drug industry stakeholders historically submit an average of 298 notifications of foreign action per year, which corresponds to 20% of the total of 1 456 medicinal ingredients (on the Prescription Drug List. There are around 25 medical devices per year that are on the List of medical devices for exceptional importation and sale, suggesting that five would likely submit a notification of foreign action. Industry indicated that this activity costs an average of $1,573 per notification (2024 dollars).

Therefore, the ongoing administration cost is estimated to be approximately $7,900 each year in 2024 dollars.

The first-year costs of amendments related to notifying of a medical device no longer being authorized represent an annualized total cost of $176. Up to three businesses would spend 26.43 hours to complete the task once per year. The average hourly wage (including overhead) of the responsible individual is estimated to be $37.68. The ongoing costs represent an annualized total cost of $2,149. Up to five businesses would spend 31.71 hours to complete the task once per year.

Regulatory cooperation and alignment

On January 22, 2024, Organisation for Economic Co-operation and Development (OECD) member nations, including Canada, published a declaration on building better policies for more resilient health systems. The declaration calls on the OECD and other international organizations to assist in efforts to tackle drug shortages and security of supply issues, including by considering regulation and stockpiling approaches.

In keeping with this declaration and good practices in regulatory design, the proposed amendments are similar to initiatives underway in other jurisdictions.

Safety stocks

The proposed amendments would require market authorization holders of drugs for which a shortage of the drug, if it were to occur, could present a serious and imminent risk of injury to human health, to keep safety stock in Canada. This requirement is similar to the requirements of international comparators. Other countries have specific requirements for holding an amount of safety stock for critical drugs that are vulnerable to shortage. For example:

• In France, market authorization holders must hold a minimum of two months of stock for medicinal products identified as “medicines of major therapeutic interest” and four months for more vulnerable drugs. France has published a list of 422 such drugs that are more vulnerable to shortage and for which the four-month safety stock requirement applies.
• In Australia, market authorization holders must hold four to six months of regular demand of select low-price drugs that are at high risk of shortage and provide regular stock reports in exchange for price guarantees. Australia has unique requirements due to their isolated geography and funds these safety stocks.
• Switzerland lists drug categories that are subject to safety stock requirements. Switzerland stock requirements for listed drugs are two to three months for active ingredients of human anti-infective drugs; three months for dosed formulations of human anti-infective drugs, strong analgesics and opiates, and blood bag systems; and four months for vaccines for a flu pandemic and neuraminidase inhibitors.

Shortage prevention and mitigation plans

The proposed amendments would require market authorization holders of certain drugs to develop shortage prevention and mitigation plans. This requirement would be targeted at critical drugs that are vulnerable to shortages to focus efforts where they would have the most impact. This is comparable to the approach taken in France and the United States, where plans of similar scope are required for drugs that are listed (France) or meet criteria (United States) related to being critical and vulnerable to shortages.

The European Union’s General Pharmaceutical Legislation amendment proposal includes obligations for manufacturers to have shortage management and prevention plans for all marketed products. Requirements would include shortage management and prevention measures, as well as a supply chain risk assessment.

France requires shortage risk management plans for the medicinal products identified as “medicinal products of major therapeutic interest.” Requirements include information on the drug, assessment of risks that could lead to shortages and the means of controlling these risks, and management measures for drugs currently in, or at risk of, shortage. Manufacturers must report the products for which they are developing shortage prevention and mitigation plans. France has published a list of 6 000 medicinal products of major therapeutic interest. These plans must be submitted annually.

The United Kingdom’s Department of Health and Social Care requires that market authorization holders maintain appropriate supply of their products and expects them to develop shortage management and prevention plans.

The United States requires manufacturers responsible for the supply of prescription drugs and medical devices used to prepare or administer those drugs and active pharmaceutical ingredients that meet critical and vulnerable criteria to maintain shortage risk management plans. Manufacturers must determine if their product is in scope. This includes prescription drugs and their associated medical devices and active pharmaceutical ingredients that are life-supporting, life-sustaining, or intended in the treatment or prevention of a debilitating disease or condition. These plans are subject to inspection and recommended to be updated annually.

Expiration date extension

The proposed amendments allowing the Minister to extend the expiration date on certain lots and batches of drugs in order to mitigate a shortage is aligned with the use of expiration date extensions internationally.

To help with drug supply during a shortage, the United States Food and Drug Administration maintains a lot-specific list of products with extended use data. This list is based on data reviewed by the Administration and indicates lot numbers that can be used through the corresponding new expiration dates by patients and providers. The list does not recommend or require that listed products be relabelled with the new expiration dates and the Administration expects the product to be disposed of upon availability of replacement product.

Exceptional importation

Australia allows the exceptional importation of unapproved critical drugs when that drug is in short supply, including due to a discontinuation of the drug

Similarly, many countries can implement temporary measures to allow non-compliant products to be imported during an emergency. For example:

• The United States has issued multiple Emergency Use Authorizations to allow certain unapproved products, including personal protective equipment, when there is no approved alternative domestically available. The United States also allows unregistered uses of pesticides (including surface disinfectants and sanitizers) to address emergency conditions.
• France has permitted the importation of select drugs that do not comply with normal labelling requirements.
• Australia has allowed flexibilities related to labelling of therapeutic products to facilitate their importation during a public health emergency. As well, the Australian Pesticides and Veterinary Medicines Authority has the authority to issue emergency use permits for a chemical product or an active constituent, including certain surface sanitizers and disinfectants.

Shortage and discontinuation reporting

Shortage and discontinuation reporting requirements are common across OECD countries. However, reporting requirements differ across countries. For example, countries like Belgium and Norway require market authorization holders of all drugs to report anticipated or actual shortages. In other countries like France, Australia, and the United States, the reporting requirements only apply to the market authorization holders of specific drugs included in a predefined list. In the United States, reporting of medical device supply interruptions is required for certain medical devices during a public health emergency and otherwise encouraged on a voluntary basis.

The proposed amendments would enable the Minister to expand existing shortage-related requirements, such as required shortage reporting, to capture additional drug products (e.g. over-the-counter drugs). This is aligned with the practice of Australia, Finland, Sweden, and Spain.

The proposed amendments would require reporting of discontinuations 12 months in advance of the discontinuation of a product. The proposed change would provide Health Canada with more notice to respond to any possible impacts of the discontinuation. This differs from the practice of international comparators. However, the European Commission released a proposal in April 2023 that recommends member states to require MAHs to report discontinuations at least 12 months in advance.

Areas of cooperation with provinces and territories

Health Canada plays a leadership role in responding to shortages of drugs and medical devices, but better prevention and mitigation of shortages are the responsibility of many partners, including provincial and territorial governments and the health care community. Health Canada is responsible for regulating drugs and medical devices, while provincial and territorial governments are responsible for the management, organization and delivery of health care services for their residents. Areas of provincial and territorial responsibility that impact drug and medical device shortages include: policy for health service organization and delivery influencing demand and demand forecasting to inform the manufacturing of drugs and medical devices, procurement of drugs and medical devices, and the regulation of health care professionals.

Health Canada works closely with provincial and territorial governments to address shortages of drugs and medical devices. When there is a shortage of critical and national importance, Health Canada coordinates information sharing with provincial and territorial governments as well as industry to help coordinate the conservation of the remaining supply, determine demand and supply gap, and prioritize distribution of new supply. The department also supports work done by provincial and territorial governments and regulatory bodies to introduce measures to mitigate the shortage, such as changing prescribing practices.

