Explanatory note for drug shortages interim order

(This note is not part of the Order.)

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The Interim Order Respecting the Prevention and Alleviation of Shortages of Drugs in Relation to COVID-19 (the Interim Order), made by the Minister of Health on October 16, 2020 introduces new tools for the Minister to address drug shortages, or the risk of drug shortages, that may be caused or exacerbated, directly or indirectly, by COVID-19. The scope excludes shortages of veterinary or natural health products.

The Interim Order allows the Minister of Health to compel any person who sells a drug to provide information within the person’s control about a shortage or potential shortage of that drug related to COVID-19 under certain conditions. It also allows the Minister to impose or amend terms and conditions on authorizations to sell drugs for the purpose of preventing or alleviating a drug shortage related to COVID-19 under certain conditions.

The Minister may make interim orders under subsection 30.1(1) of the Food and Drugs Act, if the Minister believes that immediate action is required to deal with a significant risk, direct or indirect, to health, safety or the environment. Such an order ceases to have effect 14 days after it is made unless it is approved by the Governor in Council.


The objective of the Interim Order is to address a significant risk to the health of Canadians as a result of drug shortages caused or exacerbated, directly or indirectly, by COVID-19.


COVID-19 is the infectious respiratory disease caused by a strain of the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The outbreak of COVID-19 began in Wuhan, China, in December 2019. In more severe cases, COVID-19 infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and death.

The World Health Organization (WHO) declared a global pandemic related to COVID-19 on March 11, 2020. As of September 30, 2020, there are more than 33,785,178 cases worldwide and over 1,010,147 people have lost their lives. Since this date, the number of confirmed cases in Canada has exceeded 156,961 and over 9,291 Canadians have died.

The COVID-19 pandemic has created global supply challenges and caused an unprecedented demand for certain drugs, which has contributed to drug shortages in Canada. During the early months of the pandemic, there were 592 shortages reported in Canada compared to 441 during the same months in 2019. By September 2020, Canada experienced 38 Tier 3 (highest impact) shortages, compared to approximately 10 such shortages in all of 2019. Pharmaceutical manufacturing has had to adapt quickly to address rapid changes in demand, which has put additional pressure on the supply of drugs and raw materials to manufacture drugs.

Canada is particularly vulnerable to drug shortages, due to its smaller market size and reliance on foreign imports. The COVID-19 pandemic threatens the health of Canadians by exacerbating existing shortages and increasing the risk of new drug shortages.

On August 25, 2020, the Public Health Agency of Canada released the Federal/provincial/territorial public health response plan for ongoing management of COVID-19 (F/P/T plan) to help guide decision-making in order to respond to future waves of the pandemic. As noted in the F/P/T report, the reasonable worst-case scenario for future waves would include a peak in the fall/winter 2020 that is 2 to 3 times higher than the peak of the initial wave, creating a demand for resources that significantly exceeds system capacity. While the reasonable worst-case scenario is not predictive or even highly likely, such an impact would further burden the health care system and increase the risk of existing and new drug shortages.

To manage the risks posed by the reasonable worst-case scenario, additional tools are required to safeguard Canada’s drug supply and ensure that Canadians have access to the medicines they need. Immediate action is required to better prepare Canada from the threat of shortages related to COVID-19 and protect Canadians from this significant risk to their health.

Drug shortages have a real impact on Canadians. Health care providers rely on access to needed drugs to provide proper and timely treatment. In some cases, the pandemic has further constrained the available supply of a drug, preventing patients from fully filling their prescriptions (for example, the antidepressant phenelzine and propylthiouracil used to manage hyperthyroidism).

Drug shortages can also contribute to adverse patient outcomes, including delayed or cancelled surgeries, increased risk of negative patient outcomes because of the necessity of alternative treatments, discontinuation of treatment and rationed drugs. Urgent action is required to put in place tools that will prevent drug shortages where possible and alleviate their impact on Canadians when they occur.

The Government of Canada has collaborated with industry, provinces and territories, health practitioners and other partners to address drug shortages throughout the COVID-19 pandemic. However, in preparation for a resurgence, the need for strong federal leadership to safeguard Canada’s drug supply and ensure that Canadians have access to the medicines they need continues. Reliable and timely information is required for Health Canada to act quickly and effectively to minimize the effects of these shortages on Canadians.

To date, industry has voluntarily provided this information and we have worked with companies to address shortages. Significant efforts have been made since early in the pandemic, through a whole-of-government approach, to respond to drug supply disruptions. The need for vigilance in maintaining the national drug supply continues and additional tools will better prepare Health Canada to respond to the imminent threat posed by a future resurgence.


Authorizing the Minister to compel information related to drug shortages will facilitate timely access to needed information respecting a drug shortage during the COVID-19 pandemic, where sellers would not voluntarily provide the information. This will enable Health Canada to assess and respond more quickly to an actual or anticipated shortage, which could limit or prevent harm to Canadians. As well, an authority to apply terms and conditions on certain authorizations to sell a drug will help to alleviate an existing shortage or address the risk of that drug going into shortage by promoting a more agile and adaptable supply of that drug.

Together, these tools enable Health Canada and stakeholders to better prevent and alleviate drug shortages during the COVID-19 pandemic and help to protect the health of Canadians.

