Delayed drug approvals in Canada—here’s why

This is the second installment of a three-part blog series examining issues around the time required to review and approve new medicines in Canada. Read Part 3.

In our first blog post, we discussed the time it takes to review and approve new drugs in Canada over the past 30 years. However, analyses of drug approval times do not provide reasons for the differences.

Indeed, numerous factors affect the time taken to review new medicines, including the regulatory agency’s policies, procedures and resources, national regulations, the innovative nature of the medicine, the strength of the benefit to patients, the availability of alternative therapies for similar indications, and the regulatory agency’s access to data from other national agencies.

Initially, some said that part of the reason for longer approval times in Canada was that Health Canada’s reviews were of higher quality, although “quality” was undefined. However, a 1999 study of Health Canada’s drug review and approval process by PricewaterhouseCoopers showed that the median time to evaluate safety and efficacy was only about six and a half months, compared with the overall median of the total time from submission to approval of more than 13 months for the same products.

Was the gap due to downtime at Health Canada while the regulatory agency was waiting for a response from the manufacturer? In a study of drug approval times covering the period 1996 to 1998, total review time could be divided into company time (when Health Canada was waiting for action from the company) and agency time (when Health Canada was working on the application) for 64 per cent of the drugs. The median company time was only seven per cent of the total median approval time for the same products. In other words, little time was spent waiting for companies’ responses. This finding appeared to conflict with the PricewaterhouseCoopers study. However, it may simply have meant that agency time did not always imply that work was fully active.

A 1998 report in the National Post report suggested this was the case. The report looked at the delayed approval of Viagra in Canada. Although the submission to Health Canada for Viagra was made only two months later than in the United States, the review time in Canada was more than 15 and a half months compared with less than six months in the U.S., which resulted in the drug’s regulatory approval in the U.S. being almost a year before approval in Canada. The implication was that, for a considerable period, the submission was not being worked on.

Another reason for longer review times put forward by Health Canada was a lack of resources. Health Canada claimed that the delayed approval of Viagra occurred due to a staff shortage. An analysis of the number of staff working on new drug reviews in the regulatory agencies of Canada, Australia, Sweden, the United Kingdom and the U.S. in 2000 did, indeed, show that Health Canada’s review staff was only one-tenth of the U.S. Food and Drug Administration (FDA), but it was two to three and a half times the number in Australia, the United Kingdom and Sweden, which all had shorter median approval times. As the agencies of Sweden and the U.K. were at that time the two most used by the European Union’s mutual recognition procedure, which meant that they performed a high proportion of the EU’s reviews, it was unlikely that the reason they had fewer staff was that they reviewed fewer drugs.

Simply put, none of the reasons advanced by Health Canada in the 1990s and early 2000s sufficiently accounted for prolonged approval times. Extensive approval times were more likely the result of considerable downtime between the receipt of the application and initiation of the review and between components of the review. The separate assessments of chemistry and manufacturing quality were often uncoordinated with the safety and efficacy evaluation. Thus, there was and is no reason to believe that the thoroughness of Health Canada’s reviews is greater than other industrialized countries. In fact, they are probably less thorough than the FDA, which receives and reanalyses data from manufacturers, whereas Health Canada only reviews summaries of the data.

Nevertheless, new drugs are approved later in Canada than in the U.S. and EU. Recently, Fraser Institute authors showed that, despite the time taken to review and approve new drugs in Canada being consistent with that in the U.S. and EU between 2012/2013 and 2018/2019, new medicines received approval in Canada a median of 289 days after approval in the U.S. and a median of 154 days after approval in the EU. In other words, later approval in Canada is now primarily due to applications being submitted later in Canada than in the U.S. and EU, not a longer review process at Health Canada.

New drug applications being submitted later in Canada result in a need for Health Canada to review both pre-marketing studies and post-marketing data from other countries. Inclusion of post-marketing experience is crucial, but when pre-marketing trials have been thoroughly evaluated in peer countries, re-reviewing these data in Canada is a waste of limited resources. It also has the potential to delay patient access to important new medicines.

Later submission of new drug applications in Canada is not surprising for at least two reasons. The first and most obvious is that Canada’s population of 38 million presents a much smaller market than the 445 million in the EU, the 331 million in the U.S. or the 126 million in Japan. On the other hand, Canada is frequently higher on pharmaceutical manufacturers’ product priority lists than Australia with 26 million and definitely higher than New Zealand with only five million people.

Population size is, however, not the only factor in a manufacturer’s decision-making around where to launch new medicines. The pharmaceutical policy environment of a country is a further consideration, especially related to the country’s health technology assessment (HTA) and pricing processes. Once a medicine has successfully passed Health Canada’s regulatory review, which evaluates the drug’s efficacy, safety and manufacturing quality, and received marketing approval, to be covered by government drug plans it must undergo a cost-utility assessment by Canada’s two HTA agencies for new drugs (the Institut national d'excellence en santé et en services sociaux and the Canadian Agency for Drugs and Technology in Health), followed by a successful price negotiation between the manufacturer and the government drug plan’s price negotiation organization (the pan-Canadian Pharmaceutical Alliance). These processes contribute to delaying Canadians’ access to new medicines.

HTAs are not meant to regulate price, but commonly include a recommendation for substantial price reductions. Furthermore, a positive HTA recommendation does not necessarily lead to a pricing negotiation. But if it does and the price negotiation is successful, which again is not guaranteed, coverage by all federal, provincial and territorial government drug plans is not assured. Applications must be made to each one and negotiated individually. In Australia, there’s one HTA agency, which does not make recommendations about prices. Price negotiation is conducted with the Australian federal government and, if successful, coverage is assured in all states and territories.

Due to Canada’s lack of globally competitive intellectual property protection for innovative medicines and inhospitable government-controlled health technology assessment and price negotiation organizations, Canada is a less attractive market for innovative pharmaceutical manufacturers than more collaborative countries.

As such, Canadian patients face delays to access to new potentially beneficial medicines in this country. Indeed, these barriers already deter some manufacturers from launching new drugs here. The Trudeau government is adding to the obstacles in January 2022 with new price regulations, which is the topic of the third and final blog post in this series.