Question Period Note: U.S. PROPOSAL TO ALLOW BULK IMPORTS OF PRESCRIPTION DRUGS FROM CANADA

On July 31, 2019, the U.S. Department of Health and Human Services (HHS) announced that the HHS and the Food and Drug Administration would propose a rule to allow for the bulk importation of Canadian drugs through pilot projects by public and private pharmacies and wholesalers. The Food and Drug Administration is expected to publish a Notice of Proposed Rulemaking in January. Final regulations can be expected by spring 2020.

• What is the Government doing to ensure that the possible bulk importation of drugs by the U.S. does not disrupt the supply of drugs to Canadians?

• Ensuring that Canadians have access to the medicines they need is a top priority for our Government.

• We are engaging with a range of partners, including U.S. officials, to better understand the implications for Canadians of the U.S. proposal, should the proposed programs be implemented.

• Our government will oppose any actions that could endanger the health and safety of Canadians by threatening the supply of prescription drugs in Canada.

IF PRESSED…

• We will not hesitate to take steps to safeguard Canadians’ access to needed prescription drugs.

IF PRESSED on HHS consultation process

• Public consultation is a standard step in the U.S. rulemaking process, just like it is for the Government of Canada.

• We will continue to remain in close contact with our American colleagues on this issue.

IF PRESSED on relation between the U.S. plan and the North American Free Trade Agreement/ the Canadian-United States-Mexico Agreement

• Nothing in NAFTA/CUSMA requires Canada to sell pharmaceutical drugs to the other CUSMA parties.

• While international agreements generally limit the ability to impose export restrictions, NAFTA/ CUSMA provides for exceptions in cases where, for instance, the restrictions are applied to prevent or relieve critical shortages of essential products like pharmaceutical drugs.

IF PRESSED on pharmaceutical intellectual property (IP) protection under NAFTA/CUSMA

• The Safe Importation Action Plan, as currently proposed, does not directly address the protection of pharmaceutical intellectual property rights, and does not implicate Canada’s intellectual property related trade obligations under the recently-concluded CUSMA, nor under the original NAFTA.

IF PRESSED on Drug Shortages

• Our government’s top priority is the health and safety of Canadians.

• Addressing the complex issue of drug shortages is a multi-stakeholder responsibility requiring collaborative action from provinces and territories, manufacturers, distributors, practitioners, and the federal government.

• When national shortages occur, Health Canada works with stakeholders across the drug supply chain to coordinate information-sharing, and identify mitigation strategies, which may include regulatory measures to accelerate re-supply if possible.

• Health Canada will continue to evaluate its collaborative approach and work with stakeholders to identify opportunities to make the management of drug shortages work even better.

U.S. SAFE IMPORTATION ACTION PLAN

On July 31, 2019, HHS and the Food and Drug Administration (FDA) published the Safe Importation Action Plan, describing two pathways to allow for the importation of certain prescription drugs originally intended for foreign markets. Pathway 1 outlines HHS/FDA’s intent to propose new regulations that would govern the importation of Health Canada-approved drugs otherwise intended for the Canadian market. Under Pathway 1, interested parties must create importation plans that meet federal regulatory requirements, identify Canadian suppliers, and receive HHS approval according to the future regulations enabling importation. Pathway 2 allows manufacturers to import cheaper FDA-approved versions of their drugs from abroad.

The U.S. has not yet released the draft rule for Pathway 1, but is expected to do so in January 2020. Implications of the draft rule will be better understood once published, as it is difficult to assess the impacts fully with two key elements still currently unknown. First, although U.S legislation excludes certain categories of drugs (e.g., controlled substances, biologics, infused drugs, intravenously injected drugs, and drugs inhaled during surgery), the full scope of exclusions will not be set out until the draft rule is published. Second, the legislation only allows drugs to be imported if there will be a cost savings to U.S. consumers, but the variance in price differences between both countries, as well as between states in the U.S., makes it difficult to predict which drugs would be imported until individual states propose their pilot programs.

DRUG SHORTAGES

A drug shortage occurs when Canadians do not have access to the drugs they need (i.e., a manufacturer is unable to meet the demand for a drug). Shortages can have serious impacts on the healthcare system and can lead to negative health outcomes for Canadians. These impacts include patients rationing drugs known to be frequently in shortage, adverse effects resulting from substitute medicines or irregularly sourced drugs (e.g. internet pharmacies), and when supply issues translate into an outright absence of necessary medicines.

On March 14, 2017, federal regulations came into force requiring drug companies to publicly report drug shortages and discontinuations, including the reasons for the shortage or discontinuation, within a specified timeframe on a third-party reporting website, drugshortagescanada.ca. Timely public communication of drug shortages and discontinuations by drug companies is an essential part of preventing and managing shortages. It helps the drug supply chain and the healthcare system respond appropriately, in order to minimize the impact on patients.

Factors such as whether the shortage is national in scope, whether alternative supplies are available and whether the product is considered medically necessary are all considered in determining the potential impact and any necessary actions by Health Canada.

Health Canada also co-chairs the Multi-Stakeholder Steering Committee on Drug Shortages, which mobilizes provinces and territories and key stakeholder groups to play a lead role in advancing tools to address drug shortages.

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