Information request

The Interim Order will allow the Minister to require any person who sells a drug to provide information about a shortage or potential shortage of that drug if the Minister has reasonable grounds to believe that:

A person required to provide information must do so electronically in a format acceptable to the Minister, which will be specified in industry guidance that will be posted on Health Canada’s website. The information will also be required to be submitted within the time specified by the Minister. However, the Minister cannot require the information to be submitted with less than 24 hours’ notice, unless the Minister has reasonable grounds to believe, based on knowledge, experience, expert advice or other information from a reliable source, that there is a serious or imminent health risk.

The Minister can only request information that is in the control of the person and this power cannot be used to require a person to create new information in response to the Minister’s request. The decision to compel information through the Interim Order must be reasonable, factual and flow logically from the signals available to the Minister. Signals may include complaints, media reports, notifications of shortages, a quality issue requiring Health Canada to take action, a discontinuation of a product or broader supply chain issues. Industry, provinces and territories or stakeholders may also identify potential indications of shortage.

Requests for information by the Minister will be accompanied by an explanation of the reason for the request to allow for more transparent decision-making. The decision to request information will be based on evidence and clearly communicate the decision taken and the rationale so that the affected party understands how the result was reached. The process for providing information and more details about the types of information that may be requested will be provided in guidance.

Terms and conditions

The Interim Order will also allow the Minister to add or amend terms and conditions to certain authorizations to sell a drug for the purpose of preventing or alleviating a shortage. The Minister may only add or amend terms and conditions to an authorization if the Minister has reasonable grounds to believe that

Through terms and conditions, market authorization holders would be required to take measures related to shortage mitigation and prevention in relation to the drug. The precise measures would be tailored to address the specific shortage of a drug or the specific risks of that drug going into shortage, and Health Canada would work with market authorization holders to develop the appropriate measures to be applied. Terms and conditions that could be imposed include identifying alternative sources for raw materials and supplies, developing mitigation strategies to address issues, or reporting on inventory levels on a regular basis. Through these terms and conditions, authorization holders would be better able to anticipate, plan for, alleviate and prevent shortages. More information about mitigation strategies will be provided in guidance.

The decision to impose or amend terms and conditions on an authorization for sale of a drug must be reasonable, factual, and flow logically from the information available to the Minister. Market authorization holders will be notified before a term or condition is applied, afforded an opportunity to respond and provided with reasons if a term or condition is added or amended. Decisions will be based on evidence and clearly communicate the decision taken and the rationale to allow for more transparent decision-making, so that the market authorization holder understands how the result was reached.

Administrative burden and cost to industry

Although the Interim Order does not impose direct costs on industry, it may create administrative burden and costs to industry related to collecting and analyzing information, reporting to Health Canada and developing mitigation strategies for shortages.

Based on the costing survey conducted to support the Regulations Amending the Food and Drug Regulations (Shortages of Drugs and Discontinuation of Sale of Drugs), published in the Canada Gazette, Part II, in 2016, the Department estimates that the cost of labour to respond to an information request would be approximately $392 per request ($112 per hour for an estimated 3.5 hours). The Department estimates that the cost to industry associated with a decision to apply terms and conditions related to information gathering, analysis and reporting would be $4,200 ($112 per hour for an estimated 37.5 hours).

The provisions in the Interim Order would only be used by Health Canada in a targeted fashion to address specific challenges related to a drug shortage, or the risk of a drug shortage, related to COVID-19. Thus, the administrative burden and costs created by this Interim Order may only be realized by a small portion of the pharmaceutical supply chain in Canada and for a finite period of time until the shortage is resolved.


The Department has received comments from industry associations on the proposed approach through written remarks and stakeholder engagement sessions on June 4, 2020, and September 3, 2020. These comments have been generally supportive and understanding of the need for information sharing. The industry associations also expressed a desire for continued engagement throughout the implementation process.

Industry raised some concerns regarding the feasibility and/or cost of implementing certain terms and conditions that may be imposed on an authorization to sell drugs. In particular, it was suggested to limit the scope of information requested, that a reasonable timeline be provided for the requests and that criteria be established to identify the products to which terms and conditions will be applied. They also expressed a desire for regulatory decisions on terms and conditions to be made in collaboration with industry and publicly available.

The Interim Order has been designed to address stakeholder concerns by specifying that the Minister can only request information that is in the control of the person and that this power cannot be used to require a person to create new information. As well, a provision was added that specifies the Minister can only compel information if there are reasonable grounds to believe that the person would not provide the information without a legal obligation. Additionally, a minimum timeline of 24 hours for information requests, unless there is a serious and imminent risk of injury to human health, has been included in the Interim Order.

Additional concerns are being addressed through industry guidance that has been posted on Health Canada’s website. The Department will make terms and conditions publicly available so that regulatory decisions are transparent. In addition, Health Canada will engage stakeholders during implementation and will hold compliance promotion sessions.

Due to the urgent nature of the Interim Order, broader stakeholder consultation was not possible.

Contact us

Catherine Hudon
Director, Compliance Policy and Regulatory Affairs
Policy and Regulatory Strategies Directorate
Regulatory Operations and Enforcement Branch
Health Canada,  
Address Locator: 1907A
200 Eglantine Driveway
Jeanne Mance Building
7th Floor, Room 705A
Tunney's Pasture
Ottawa, Ontario K1A 0K9
Tel: 343-540-8524
Email: hc.prsd-questionsdspr.sc@canada.ca

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