Draft for consultation: Guide to distributing drugs intended for the Canadian market for consumption or use outside Canada (GUI-0145)
Proposed changes to this guide are open for consultation. Learn about the consultation and how to provide your feedback. The consultation closes on March 8, 2025.
Disclaimer: This document does not constitute legislation. In the event of any inconsistency or conflict between the legislation and this document, the legislation takes precedence. This document is an administrative document that is intended to facilitate compliance by the regulated party with the legislation and the applicable administrative policies.
On this page
- Overview
- Responsibilities of regulated parties and Health Canada
- Understanding the regulations
- Definitions
- Resources
- Contact us
Overview
Introduction
Since 2021, the Food and Drug Regulations (FDR) have prohibited drug establishment licence (DEL) holders from distributing drugs intended for the Canadian market for consumption or use outside Canada. This prohibition applies if there are reasonable grounds to believe that the distribution would cause or exacerbate a drug shortage. (Note that distribution in the context of this prohibition includes the act of shipping, selling and/or delivering a drug.)
Health Canada is responsible for helping people in Canada maintain and improve their health. This is done, in part, through our commitment and actions to help address and mitigate the harm to public health caused by drug shortages. Our goal is to help ensure that people in Canada have access to the drugs they need when they need them.
We expect stakeholders across the drug supply chain to operate in a way that limits the impact and severity of drug shortages and the harm they pose to public health.
Learn more about drug shortages and the roles of various parties in addressing them.
Purpose
This guidance document will help regulated parties (DEL holders, even if not the market authorization holder (MAH) for a drug) understand how to comply with regulations on distributing drugs intended for the Canadian market for consumption or use outside Canada.
Specifically, it will help you understand sections C.01.014.8, C.10.004 and C.01.014.95 to C.01.014.96 of the FDR by outlining the:
- type of analysis a DEL holder must perform in determining whether drugs intended for the Canadian market can be distributed for consumption or use outside Canada
- types of records a DEL holder must keep to demonstrate the analysis was appropriately conducted
Scope and application
Inclusions
Sections C.01.014.8, C.10.004 and C.01.014.95 to C.01.014.96 apply to the following drugs:
- drugs listed in Schedules I, II, III, IV or V of the Controlled Drugs and Substances Act
- drugs on the Prescription Drug List
- drugs listed in Schedules C and D of the Food and Drugs Act (FDA)
- known as radiopharmaceuticals and biological drugs
- drugs that are permitted to be sold without a prescription, but that are administered only under a practitioner's supervision
- commonly referred to as "ethical" drugs (for example, hemodialysis solutions, pre-filled syringes with epinephrine for severe allergic reactions, MRI contrast agents)
- drugs that are set out in Part 1 and 2 of the List of Drugs for the Purposes of the Definition "Drug" in Section C.01.014.8 (Expanded Scope List)
Note: The Expanded Scope List is incorporated by reference into the FDR and is updated as needed. Regulations outlined in this guidance document apply to drugs as soon as they are added to the list. Regulated parties will be notified before a drug is added to the list.
Learn more:
Exclusions
Over-the-counter drugs that are not on the Expanded Scope List are excluded from the scope of these provisions.
Sections C.01.014.8, C.10.004 and C.01.014.95 to C.01.014.96 do not apply to:
- sales made by a person who is not required to hold a DEL (for example, pharmacies selling drugs at the retail level)
- exports of drugs that are imported for the sole purpose of export (transhipment exempt as defined in section 38 of the FDA)
- exports of drugs that are manufactured in Canada for the purpose of export (foreign-labelled drugs as defined in section 37 of the FDA)
Sex- and gender-based analysis plus (SGBA Plus): Advancing equity, diversity and inclusion
Health Canada has a formal, corporate commitment to applying a sex- and gender-based analysis plus (SGBA Plus) approach to develop, implement and evaluate our activities. This includes our research, surveillance, legislation, policies, regulations, programs and services. This is in keeping with the federal government's commitment to gender-based analysis plus (GBA Plus).
The SGBA Plus process is an intersectional approach to assess how a range of factors interact and intersect with each other and broader systems of power. Examples of factors are sex, gender, age, race, ethnicity, socioeconomic status, disability, sexual orientation, cultural background, migration status and geographic location.
Conducting this analysis helps us to understand how intersecting identity factors, histories, power relations, distribution of resources and individuals' lived realities contribute to differences in accessing health-related resources and health outcomes. By applying SGBA Plus, we can engage in responsive and inclusive health research and develop policies, services, programs and other initiatives to promote greater health equity.
When engaging in this regulatory framework, we encourage you to conduct an SGBA Plus analysis and also take necessary steps to mitigate any possible negative impacts on particular groups.
Learn more about SGBA Plus analysis and assessment:
- Sex- and gender-based analysis plus
- Health portfolio sex and gender-based analysis policy
- Take the gender-based analysis plus course
Note about guidance documents in general
Guidance documents provide assistance to industry on how to comply with governing statutes and regulations. They also provide guidance to Health Canada staff on how mandates and objectives should be met fairly, consistently and effectively.
Guidance documents are administrative, not legal, instruments. This means that Health Canada may consider alternative approaches to meeting the regulatory requirements that stakeholders may propose. However, to be acceptable, alternate approaches to the principles and practices described in this document must be supported by adequate justification. Stakeholders should discuss their proposals with Health Canada in advance so that the regulator can determine whether the applicable statutory or regulatory requirements can be met.
In accordance with its regulatory authorities and its mandate under the Food and Drugs Act, Health Canada may request other information or material, or define conditions not specifically described in this document, to help us adequately assess the safety, efficacy or quality of a therapeutic product. We are committed to ensuring that such requests are justifiable and that decisions are clearly documented.