Health Canada will continue to engage with provincial and territorial governments through forums such as the Multi-Stakeholder Steering Committee on Drug Shortages, Medical Device Shortages Multi-Stakeholder Committee, and the federal/provincial/territorial Assistant Deputy Ministers’ Drug Shortages Table to help ensure that the new regulations would strengthen Canada’s collaborative shortage response.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment (SEEA), a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

Health product shortages are a pan-Canadian issue with the potential to affect a broad range of demographic groups in Canada. The proposed amendments are expected to broadly benefit the health of all people in Canada who use, or may use, drugs and medical devices. The proposed amendments are not expected to disadvantage people in Canada based on their age, sex, gender, race, culture, or other socioeconomic or demographic characteristics.

People in Canada who are particularly reliant on drugs or medical devices may benefit the most from Health Canada’s improved capacity to prevent and alleviate shortages. A number of factors (PDF) can influence the need for therapeutic products, including, but not limited to, age, sex, disabilities, and underlying conditions. For example, prescription drug use rises with age, in part because older people in Canada are more likely to be diagnosed with chronic conditions that require treatment with such drugs. The incidence of chronic conditions that require prolonged use of therapeutic products is more common among women over 65, as women tend to have longer life expectancies than men.

The burden of injury or illness disproportionately affects people with lower socioeconomic status, who face greater health risks, have fewer resources to maintain and improve their health, and are more likely to face barriers to accessing drugs and medical devices.^{footnote 41,footnote 42,footnote 43} Improving Health Canada’s response to shortages may help improve access to drugs and medical devices and potentially reduce existing inequities in this regard. As a result, it is anticipated that this regulatory proposal could indirectly benefit groups with lower socioeconomic status.

In addition to the general impacts of shortages, individual shortages may have a more targeted effect on a particular subpopulation. In keeping with the Government of Canada’s commitment to Gender-Based Analysis Plus in the development of policies, programs and legislation, Health Canada began conducting a Gender-Based Analysis Plus analysis of all 37 drug shortages that were reviewed by the Tier Assignment Committee in 2022–2023 and had a national, critical impact on patients and the health care system. This analysis looked at the different impact these shortages had on factors such as age, sex, gender, race, ethnicity, socioeconomic status, disability, sexual orientation, cultural background, migration status, and geographic location. The analysis determined that 62% of these shortages disproportionately impacted one or more age groups, 22% disproportionately impacted those residing in very rural or remote areas, and 11% disproportionately impacted women.

Implementation, compliance and enforcement, and service standards

Implementation

The proposed amendments would come into force in three phases.

The following amendments would come into force six months after the day they are published in the Canada Gazette, Part II:

• amendments related to the Minister’s authority to expand the scope of drugs subject to shortage regulations;
• amendments related to the Minister’s authority to extend the expiration dates for drugs to address shortages; and
• amendments that update the exceptional importation and sale frameworks for drugs and medical devices.

The following amendments would come into force one year after the day they are published in the Canada Gazette, Part II:

• amendments related to the requirement for importers and wholesalers to report demand surges in certain circumstances;
• amendments related to the requirement for drug market authorization holders to maintain shortage prevention and mitigation plans; and
• updates to the reporting frameworks for drug and medical device shortages and discontinuations.

The following amendment would come into force 18 months after the day it is published in the Canada Gazette, Part II:

• amendments related to the requirement for drug market authorization holders to maintain safety stocks in certain circumstances.

This schedule would allow the Minister to make immediate use of authorities needed to respond to shortages when they happen, while giving market authorization holders and other regulated parties the time needed to adapt to new regulatory requirements.

Documents incorporated by reference would be updated as needed and in keeping with the Health Canada Incorporation by Reference Policy. Part of this policy is to undertake a consultation process that is appropriate to the situation and purpose of the document.

Health Canada publishes guidance to support regulated parties in understanding and complying with regulations. The department is publishing new draft guidance alongside this proposal to assist regulated parties in

• determining whether a shortage of a drug would present a serious risk of injury to health;
• developing and maintaining shortage prevention and mitigation plans for certain drugs;
• developing and maintaining safety stocks for specified drugs;
• wholesaler and importer reporting of surges in demand for certain drugs to Health Canada;
• understanding the Minister’s authority to extend the expiration dates for drugs to address shortages; and
• understanding the Minister’s authority to expand the scope of drugs subject to shortage regulations.

The department is publishing updated draft guidance alongside this proposal to reflect amended regulatory requirements, including

• guidance for reporting shortages and discontinuations of drugs and medical devices; and
• guidance related to exceptional importation and sale of drugs and medical devices.

Regulated parties are invited to review this guidance and provide comments as part of the consultation on the proposed amendments.

To implement the proposed amendments, the department would undertake several compliance promotion activities. These activities would aim to raise awareness and promote a high level of compliance as early as possible during the regulatory implementation process.

The department uses a Performance Information Profile to measure and track the success of Health Canada’s Health Product Shortages Program. This includes performance indicators that track the functionality of shortage reporting platforms, as well as industry compliance with regulatory requirements once an instance of non-compliance has been confirmed. The results would be comprehensively tracked in keeping with the Policy on Results. The department also regularly conducts audit and evaluation activities to assess the effectiveness of Health Canada programs, including the department’s Health Product Shortages Program.

Compliance and enforcement

Regulated parties including drug establishment licence holders, drug market authorization holders, and medical device manufacturers, importers, and distributors are responsible for ensuring that they comply with the applicable requirements of the Food and Drugs Act and its regulations.

Compliance with these amendments would be assessed and enforced in accordance with Health Canada’s Compliance and enforcement policy for health products (POL-0001). This policy describes the department’s national compliance and enforcement approach for health products regulated under the Food and Drugs Act. The policy uses an evidence- and risk-based approach that emphasizes fairness, consistency, impartiality, and transparency to help protect the safety of the public and prevent deception that would create a false or misleading impression in relation to health products. Compliance and enforcement activities may include

• active prevention of problems through compliance promotion;
• targeted oversight of risks through proactive compliance monitoring; and
• rapid response and enforcement to address detected public health risks.

Compliance and enforcement responses are proportionate to the identified risk posed to the health and safety of people in Canada. Health Canada chooses the actions and tools that are most appropriate for the situation, based on an assessment of available evidence and risks pertaining to the situation, including the health and safety risks posed by the non-compliance and the behaviours and compliance history of the regulated party.

Contact

Cynthia Colapinto
Director
Health Product Shortages Directorate
Health Canada
Telephone: 613‑462‑8871
Email: hpsdpdcorr-corrdgppsdp@hc-sc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council proposes to make the annexed Regulations Amending Certain Regulations Made Under the Food and Drugs Act (Shortages and Discontinuation of Sale of Drugs and Medical Devices) under section 30^{footnote a} of the Food and Drugs Act ^{footnote b}.

Interested persons may make representations concerning the proposed Regulations within 70 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Cynthia K. Colapinto, Director, Policy and Data Division, Health Product Shortages Directorate, Regulatory Operations and Enforcement Branch, Health Canada, 200 Eglantine Driveway, Tunney’s Pasture, Ottawa, Ontario K1A 0K9 (email: hpsdpdcorr-corrdgppsdp@hc-sc.gc.ca).

