Approval process and access to prescription drugs in Canada


  • Carlo A. Marra,

    Corresponding author
    1. University of British Columbia, Arthritis Research Centre of Canada, Centre for Clinical Epidemiology and Evaluation, Vancouver, British Columbia, Canada
    • Centre for Clinical Epidemiology and Evaluation, Vancouver General Hospital, 717–828 West 10th Avenue, Vancouver, British Columbia V5Z 1L8, Canada
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  • Larry D. Lynd,

    1. University of British Columbia, Centre for Clinical Epidemiology and Evaluation, Vancouver, British Columbia, Canada
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  • Aslam H. Anis,

    1. University of British Columbia, Arthritis Research Centre of Canada, Vancouver, British Columbia, Canada
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  • John M. Esdaile

    1. University of British Columbia, Arthritis Research Centre of Canada, Vancouver, British Columbia, Canada
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In Canada, federal, provincial, and private insurance agencies each play a role in the access to prescription drugs. The federal government is primarily involved in the approval and ongoing monitoring of safety, effectiveness, and quality of marketed drugs. Although insurance coverage for marketed drugs is a federal responsibility for a few special populations (e.g., veterans, aboriginal people, and members of the Royal Canadian Mounted Police and the Canadian Armed Forces), pharmaceutical coverage for the remainder of the population is under the jurisdiction of the 10 provincial governments and private insurance companies. The provincial governments and private insurers are therefore responsible for determining which drugs will be covered under their drug benefit plans and the level of coverage that will be provided to various patient groups (e.g., seniors, those with low incomes, and those with disabilities). In general, private insurers supplement the coverage provided by the provincial drug plans for individuals with employer-provided benefit plans or personally purchased extended health benefits.

Federal government

The federal government's evaluation of a new drug and the subsequent approval decisions are achieved through the Therapeutic Products Directorate of the Health Products and Food Branch of Health Canada (1). The primary objective of the Therapeutic Products Directorate drug review and approval process is to ensure that all drugs licensed in Canada are safe and effective for their indicated uses and are of high quality as required in the Food and Drugs Act and Regulations. The review resembles that performed by the Food and Drug Administration in the United States.

Before being approved for sale in Canada, a drug must be tested by the manufacturer in both preclinical and clinical trials according to strict procedures. Although various steps in the evaluative process are often undertaken outside Canada, sufficient evidence that all required evaluations have been performed must be provided in the formal submission to the Therapeutic Products Directorate.

After a molecule has been identified as a potential candidate for therapeutic use in humans, preclinical animal trials are performed prior to a drug being approved for evaluation in humans. Preclinical studies provide data on the basic pharmacology of the drug including the determination of the pharmacokinetics (absorption, distribution, metabolism, and excretion) that can lead to dosing information for future trials. The preclinical studies also provide data on animal safety. If the results of these studies are promising, the sponsoring company can apply to Health Canada for approval to conduct studies in humans.

Clinical trials are classified into 3 sequential phases: phase I, safety studies; phase II, small scale efficacy and dose-finding studies; and phase III studies that examine the outcomes (safety and efficacy) of drugs in larger groups of patients over longer periods of time. Phase I trials generally entail administering the drug to small samples of either healthy or diseased individuals for a short period to provide initial data on appropriate dosing and common adverse events. In phase II trials, the drug is studied in larger groups of patients, often as dose-ranging studies, to determine the relative efficacy of the agent. Finally, phase III studies generally involve the comparison of the new drug with either placebo or existing therapy indicated for use in the same disease state to evaluate outcomes (i.e., both safety and efficacy) over longer periods of time.

If these clinical studies demonstrate that the potential benefits appear to outweigh the potential harms, the drug manufacturer can file a new drug submission with the Therapeutic Products Directorate or the Biologics and Genetic Therapeutics Directorate at the Health Products and Food Branch, depending on whether the new drug is considered to be a “drug” or a “biologic.” Biologic products include viral and bacterial vaccines, radiopharmaceuticals, gene therapies, and therapeutic products produced through biotechnology. The new drug submission must contain all preclinical and clinical data that support the manufacturer's claim that the drug is safe, efficacious, and the manufacturing process is consistent with the regulatory requirements, and thus, the final product is of high quality. In addition, information regarding the drugs production, source of raw materials, location of the manufacturing facilities, and packaging and labeling must also be included.

Depending on the submission and which agency is involved (the Therapeutic Products Directorate or the Biologics and Genetic Therapeutics Directorate), the relevant agency conducts extensive reviews of the submitted documents and may call in external consultants for assistance. If it is judged that, for a specific patient population and specific conditions of use, the potential benefits of the drug outweigh the known potential adverse events, the Health Products and Food Branch will approve the drug by issuing a Notice of Compliance (NOC) and a Drug Identification Number (DIN). The DIN is unique to every prescription drug and must be printed on every container in which the drug is packaged and marketed. The Health Products and Food Branch will also review and edit the product monograph submitted by the manufacturer.

