Question Period Note: Pharmaceutical Tarrifs

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KEY MESSAGES
• The Government of Canada is committed to using every tool at its disposal to protect Canadians from unjustified tariffs.
• On October 1, the White House communicated that the administration had paused its plan to enact a 100% tariff on branded pharmaceutical products from manufacturers not actively building a production facility on US soil, as it attempts to negotiate additional “most-favored nation” agreements with pharmaceutical companies.
• In addition, there have been some impacts on health products due to tariffs on materials such as steel and aluminum.
• Canada will continue to engage with the US on sectoral tariffs, emphasizing that imports from Canada do not harm U.S. national security, but in fact enhance it.
• Health Canada is working closely with provinces and territories, and continues to engage with the pharmaceutical industry, health associations and patient groups to monitor and help mitigate negative impacts of any tariffs in this sector.
• Health Canada will not hesitate to take all available actions to support adequate supply in Canada.
IF PRESSED
Q1 : If pressed on the impact of US tariffs on health product shortages
A1:
• Health Canada is monitoring the impact of US tariffs on access to health and health-related food products in Canada.
• Health Canada will continue its outreach, leveraging its networks across the health sector to monitor and identify shortage risks and actual shortages, particularly for drugs that could leave patients without options and significantly impact their health.
• Health Canada will not hesitate to take all available actions to support adequate supply in Canada.
Q2: If pressed on the potential for negative impacts on the Canadian pharmaceutical industry as a result of US tariffs, including potential tariffs resulting from the US section 232 national security investigation on pharmaceuticals
A2:
• The Government of Canada continues to engage with the pharmaceutical industry to identify, monitor and respond to concerns to help mitigate negative impacts of the existing tariffs and any future tariffs specifically imposed on the pharmaceuticals sector. Health Canada is also working collaboratively with different government departments and with provinces and territories to mitigate impacts on the pharmaceutical industry.
• On May 7, Canada submitted its response to the US Department of Commerce’s US Section 232 national security investigation emphasizing that imports from Canada do not, in any way, threaten to impair US national security. Rather, they contribute to US national security and complement efforts by US domestic industries to reinforce and advance North American pharmaceutical supply chains.
Q3 : If pressed on the impact of US tariffs or US Executive Orders on health product prices
A3:
• We understand that people in Canada may be concerned about possible price increases on health products, especially as a result of US Executive Orders and recently-announced US tariffs.
• The Government of Canada is monitoring how these orders and tariffs will be implemented.
• We will continue to work with healthcare system partners, including provincial and territorial partners, to actively monitor impacts on pharmaceutical prices and will collaborate, as needed, on potential mitigation measures.

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KEY STATS
• The US is an important source of pharmaceuticals for Canada, amounting to $6.0B, or roughly 31% of a total of $19.3B of imports.
• The US is also an important export market for Canadian pharmaceuticals of $11.1B, or 77% of a total of $14.5B of exports.
o The proportion of the total value of exports that is related to branded pharmaceuticals is unclear. Generics account however for the vast majority of those exports by prescription volume.
• The pharmaceutical industry in Canada represents $74B in revenue and 81,000 jobs.
o The top 6 branded manufacturers in Canada (by prescription volume) all have manufacturing facilities in the US and 3 of them have announced major new investments in the U.S. recently.