Ottawa, December 13, 2024

Wendy Nixon
Assistant Clerk of the Privy Council

Regulations Amending Certain Regulations Made Under the Food and Drugs Act (Shortages and Discontinuation of Sale of Drugs and Medical Devices)

Food and Drug Regulations

1 (1) The definition discontinue in subsection C.01.001(1) of the Food and Drug Regulations ^{footnote 44} is replaced by the following:

discontinue

means, in respect of the sale of a drug by the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for the drug, to permanently cease the sale of the drug in Canada; (cesser)

(2) Subsection C.01.001(1) of the Regulations is amended by adding the following in alphabetical order:

List of Drugs for the Purposes of the Definition drug in Section C.01.014.8

means the List of Drugs for the Purposes of the Definition drug in Section C.01.014.8 of the Food and Drug Regulations that is published by the Government of Canada on its website, as amended from time to time; (Liste de drogues pour l’application de la définition de drogue à l’article C.01.014.8)

shortage

means, in respect of a drug, a situation in which the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for the drug is unable to meet the demand for the drug in Canada; (pénurie)

2 Section C.01.014.7 of the Regulations is renumbered as subsection C.01.014.7(1) and is amended by adding the following:

(2) For greater certainty, subsection (1) does not remove the requirement for the manufacturer to post information under subsection C.01.014.92(1).

3 Section C.01.014.71 of the Regulations is replaced by the following:

C.01.014.71 If 12 months has elapsed since the day on which the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for a drug — within the meaning of paragraph (a) of the definition drug in section C.01.014.8 — last sold the drug, the manufacturer shall so notify the Minister in writing within 30 days after the day on which that period ends.

4 (1) Section C.01.014.8 of the Regulations is replaced by the following:

C.01.014.73 (1) The Minister may add a drug to Part 1 of the List of Drugs for the Purposes of the Definition drug in Section C.01.014.8 only if the Minister has reasonable grounds to believe that a shortage or the discontinuation of sale of the drug, if it were to occur, could present a risk of injury to human health.

(2) The Minister may add a class of drugs to Part 2 of the List of Drugs for the Purposes of the Definition drug in Section C.01.014.8 only if the Minister has reasonable grounds to believe that a shortage or the discontinuation of sale of any drug that belongs to that class, if it were to occur, could present a risk of injury to human health.

C.01.014.8 In sections C.01.014.9 to C.01.014.96, other than in section C.01.014.94, drug means any of the following drugs for which a drug identification number has been assigned under subsection C.01.014.2(1):

• (a) the following drugs for human use:
  • (i) drugs included in Schedule I, II, III, IV or V to the Controlled Drugs and Substances Act,
  • (ii) prescription drugs,
  • (iii) drugs that are listed in Schedule C or D to the Act, and
  • (iv) drugs that are permitted to be sold without a prescription but that are to be administered only under the supervision of a practitioner;
• (b) drugs that are set out in Part 1 of the List of Drugs for the Purposes of the Definition drug in Section C.01.014.8; and
• (c) drugs that belong to a class of drugs that is set out in Part 2 of that list.

(2) The portion of section C.01.014.8 of the Regulations before paragraph (a) is replaced by the following:

C.01.014.8 In sections C.01.014.81 to C.01.014.96, other than in section C.01.014.94, drug means any of the following drugs for which a drug identification number has been assigned under subsection C.01.014.2(1):

5 (1) The Regulations are amended by adding the following after section C.01.014.8:

C.01.014.81 (1) If a shortage of a drug, were it to occur, could present a serious risk of injury to human health, the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for the drug shall establish and maintain a shortage prevention and mitigation plan that includes the following:

• (a) a detailed description of
  • (i) the measures that the manufacturer intends to take to identify and assess shortage risks associated with the drug,
  • (ii) the shortage risks associated with the drug that the manufacturer has identified and assessed,
  • (iii) the measures that the manufacturer intends to take to prevent or mitigate shortage risks associated with the drug, and
  • (iv) the measures that the manufacturer intends to take to mitigate the impacts of a shortage of the drug;
• (b) a general description of how the manufacturer intends to evaluate the effectiveness of the measures referred to in subparagraphs (a)(i), (iii) and (iv); and
• (c) the strategy for communicating to the Minister any significant increase in the likelihood that a shortage of the drug could occur.

(2) The manufacturer shall provide the Minister, on request and in the manner specified by the Minister, with a copy of the plan within 24 hours after the request is made or within any longer period specified by the Minister.

(3) The manufacturer shall update the plan every three years or, if applicable, after a significant change in the likelihood that a shortage of the drug could occur and then every three years after the change.

(2) Subsection C.01.014.81(1) of the Regulations is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

• (d) a detailed description of the measures to be taken in order for the manufacturer to comply with section C.01.014.84, if applicable.

6 The Regulations are amended by adding the following after section C.01.014.81:

C.01.014.82 The following definitions apply in this section and in sections C.01.014.83 to C.01.014.85.

List of Drugs for the Purposes of Section C.01.014.84

means the List of Drugs for the Purposes of Section C.01.014.84 of the Food and Drug Regulations that is published by the Government of Canada on its website, as amended from time to time. (Liste de drogues pour l’application de l’article C.01.014.84)

specified drug

means a drug that is set out in the List of Drugs for the Purposes of Section C.01.014.84. (drogue inscrite)

C.01.014.83 (1) Subject to subsection (2), the Minister may add a drug to Part 1 or 2 of the List of Drugs for the Purposes of Section C.01.014.84 only if the Minister has reasonable grounds to believe that

• (a) a shortage of the drug, if it were to occur, could present a serious and imminent risk of injury to human health;
• (b) it is technically feasible to keep a safety stock of the drug; and
• (c) failure, by the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for the drug, to ensure that a safety stock of the drug is kept in Canada could present the risk referred to in paragraph (a).

(2) The Minister may add a drug to Part 2 of the List of Drugs for the Purposes of Section C.01.014.84 only after considering the following factors:

• (a) any characteristics and uses of the drug — and any unusual patterns of demand for the drug in the previous calendar year — that may make the formula referred to in paragraph C.01.014.84(1)(a) unsuitable for determining the size of a safety stock of the drug to be kept in Canada; and
• (b) the risks to human health that could be presented by a shortage of the drug.

C.01.014.84 (1) Subject to subsections (2) and (3), the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for a specified drug shall ensure that a safety stock of the drug that contains one of the following amounts is kept in Canada:

• (a) in any case where paragraph (b) does not apply, a quantity determined by the formula:

  (A ÷ 12) × 3

  where

  A

  is the total quantity of the drug that the manufacturer sold in Canada during the previous calendar year;

• (b) a quantity determined by the formula:

  (A ÷ B) × C

  where

  A

  is the total quantity of the drug that the manufacturer sold in Canada during the reference period set out in column 1 of Part 2 of the List of Drugs for the Purposes of Section C.01.014.84 in respect of the drug,

  B

  is the total number of months in that reference period, and

  C

  is the total number of months set out in column 2 of Part 2 of that list in respect of the drug.

(2) The manufacturer is not required to comply with subsection (1) if a shortage of the specified drug exists.

(3) If the safety stock does not contain the applicable quantity referred to in the subsection (1) due to all or part of it having been sold in order to respond to a shortage of the specified drug, the manufacturer shall ensure that the safety stock contains that quantity as soon as feasible once they are able to meet the demand for the drug.

C.01.014.85 (1) The manufacturer referred to in section C.01.014.84 shall create, for each calendar year in which they are required to ensure that a safety stock of a specified drug is kept, a record that contains the following information for each month of that year:

• (a) the address of each building where the safety stock was kept and the quantity kept in each building;
• (b) information demonstrating how the manufacturer calculated the quantity of the drug that the safety stock contained;
• (c) an indication of whether the safety stock was kept by the manufacturer or by another person on their behalf; and
• (d) if the safety stock was kept by another person on the manufacturer’s behalf, that person’s contact information.