For conditions that are life-threatening or cause severe impairment for which there are few or no effective therapies, Health Canada has established a Priority Review Process. Through this process, the Health Products and Food Branch can authorize a manufacturer to market a drug under the condition that the manufacturer perform additional studies to assess the potential risks and benefits of the product. This authorization is a Notice of Compliance with condition (NOC/c), and is given to an eligible drug that has demonstrated promising clinical efficacy in clinical trials. However, the product must be of high quality and possess an acceptable risk-benefit profile based on a thorough preliminary evaluation prior to being granted an NOC/c. The conditions include a requirement that adverse drug reactions should be closely monitored and that the Health Products and Food Branch should be provided with regular updates of the pharmacovigilance data. If the necessary data are submitted that provide evidence that the initial conditions have been satisfied, the /c designation can then be removed and the product is granted a full NOC. Of interest, there is poor concordance between medications that receive priority review in Canada and those that undergo expedited review in the United States (2).

If a manufacturer decides not to market a specific product in Canada or the drug is still under review, it is still possible for clinicians and patients to gain access to the agent. The physician can request access to unapproved drugs through Health Canada's Special Access Program. The Special Access Program is intended to provide compassionate access to drugs on an individual patient basis.

Once a drug is approved for sale in Canada, the Marketed Products Directorate at Health Canada is also responsible for the post-marketing surveillance. This surveillance includes the collection and evaluation of information pertaining to adverse drug reactions and potentially acting on this information in the interest of patient safety. In light of the recent concern over the safety of cyclooxygenase 2 selective agents and other nonsteroidal inflammatory drugs, there is considerable discussion within Health Canada about changing the current adverse drug reporting and surveillance strategies currently being used in Canada. It seems likely that changes to post-marketing surveillance will be adopted in the near future, although the specific changes are not yet known.

There has been discussion in the literature regarding the length of time for approval of drugs in Canada (3–5). Historically, Canada has had drug approval times that are similar to those in Australia, but longer times than those reported for the United Kingdom and the United States. However, Rawson and Kaitin (6) demonstrated that although drug approval times in Canada are longer than in the United States, the proportion of new drugs approved in Canada but later discontinued for safety reasons was lower in the Canadian market (2.0%) compared with the United States (3.6%) in a 10-year period from 1992 to 2001.

In 2003, the average time from NOC application submission to licensing decision in Canada was 351 days for a Priority New Drug Submission and 665 days for a Non-Priority New Drug Submission, which is much longer than the target time of 180 and 300 days, respectively. However, in a recent meeting between the Therapeutic Products Directorate, the Biologics and Genetic Therapeutics Directorate, and the Research Based Pharmaceutical Companies in Canada, it was revealed that the Therapeutic Products Directorate had almost completely cleared its backlog and was forecasting drug approval times close to the targeted times by the end of 2005. Unfortunately, the Biologics and Genetic Therapeutics Directorate was not in a similar position, and reported that only 29% of its backlog had been cleared between December 2003 and December 2004 while sustaining a 30% increase in workload (7).

Provincial governments

Once a prescription drug receives an NOC and a DIN, the manufacturer can then market the drug, any authorized practitioner in Canada can prescribe the drug, and pharmacies can dispense the product. However, this approval does not automatically mean that all private and provincial drug insurance plans will cover the cost of these drugs as a benefit. Instead, the Canadian Coordinating Office for Health Technology Assessment is responsible for evaluating the safety, effectiveness, and cost-effectiveness of all new drugs. This function is performed by the Common Drug Review (CDR), which reviews data submitted by the manufacturer and provides a summary report to the Canadian Expert Drug Advisory Committee (CEDAC) (8). This committee makes drug coverage recommendations based on the available data. However, each provincial drug plan is responsible for independently determining which drugs will be eligible for coverage within that province. In addition to considering the safety, effectiveness, and cost-effectiveness of each new drug, these committees also try to estimate the potential budget impact of adding these drugs to the provincial formulary by estimating the uptake of the drugs by the relevant patient groups. Because each province ultimately has different criteria, mandates, and coverage, the list of drugs that are covered varies considerably from province to province (9, 10).

There has been some concern regarding the CDR, in that if a drug is not recommended by this body it is unlikely that it will be listed on any provincial formulary (11). Conversely, if the drug is recommended to be on the list, the provincial decision-making groups can still elect not to list the product for any reason. Politicians have described this as “No means no,” and “Yes means maybe.” However, in a recent article by McMahon et al (10) evaluating the provincial responses to the first 25 drug recommendations made by the CDR and CEDAC prior to June 2005, it was reported that provinces generally follow the recommendations. However, there was considerable heterogeneity in the response speed to CDR recommendations because some provinces had not made coverage decisions many months after a CDR recommendation.

Because provincial governments are ultimately responsible for the costs of prescription drugs that are covered as benefits under the drug benefit plans, provincial governments have put into place cost-avoidance strategies. These include copayment plans based on a deductible, income-based strategies such that the wealthy have higher deductibles and/or higher copayments, and coverage of only up to the cost of a “referenced product” within a therapeutic category as is the case in British Columbia. Other plans are low cost alternative plans where, for example, prices are reimbursed only up to the cost of the available generic version of the drug rather than the brand name. Most provinces also have some mechanism (usually termed “special authority”) by which drugs not listed on the formulary (or listed in a restricted manner) can be accessed by practitioners and patients who have special needs.

Drug insurance plans

Despite this somewhat confusing process of drug access and coverage, it is estimated that ∼90% of all Canadians have some form of pharmaceutical coverage. The amount of this coverage varies by province and by private insurance agency. However, ∼10% of Canadians are insured only for “catastrophic” drug coverage, which is defined differently across the provinces (12).

In summary, Canada has a drug approval process that shares many features with other countries. However, because there is no national funding strategy for pharmaceuticals, coverage for drugs varies from province to province.