(2) The manufacturer shall retain the record for at least three years after the day on which it was created.

7 (1) The portion of subsection C.01.014.9(1) of the Regulations before paragraph (a) is replaced by the following:

C.01.014.9 (1) Subject to subsection (5), if a shortage of a drug exists or is likely to occur, the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for the drug shall post the following information in English and French on a website that is operated for that purpose by a party with whom His Majesty in right of Canada has entered into a contract to make that information available to the public:

(2) Paragraph C.01.014.9(1)(a) of the Regulations is replaced by the following:

• (a) the manufacturer’s name and contact information;

8 The Regulations are amended by adding the following after section C.01.014.9:

[C.01.014.91 reserved]

9 The reference “[C.01.014.91 reserved]” after section C.01.014.9 of the Regulations is replaced by the following:

C.01.014.91 (1) Subject to subsections (3) to (5), if a shortage of a drug, were it to occur, could present a serious risk of injury to human health, a person who holds an establishment licence and imports the drug or is the wholesaler of the drug shall provide the following information to the Minister, in the manner specified by the Minister, in the case where the volume of sales of the drug made by the licensee has increased by at least 250% within a month (referred to in this section as “the designated period”) in comparison to the volume of sales of the drug in the same month in the previous calendar year (referred to in this section as “the reference period”):

• (a) the name and contact information of the licensee;
• (b) the drug identification number assigned for the drug;
• (c) the drug’s brand name and proper name or, if it does not have a proper name, its common name;
• (d) the proper names of the drug’s medicinal ingredients or, if they do not have proper names, their common names;
• (e) the drug’s therapeutic classification according to the Anatomical Therapeutic Chemical classification system (ATC), established by the World Health Organization Collaborating Centre for Drug Statistics Methodology — namely the level 3 description of, and level 4 code for, the drug;
• (f) the drug’s strength;
• (g) the drug’s dosage form;
• (h) the quantity of the drug contained in its package;
• (i) the drug’s route of administration;
• (j) the date on which the increase in demand began; and
• (k) the reason for the increase in demand, if known.

(2) The licensee shall provide the information within five days after the last day of the designated period.

(3) This section does not apply to the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for a drug.

(4) The licensee is not required to provide information in respect of an increase in volume of sales of the drug if

• (a) the increase is associated with a shortage of the drug in the reference period; and
• (b) the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for the drug posted information under section C.01.014.9.

(5) The licensee is not required to provide information in respect of an increase in volume of sales of the drug if 12 months has not elapsed since the day on which the licensee first sold the drug in Canada.

(6) In this section, import and wholesaler have the same meaning as in subsection C.01A.001(1).

10 (1) Section C.01.014.10 of the Regulations is renumbered as section C.01.014.92 and paragraph C.01.014.92(1)(a) is replaced by the following:

• (a) the manufacturer’s name and contact information;

(2) Paragraphs C.01.014.92(2)(a) and (b) of the Regulations are replaced by the following:

• (a) if they decide to discontinue the sale of the drug in more than 12 months, at least 12 months before the day on which they will discontinue its sale; and
• (b) if they decide to discontinue the sale of the drug in 12 months or less, within five days after the day on which they make that decision.

(3) Subsection C.01.014.92(3) of the Regulations is replaced by the following:

(3) If any of the information that was posted by the manufacturer changes, they shall update that information on the website within five days after the day on which they make or become aware of the change.

(4) Section C.01.014.92 of the Regulations is amended by adding the following after subsection (3):

(4) For greater certainty, subsection (1) does not remove the requirement for the manufacturer to inform the Minister under section C.01.014.7.

11 Section C.01.014.11 of the Regulations is renumbered as section C.01.014.93.

12 (1) Section C.01.014.12 of the Regulations is renumbered as section C.01.014.94 and the portion of subsection C.01.014.94(1) before paragraph (a) is replaced by the following:

C.01.014.94 (1) The Minister may request that the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for a drug — or any person who holds an establishment licence in respect of a drug in the case where a drug identification number has been assigned for the drug under that subsection — provide the Minister with information that is in their control if the Minister has reasonable grounds to believe that

(2) Subsection C.01.014.94(1) of the Regulations is amended by adding the following after paragraph (a):

• (a.1) a shortage of the drug, if it were to occur, could present a risk of injury to human health;

(3) Paragraph C.01.014.94(1)(b) of the Regulations is amended by striking out “or” at the end of subparagraph (iii) and by replacing subparagraph (iv) with the following:

• (iv) measures that could be taken to prevent or mitigate shortage risks associated with the drug, or
• (v) measures that could be taken to mitigate the impacts of a shortage of the drug; and

(4) Subsection C.01.014.94(2) of the Regulations is replaced by the following:

(2) The manufacturer or licensee shall provide the requested information in the time and manner specified by the Minister.

13 Section C.01.014.13 of the Regulations is renumbered as section C.01.014.95.

14 Subsection C.01.014.14(1) of the Regulations is replaced by the following:

C.01.014.96 (1) If a person who holds an establishment licence distributes a drug for consumption or use outside Canada, the licensee shall immediately create a detailed record of the information that they relied on to determine that the distribution of the drug is not prohibited by section C.01.014.95.

15 Paragraph C.01.020.1(2)(c) of the Regulations is replaced by the following:

• (c) in the case of a drug imported under subsection C.10.001(2) or section C.10.006 or sold under subsection C.10.007.1(1), the identifying code or number of the drug, if any, assigned in the country in which the drug was authorized for sale;

16 The Regulations are amended by adding the following before section C.10.001:

Drugs for an Urgent Public Health Need

17 The Regulations are amended by adding the following after section C.10.003:

Drugs for Exceptional Importation and Sale

18 (1) The portion of subsection C.10.004(1) of the Regulations before the first definition is replaced by the following:

C.10.004 (1) The following definitions apply in this section and in sections C.10.005 to C.10.013.

(2) The definition drug in subsection C.10.004(1) of the Regulations is repealed.

(3) The definition designated drug in subsection C.10.004(1) of the Regulations is replaced by the following:

designated drug

means

• (a) a drug that is set out in Part 1 of the List of Drugs for Exceptional Importation and Sale; and
• (b) a lot or batch of a drug that is set out in Part 2 of that list. (drogue désignée)

(4) Subsection C.10.004(1) of the Regulations is amended by adding the following in alphabetical order:

business day

means a day other than

• (a) a Saturday; or
• (b) a Sunday or other holiday. (jour ouvrable)

(5) Subsection C.10.004(2) of the Regulations is replaced by the following:

(2) In sections C.10.005 to C.10.013, batch certificate, fabricate, import, MRA country, package/label, recognized building and wholesaler have the same meanings as in subsection C.01A.001(1).

(3) In this section and sections C.10.006 and C.10.009,

• (a) specifications has the same meaning as in section C.02.002; and
• (b) a reference to specifications is a reference to the specifications with which the designated drug is required to comply within the jurisdiction of the foreign regulatory authority referred to in paragraph C.10.006(1)(b).

(4) The definition expiration date in subsection C.01.001(1) does not apply in respect of a designated drug referred to in subsection C.10.007.4(1).

19 Section C.10.005 of the Regulations is replaced by the following:

C.10.005 (1) Subject to subsection (3), the Minister may add a drug that is fabricated outside Canada to Subpart 1 or 2 of Part 1 of the List of Drugs for Exceptional Importation and Sale only if

• (a) either of the following conditions is met in respect of another drug:
  • (i) the Minister has reasonable grounds to believe that there is a shortage or risk of shortage of the other drug and a drug identification number has been assigned to it under subsection C.01.014.2(1), or
  • (ii) the sale of the other drug was discontinued;
• (b) the Minister has reasonable grounds to believe that
  • (i) a shortage of the other drug referred to in paragraph (a), if it were to occur, or the discontinuation of sale of it, as the case may be, could present a risk of injury to human health,
  • (ii) the drug to be added to that list can be substituted for the other drug referred to in paragraph (a), and
  • (iii) the drug to be added to that list is authorized to be sold by a foreign regulatory authority within its jurisdiction; and
• (c) in the case referred to in subparagraph (a)(ii), the drug to be added to that list is added on or before the day that is 36 months after the day on which the sale of the other drug referred to in paragraph (a) was discontinued.

(2) Subject to subsection (3), the Minister may add a lot or batch of a drug that is fabricated in Canada to Subpart 1 or 2 of Part 2 of the List of Drugs for Exceptional Importation and Sale only if

• (a) either of the following conditions is met in respect of another drug:
  • (i) the Minister has reasonable grounds to believe that there is a shortage or risk of shortage of the other drug and a drug identification number has been assigned to it under subsection C.01.014.2(1), or
  • (ii) the sale of the other drug was discontinued;
• (b) the Minister has reasonable grounds to believe that
  • (i) a shortage of the other drug referred to in paragraph (a), if it were to occur, or the discontinuation of sale of it, as the case may be, could present a risk of injury to human health, and
  • (ii) the lot or batch of the drug to be added to that list meets the following conditions:
    • (A) it can be substituted for the other drug referred to in paragraph (a),
    • (B) it is authorized to be sold by a foreign regulatory authority within its jurisdiction,
    • (C) it is fabricated for consumption or use outside Canada, and
    • (D) it is not intended for export.

(3) The Minister may add a drug to Subpart 2 of Part 1 of the List of Drugs for Exceptional Importation and Sale — or a lot or batch of a drug to Subpart 2 of Part 2 of that list — only if

• (a) the drug is for human use;
• (b) the drug is not one of the following drugs:
  • (i) a drug included in Schedule I, II, III, IV or V to the Controlled Drugs and Substances Act,
  • (ii) a prescription drug,
  • (iii) a drug listed in Schedule C or D to the Act, or
  • (iv) a drug that is permitted to be sold without a prescription but that is to be administered only under the supervision of a practitioner; and
• (c) the Minister has reasonable grounds to believe that use of the drug can cause injury to human health or present a risk to public health and the injury or risk can be mitigated by the supervision of a practitioner or pharmacist.

C.10.005.1 For greater certainty, if a lot or batch of a drug is set out in Part 1 or 2 of the List of Drugs for Exceptional Importation and Sale, sections C.10.006 to C.10.013 apply only in respect of that lot or batch.

20 (1) The portion of paragraph C.10.006(1)(a) of the Regulations before subparagraph (i) is replaced by the following:

C.10.006 (1) Despite sections A.01.040 and C.01.004.1, a person who holds an establishment licence that authorizes the importation of a drug may import a designated drug set out in Part 1 of the List of Drugs for Exceptional Importation and Sale if the following conditions are met:

• (a) the licensee provides the Minister, in the manner specified by the Minister and not later than the third business day before the day on which the designated drug is imported, with a notification that contains the following information:

(2) Paragraph C.10.006(1)(b) of the Regulations is replaced by the following:

• (b) the licensee provides the Minister with an attestation, by an individual who has authority to bind the licensee, that confirms that the licensee possesses or has immediate access to the specifications for the drug;

(3) The portion of paragraph C.10.006(1)(d) of the Regulations before subparagraph (i) is replaced by the following:

• (d) the following information in respect of the drug is set out in Part 1 of the List of Drugs for Exceptional Importation and Sale:

(4) Subparagraphs C.10.006(1)(d)(iii) and (iv) of the Regulations are replaced by the following:

• (iii) the name of the foreign regulatory authority referred to in subparagraph C.10.005(1)(b)(iii),
• (iv) the maximum limit for the total quantity of the drug that the licensee may import, if applicable,
• (v) the date after which the drug may no longer be imported, if applicable, and
• (vi) the lot or batch number of the drug, if applicable;

(5) Paragraphs C.10.006(1)(e) to (g) of the Regulations are replaced by the following:

• (f) the total quantity of the drug that the licensee imports does not exceed the maximum limit referred to in subparagraph (d)(iv), if applicable;
• (g) the drug is imported on or before the date referred to in subparagraph (d)(v), if applicable; and

(6) Subsection C.10.006(2) of the Regulations is repealed.

21 Section C.10.007 of the Regulations is replaced by the following:

C.10.007 Section A.01.044 does not apply in respect of the importation of a designated drug under section C.10.006.

C.10.007.1 (1) Despite sections C.01.003, C.01.014 and C.08.002 and subject to subsections (3), (4) and (6), a person who holds an establishment licence may sell a designated drug that is set out in Part 2 of the List of Drugs for Exceptional Importation and Sale for consumption or use in Canada if the conditions set out in subsection (2) are met and, as the case may be,

• (a) they are the distributor of the drug for consumption or use outside Canada; or
• (b) they are a wholesaler of a drug.

(2) The conditions are the following:

• (a) the licensee provides the Minister, in the manner specified by the Minister and not later than the third business day before the day on which the licensee first sells the designated drug for consumption or use in Canada, with a notification that contains the following information:
  • (i) the licensee’s name and contact information,
  • (ii) the name and contact information of each fabricator, packager/labeller and tester of the drug and the address of each building in which it is fabricated, packaged/labelled or tested, and
  • (iii) in respect of the drug,
    • (A) its brand name,
    • (B) its medicinal ingredients,
    • (C) its dosage form,
    • (D) its strength,
    • (E) its route of administration,
    • (F) its identifying code or number, if any, assigned in the country in which it is authorized for sale, and
    • (G) a detailed description of its conditions of use;
• (b) if the licensee meets the condition set out in paragraph (1)(b) and the designated drug is referred to in any of paragraphs (a), (c) or (d) of the definition wholesaler in subsection C.01A.001(1), the drug is in the same category as the category for which the establishment licence was issued;
• (c) the following information in respect of the designated drug is set out in Part 2 of the List of Drugs for Exceptional Importation and Sale:
  • (i) the licensee’s name,
  • (ii) the information referred to in clauses (a)(iii)(A) to (F),
  • (iii) the name of the foreign regulatory authority referred to in clause C.10.005(2)(b)(ii)(B),
  • (iv) the maximum limit on the total quantity of the drug that the licensee may sell, if applicable,
  • (v) the date after which the licensee is no longer permitted to sell the drug, if applicable, and
  • (vi) the lot or batch number of the drug;
• (d) the licensee ensures that the information referred to in clause (a)(iii)(G) is available in English and French and in a manner that permits the safe use of the designated drug; and
• (e) the licensee has prepared a plan that specifies the measures to be taken in order for them to comply with paragraph (d).

(3) The licensee shall not sell, in total, the designated drug in a quantity that exceeds the maximum limit referred to in subparagraph (2)(c)(iv), if applicable.

(4) The licensee shall not sell the designated drug after the date referred to in subparagraph (2)(c)(v), if applicable.

(5) The licensee shall ensure that the information referred to in clause (2)(a)(iii)(G) is available in accordance with paragraph (2)(d) until at least the latest expiration date of the designated drug that they sold.

(6) This section does not apply — in respect of a designated drug sold by the licensee under subsection (1) — to another person who holds an establishment licence and sells the drug.

C.10.007.2 Despite sections C.01.003, C.01.014 and C.08.002, the fabricator of a designated drug who is neither the distributor of the drug for consumption or use outside Canada nor a wholesaler of the drug may sell the drug for consumption or use in Canada only to that distributor or such a wholesaler.

C.10.007.3 Paragraph C.02.018(3)(c) does not apply to a person who holds an establishment licence in respect of a designated drug that they sell under subsection C.10.007.1(1) or section C.10.007.2.

C.10.007.4 (1) Subject to subsection (2), sections C.10.008 to C.10.013 apply in respect of

• (a) a designated drug that is imported under section C.10.006; and
• (b) a designated drug that is sold under subsection C.10.007.1(1) or section C.10.007.2.

(2) Sections C.10.009 and C.10.010 do not apply in respect of a designated drug referred to in paragraph (1)(b).

22 (1) The portion of subsection C.10.008(1) of the Regulations before paragraph (b) is replaced by the following:

C.10.008 (1) Subject to subsection (3) and sections C.10.007.3, C.10.009, C.10.010 and C.10.010.2, a sale of a designated drug is exempt from the following provisions:

• (a) sections A.01.014 to A.01.017 and A.01.051; and

(2) Subparagraph C.10.008(1)(b)(i) of the Regulations is replaced by the following:

• (i) sections C.01.016, C.01.017, C.01.019 to C.01.020.1 and C.01.040.3 to C.01.051,

(3) Subparagraph C.10.008(1)(b)(iii) of the Regulations is replaced by the following:

• (iii) sections C.10.007.1 to C.10.013.

23 (1) Subsection C.10.009(1) of the Regulations is replaced by the following:

C.10.009 (1) This section applies — and paragraph C.02.018(3)(c) and section C.02.019 do not apply — to a person who holds an establishment licence in respect of a designated drug that they import under section C.10.006.

(2) Subparagraph C.10.009(2)(b)(i) of the Regulations is replaced by the following:

• (i) the licensee
  • (A) has evidence satisfactory to the Minister to demonstrate that lots or batches of the designated drug sold to them by the vendor of the lot or batch are consistently manufactured in accordance with and consistently comply with the specifications for that drug, and
  • (B) undertakes periodic complete confirmatory testing, with a frequency satisfactory to the Minister, and

(3) Subsection C.10.009(3) of the Regulations is replaced by the following:

(3) The licensee shall possess or have immediate access to the specifications for the designated drug until at least the latest expiration date of the designated drug.

(4) Subsection C.10.009(6) of the Regulations is repealed.

24 Subsection C.10.010(3) of the Regulations is replaced by the following:

(3) The licensee shall provide the requested records in the time and manner specified by the Minister.

25 The Regulations are amended by adding the following after section C.10.010:

C.10.010.1 A person who holds an establishment licence and imports a designated drug under section C.10.006 — or a person who holds an establishment licence and sells a designated drug under subsection C.10.007.1(1) and is not the manufacturer of the drug — shall submit to the Minister, in the manner specified by the Minister, a report of all information relating to the following serious adverse drug reactions within 15 days after the day on which they receive or become aware of the information, whichever occurs first:

• (a) any serious adverse drug reaction that has occurred in Canada with respect to the drug; and
• (b) any serious unexpected adverse drug reaction that has occurred outside Canada with respect to the drug.

C.10.010.2 Despite subsection C.01.050(4), section C.01.050 applies — in respect of a designated drug — to a person who holds an establishment licence and imports the drug under section C.10.006 or a person who holds an establishment licence and sells the drug under subsection C.10.007.1(1), with any necessary modifications.

C.10.010.3 (1) No person shall sell a designated drug that is set out in Subpart 1 of Part 1 or 2 of the List of Drugs for Exceptional Importation and Sale on a retail basis unless the information referred to in clause C.10.006(1)(a)(iii)(G) is available in English and French to the purchaser or consumer of the drug in any of the following manners:

• (a) the information accompanies the drug;
• (b) the information is provided in writing to the purchaser or consumer at the time of sale;
• (c) in the case where the drug is available for sale in an open self-selection area, copies of the information are placed adjacent to the drug in the area in a manner that permits the purchaser or consumer to take one.

(2) For the purposes of subsection (1), the English and French versions of the information referred to in clause C.10.006(1)(a)(iii)(G) need not be available in the same manner.

(3) Subsection (1) does not apply to the sale of a designated drug that is set out in Subpart 1 of Part 1 or 2 of the List of Drugs for Exceptional Importation and Sale by a pharmacist under a prescription, or by a practitioner.

26 Subsection C.10.011(2) of the Regulations is replaced by the following:

(2) The licensee shall ensure that the information is available in accordance with subsection (1) until at least the latest expiration date of the designated drug that they imported.

27 The Regulations are amended by adding the following after section C.10.011:

C.10.012 A person who holds an establishment licence in respect of a drug shall not sell a designated drug set out in Subpart 2 of Part 1 or 2 of the List of Drugs for Exceptional Importation and Sale except to a practitioner, a pharmacist, a hospital within the meaning of subsection C.01.020.1(4) or another person who holds an establishment licence in respect of a drug.

C.10.013 A pharmacist or a person working under a pharmacist’s supervision shall not sell a designated drug set out in Subpart 2 of Part 1 or 2 of the List of Drugs for Exceptional Importation and Sale on a retail basis unless the drug is inaccessible to the public before they sell it.

Extended Expiration Dates

C.10.014 The following definitions apply in this section and in sections C.10.015 to C.10.021.

extended expiration date

means, in respect of a specified lot or batch, the date set out in column 2 of the List of Drugs with Extended Expiration Dates. (date limite d’utilisation prolongée)

List of Drugs with Extended Expiration Dates

means the List of Drugs with Extended Expiration Dates that is published by the Government of Canada on its website, as amended from time to time. (Liste des drogues dont la date limite d’utilisation est prolongée)

specified lot or batch

means a lot or batch of a drug set out in column 1 of the List of Drugs with Extended Expiration Dates. (lot ou un lot de fabrication inscrit)

C.10.015 (1) The Minister may add a lot or batch of a drug to column 1 of the List of Drugs with Extended Expiration Dates and a date to column 2 of that list in relation to the lot or batch only if

• (a) a drug identification number has been assigned to the drug under subsection C.01.014.2(1); and
• (b) the Minister has reasonable grounds to believe that
  • (i) there is a shortage or risk of shortage of the drug,
  • (ii) a shortage of the drug, if it were to occur, could present a risk of injury to human health, and
  • (iii) the lot or batch will comply with the specifications for that drug until at least the date to be added to column 2.

(2) In subsection (1), specifications has the same meaning as in section C.02.002.

C.10.016 Sections C.10.017 to C.10.021 apply in respect of a specified lot or batch and its extended expiration date if the following information is also set out in the List of Drugs with Extended Expiration Dates:

• (a) the drug’s brand name;
• (b) the drug identification number assigned to the drug;
• (c) the name of the manufacturer of the drug;
• (d) the expiration date of the lot or batch; and
• (e) the date on which the Minister added the lot or batch to that list.

C.10.017 Despite the definition expiration date in subsection C.01.001(1), a reference to an expiration date in the provisions of this Part — other than paragraph C.10.016(d) — is, in respect of a specified lot or batch, a reference to its extended expiration date

C.10.018 Subparagraphs C.01.004(1)(c)(v) and (3)(b)(vii) and C.04.019(a)(vi) do not apply in respect of a specified lot or batch.

C.10.019 Sections C.01.014 and C.08.003 do not apply in respect of a specified lot or batch if its extended expiration date is the only change in respect of the lot or batch that relates to the information previously provided to the Minister in connection with the drug.

C.10.020 (1) Within five days after the day on which a specified lot or batch is added to the List of Drugs with Extended Expiration Dates, the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for the drug shall notify any person who holds an establishment licence and to whom they sold the lot or batch of its extended expiration date.

(2) Any person who holds an establishment licence, who has sold a specified lot or batch and who is notified of its extended expiration date shall, within five days after the day on which they are notified, notify any other person to whom they sold the lot or batch of that date.

C.10.021 No person shall sell a specified lot or batch after its extended expiration date.

28 The Regulations are amended by replacing “designated drug” with “drug” in the following provisions:

• (a) the portion of paragraph C.10.006(1)(a) before subparagraph (i);
• (b) subparagraph C.10.006(1)(a)(ii);
• (c) the portion of subparagraph C.10.006(1)(a)(iii) before clause (A);
• (d) subparagraphs C.10.006(1)(a)(v) and (vi); and
• (e) paragraph C.10.006(1)(c).

Medical Devices Regulations

29 Section 43 of the Medical Devices Regulations ^{footnote 45} is amended by adding the following after subsection (3):

(4) For greater certainty, subsection (3) does not remove the requirement for the holder of a medical device licence to post information under subsection 62.241(1).

30 The heading before section 62.21 and sections 62.21 and 62.22 of the Regulations are replaced by the following:

Shortages and Discontinuation of Sale

62.21 The following definitions apply in this section and in sections 62.22 to 62.25.

List of Medical Devices – Shortages and Discontinuation of Sale

means the List of Medical Devices – Shortages and Discontinuation of Sale that is published by the Government of Canada on its website, as amended from time to time. (Liste d’instruments médicaux – pénuries et cessation de la vente)

specified medical device

means a medical device that belongs to a category of medical devices that is set out in the List of Medical Devices – Shortages and Discontinuation of Sale. (instrument médical inscrit)

62.22 The Minister may add a category of medical devices to the List of Medical Devices – Shortages and Discontinuation of Sale only if the Minister has reasonable grounds to believe that a shortage — or discontinuation of sale in Canada — of any device that belongs to that category, if it were to occur, could present a risk of injury to human health.

62.221 (1) The manufacturer of a specified medical device and, in the case of a Class I device, the importer of the device shall each establish and maintain the following documented procedures:

• (a) documented procedures that will enable the manufacturer or importer to
  • (i) monitor their ability to meet demand for the device in Canada, and
  • (ii) identify when shortages of the device occur; and
• (b) documented procedures in respect of the posting of information under sections 62.23 and 62.241.

(2) The manufacturer or importer, as the case may be, shall provide the Minister, on request and in the manner specified by the Minister, with a copy of the documented procedures within 24 hours after the request is made or within any longer period specified by the Minister.

31 (1) The portion of subsection 62.23(1) of the Regulations before paragraph (b) is replaced by the following:

62.23 (1) Subject to subsections (5) and (7), if a shortage of a specified medical device exists or is likely to occur, the manufacturer of the device and, in the case of a Class I device, the importer of the device shall each post the following information in English and French on a website that is operated for that purpose by a party with whom His Majesty in right of Canada has entered into a contract to make that information available to the public:

• (a) the name and contact information of the manufacturer and, if the information is posted by the importer, the name and contact information of the importer;

(2) Paragraph 62.23(1)(d) of the Regulations is replaced by the following:

• (d) the name of the device, including, if applicable, the model name;

(3) Paragraph 62.23(1)(i) of the Regulations is repealed.

(4) Subsections 62.23(2) to (9) of the Regulations are replaced by the following:

(2) Subject to subsection (6), the manufacturer or importer shall post the information

• (a) if the manufacturer or importer anticipates that a shortage will begin in more than six months, at least six months before the day on which they anticipate it to begin;
• (b) if the manufacturer or importer anticipates that a shortage will begin in six months or less, within five days after the day on which they anticipate it; or
• (c) if the manufacturer or importer did not anticipate the shortage, within five days after the day on which they become aware of it.

(3) If any of the information that was posted under subsection (1) changes, the manufacturer or importer shall update that information on the website within two business days after the day on which the manufacturer or importer makes or becomes aware of the change.

(4) Within two business days after the day on which the manufacturer is again able to meet the demand for the specified medical device, the manufacturer or importer shall post information on the website to that effect.

(5) The manufacturer or importer is not required to post information on the website in respect of a specified medical device if, within the applicable period referred to in any of paragraph (2)(a) to (c), the manufacturer or importer anticipates that the manufacturer will be able to meet the demand for the device within 30 days after the day on which the manufacturer or importer anticipated or became aware of the shortage.

(6) Despite subsection (5), if the manufacturer or importer subsequently concludes that the manufacturer will be unable to meet the demand for the specified medical device within the 30-day period, the manufacturer or the importer shall post the information on the website that is required under subsection (1) within five business days after the day on which the manufacturer or importer reaches that conclusion.

(7) This section does not apply in respect of a shortage of a medical device that results from a decision by the manufacturer to discontinue its sale.

32 Sections 62.24 and 62.25 of the Regulations are replaced by the following:

62.24 (1) Despite section 62.23, the manufacturer of a specified medical device may permit the importer of the device to post the information that is required under that section on the manufacturer’s behalf if the information that the manufacturer and importer must post is identical.

(2) The manufacturer shall notify the Minister, in the manner specified by the Minister, if the manufacturer has permitted the importer to post the information on the manufacturer’s behalf.

62.241 (1) Subject to subsection (5), if the manufacturer of a specified medical device or, in the case of a Class I device, the importer of the device decides to discontinue the sale of the device in Canada, the manufacturer or importer shall post the following information in English and French on the website referred to in subsection 62.23(1):

• (a) the name and contact information of the manufacturer and, if the information is posted by the importer, the name and contact information of the importer;
• (b) in the case of a licensed device, the medical device licence number;
• (c) in the case of a device for which the manufacturer holds an authorization issued under section 68.12, the authorization number;
• (d) the identifier of the device, including the identifier of any medical device that is part of a system, test kit, medical device group, medical device family or medical device group family;
• (e) the name of the device, including, if applicable, the model name;
• (f) a description of the device and of its packaging and an indication of whether it is a single-use device; and
• (g) the reason for the discontinuation of sale.

(2) For greater certainty, subsection (1) does not remove the requirement for

• (a) a manufacturer that is the holder of a medical device licence to inform the Minister under subsection 43(3); or
• (b) a manufacturer that is the holder of an authorization issued under section 68.12 to inform the Minister under section 68.25.

(3) The manufacturer or importer shall post the information

• (a) if the manufacturer or importer decides to discontinue the sale of the device in more than 12 months, at least 12 months before the day on which they will discontinue its sale; and
• (b) if the manufacturer or importer decides to discontinue the sale of the device in 12 months or less, within five days after the day on which they make that decision.

(4) If any of the information that was posted under subsection (1) changes, the manufacturer or importer shall update that information on the website within five business days after the day on which the manufacturer or importer makes or becomes aware of the change.

(5) The manufacturer or importer is not required to post information on the website in respect of a specified medical device if the manufacturer

• (a) is also the manufacturer of a new version of the device that is compatible with all of the components, parts and accessories of the device; and
• (b) is able to meet the demand for the new version of the device.

62.25 The Minister shall ensure that a hyperlink to the website referred to in subsection 62.23(1) is on the Government of Canada website.

33 (1) Paragraph 62.26(1)(a) of the French version of the Regulations is replaced by the following:

• a) il y a pénurie ou risque de pénurie de l’instrument;

(2) Paragraph 62.26(1)(b) of the Regulations is replaced by the following:

• (b) a shortage of the device, if it were to occur, could present a risk of injury to human health;

(3) Subparagraphs 62.26(1)(c)(i) to (iii) of the French version of the Regulations are replaced by the following:

• (i) l’existence d’une pénurie ou d’un risque de pénurie de l’instrument,
• (ii) la raison d’une pénurie ou d’un risque de pénurie de l’instrument,
• (iii) les effets réels ou potentiels sur la santé humaine d’une pénurie de l’instrument,

(4) Paragraph 62.26(1)(c) of the Regulations is amended by striking out “or” at the end of subparagraph (iii) and by replacing subparagraph (iv) with the following:

• (iv) measures that could be taken to prevent or mitigate shortage risks associated with the device, or
• (v) measures that could be taken to mitigate the impacts of a shortage of the device; and

(5) Subsection 62.26(2) of the Regulations is replaced by the following:

(2) The manufacturer, importer or distributor shall provide the requested information in the time and manner specified by the Minister.

34 (1) The portion of section 62.27 of the Regulations before the first definition is replaced by the following:

62.27 The following definitions apply in this section and in sections 62.28 to 62.321.

(2) The definition designated medical device in section 62.27 of the Regulations is replaced by the following:

designated medical device

means a medical device that is set out in the List of Medical Devices for Exceptional Importation and Sale. (instrument médical désigné)

35 Section 62.28 of the Regulations is amended by striking out “and” at the end of paragraph (a) and by replacing paragraph (b) with the following:

• (b) a shortage of the device referred to in paragraph (a), if it were to occur, could present a risk of injury to human health;
• (c) the device to be added to that list can be substituted for the device referred to in paragraph (a); and
• (d) the device to be added to that list is authorized to be sold by a regulatory agency within its jurisdiction or, if the sale of the device is not required to be authorized by a regulatory agency within its jurisdiction, the device complies with the applicable legal requirements within its jurisdiction.

36 (1) The portion of paragraph 62.29(a) of the Regulations before subparagraph (i) is replaced by the following:

62.29 Despite sections 21 and 26, the holder of an establishment licence may import a designated medical device if the following conditions are met:

• (a) the holder provides the Minister, in the manner specified by the Minister and not later than the fifth business day before the day on which the designated medical device is imported, with a notification that contains the following information:

(2) Paragraph 62.29(b) of the Regulations is repealed.

(3) The portion of paragraph 62.29(c) of the Regulations before subparagraph (i) is replaced by the following:

• (c) the following information in respect of the device is set out in the List of Medical Devices for Exceptional Importation and Sale:

(4) Subparagraphs 62.29(c)(i) to (iii) of the English version of the Regulations are replaced by the following:

• (i) the device’s name,
• (ii) the device’s class,
• (iii) the name of the device’s manufacturer,

(5) Subparagraphs 62.29(c)(v) and (vi) of the Regulations are replaced by the following:

• (v) the name of the regulatory agency referred to in paragraph 62.28(d),
• (vi) the maximum limit for the total number of units of the device that the holder may import, if applicable, and
• (vii) the date after which the device may no longer be imported;

(6) Paragraphs 62.29(d) and (e) of the Regulations are replaced by the following:

• (d) the total number of units of the device that the holder imports does not exceed the maximum limit referred to in subparagraph (c)(vi), if applicable;
• (e) the device is imported on or before the date referred to in subparagraph (c)(vii); and

37 Section 62.3 of the Regulations is replaced by the following:

62.3 Sections 21.1 and 21.2 do not apply in respect of the importation of a designated medical device under section 62.29.

38 The Regulations are amended by adding the following after section 62.31:

62.311 (1) No person shall sell a designated medical device that is intended to be sold to the general public on a retail basis unless the information referred to in clause 62.29(a)(ii)(E) is available in English and French to the purchaser or consumer of the device in any of the following manners:

• (a) the information accompanies the device;
• (b) the information is provided in writing to the purchaser or consumer at the time of sale;
• (c) in the case where the device is available for sale in an open self-selection area, copies of the information are placed adjacent to the device in the area in a manner that permits the purchaser or consumer to take one.

(2) For the purposes of subsection (1), the English and French versions of the information referred to in clause 62.29(a)(ii)(E) need not be available in the same manner.

39 Subsection 62.32(2) of the Regulations is replaced by the following:

(2) Subject to subsection (3), the holder shall ensure that the information is available in accordance with subsection (1) until at least the latest expiry date of the designated medical devices that they imported.

40 The Regulations are amended by adding the following after section 62.32:

62.321 If the holder of an establishment licence receives or becomes aware of the following information, in respect of a designated medical device that they imported under section 62.29, the holder shall notify the Minister, in the manner specified by the Minister, no later than 72 hours after they receive or become aware of the information, whichever occurs first:

• (a) information to the effect that the device is not authorized to be sold by the regulatory agency referred to in paragraph 62.28(d); or
• (b) if the sale of the device is not required to be authorized by the regulatory agency referred to in paragraph 62.28(d), information to the effect that the device may not meet the applicable legal requirements within its jurisdiction.

41 The heading before section 68.25 of the Regulations is replaced by the following:

Discontinuation of Sale

42 Section 68.25 of the Regulations is renumbered as subsection 68.25(1) and is amended by adding the following:

(2) For greater certainty, subsection (1) does not remove the requirement for the holder to post information under subsection 62.241(1).

43 The Regulations are amended by replacing “designated medical device” with “device” in the following provisions:

• (a) the portion of paragraph 62.29(a) before subparagraph (i);
• (b) the portion of subparagraph 62.29(a)(ii) before clause (A); and
• (c) subparagraphs 62.29(a)(iv) and (v).

44 The English version of the Regulations is amended by replacing “discontinuance” with “discontinuation” in the following provisions:

• (a) subsection 43(3); and
• (b) subsection 68.25(1).

Regulations Amending the Food and Drug Regulations (Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19)

45 Paragraph 20(b) of the Regulations Amending the Food and Drug Regulations (Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19) ^{footnote 46} is replaced by the following:

• (b) sections C.01.004 to C.01.011, C.01.014.9, C.01.014.92, C.01.017 and C.01.019, subsection C.01.020(1) and sections C.01.020.1, C.01.040.3 to C.01.053, C.01.064 to C.01.069 and C.01.401;

Coming into Force

46 (1) Subject to subsections (2) and (3), these Regulations come into force on the day that, in the sixth month after the month in which they are published in the Canada Gazette, Part II has the same calendar number as the day on which they were published, or, if that sixth month has no day with that number, the last day of that sixth month.

(2) Subsections 4(2) and 5(1) and sections 9, 29 to 32 and 42 come into force on the first anniversary of the day on which these Regulations are published in the Canada Gazette, Part II.

(3) Subsection 5(2) and section 6 come into force on the day that, in the eighteenth month after the month in which they are published in the Canada Gazette, Part II has the same calendar number as the day on which they were published, or, if that eighteenth month has no day with that number, the last day of that eighteenth month.

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