This document should be read in conjunction with the relevant sections of the regulations and other applicable guidance documents.
Responsibilities of regulated parties and Health Canada
Responsibilities of DEL holders
Sections C.01.014.8, C.10.004 and C.01.014.95 to C.01.014.96 of the FDR apply to DEL holders. For more information on when DELs are required and how to obtain one, consult the Guidance on drug establishment licences (GUI-0002).
In accordance with the regulations, DEL holders are responsible for:
- assessing whether the distribution abroad of any of the drugs defined in the scope and application section could cause or exacerbate a shortage, even if they are not the MAH for the drugs
- obtaining information, as needed, from MAHs or other supply chain parties that would support the complete and accurate assessment of a potential drug shortage
- maintaining a record of the assessment to show that there were reasonable grounds to believe the distribution would not cause or exacerbate a shortage
- keeping the record for at least 1 year after the latest expiry date for those drugs
Note: Any change to the status of the DEL (for example, DEL cancelled or not renewed) does not change the distributor's responsibilities for maintaining these records.
Responsibilities of Health Canada
Health Canada advises DEL holders when the Expanded Scope List is modified, as required, including the timelines for coming into compliance.
We conduct compliance and enforcement activities related to these regulatory requirements as per our Compliance and enforcement policy for health products (POL-0001).
Understanding the regulations
In this section, we provide the exact text from the FDR, followed by an interpretation.
The prohibition
Regulatory text
No person who holds an establishment licence shall distribute a drug for consumption or use outside Canada unless the licensee has reasonable grounds to believe that the distribution will not cause or exacerbate a shortage of the drug. (section C.01.014.95)
Interpretation
These regulations apply to DEL holders who distribute in-scope drugs intended for the Canadian market for consumption or use outside Canada. These are drugs that Health Canada has approved. In other words, they have a drug identification number (DIN) and a Canadian label. Distribution in the context of this prohibition includes the act of shipping, selling and/or delivering a drug.
Even if you are not the MAH, as a DEL holder, the prohibition in section C.01.014.95 applies to you and you must assess whether the proposed distribution of a drug outside Canada would cause or exacerbate a shortage and thereby cause harm to people in Canada. Your assessment should be based on information available to you at the time, for example:
- public information
- information from actors in the supply chain who may be affected
- your organization's own business intelligence
For the purposes of this document, MAH and manufacturer are used as interchangeable terms.
Health Canada recommends that the assessment consist of 2 parts.
Part 1 of the DEL holder assessment is captured in Table 1. It contains factors that would create reasonable grounds to believe that the distribution of a drug meant for the Canadian market for consumption or use outside Canada would cause or exacerbate a drug shortage.
If you answer "yes" to any of the questions in Table 1, you are prohibited from going ahead with the distribution.
Part 2 of the DEL holder assessment is captured in Table 2. It contains a sample of other factors to consider to help you decide if the distribution of a drug meant for the Canadian market for consumption or use outside Canada could cause or exacerbate a drug shortage. The questions in this table are examples. You are responsible for determining if other factors should be considered based on the situation.
If you are not also the MAH, you should work with them to help you obtain the information you need to support your assessment.
Questions to consider | Context and rationale |
---|---|
Is the drug listed as a Tier 3 drug shortage? |
Health Canada posts the most significant drug shortages (also called Tier 3 shortages). These are the shortages that could have the greatest potential impact on, patients and the health care system. |
Will distributing this drug for consumption or use outside Canada impact your ability to meet all of the orders in full from your Canadian customers and on time? |
When an MAH can't meet all orders in full from Canadian customers and on time, the drug is considered to be in shortage. Quantity is a key factor when determining whether the distribution of the drugs elsewhere will disrupt your distribution in Canada. Consider the following:
|
Are all MAHs for the drug in Canada reporting shortages for all comparable strengths or formats of the drug? |
Consult the Drug Product Database for a listing of marketed drugs and associated MAHs and Drug Shortages Canada for shortage reports. If all the MAHs for the drugs you wish to distribute for consumption or use outside Canada are reporting a shortage, your distribution will exacerbate the shortage. |
Questions to consider | Context and rationale |
---|---|
Are some MAHs for the drug reporting actual or anticipated drug shortages or discontinuations on Drug Shortages Canada? |
You must review the Drug Shortages Canada website for shortage reports to assess the supply status of the drug. Such information, including the number of MAHs (listed in the Drug Product Database), and the details of the drug shortage, are important factors to consider. You should consider reaching out to the manufacturer or importer as part of this analysis. |
Is this a sole-source drug or a drug with a limited number of MAHs? |
You should assess whether the drug is sole- or limited-sourced in Canada. Sole-sourced drugs and drugs with a limited number of MAHs (or a dominant supplier in terms of market share) may be at a higher risk of drug shortage. |
Is the drug on the Critical and Vulnerable Drug List (CVDL)? |
Shortages of drugs on this list could present a serious risk of injury to human health. Note: Health Canada interprets serious risk of injury to human health due to a shortage as the likelihood that interruption, lack or delay of treatment due to a shortage could cause serious harm to human health. Elements that determine the seriousness of the harm caused by interruption, lack or delay in treatment due to a shortage include, but are not limited to, an injury that:
These drugs require enhanced actions to reduce the harm to public health that is caused by their shortages. You should account for this in your assessment. |
Do you anticipate supply or demand changes for the drug in the near future that may exceed your forecast or projections? |
You should consider whether supply or demand changes or fluctuations could be expected for the drug. Factors to consider include:
|
Are there reports of shortages of the drug in other countries? |
If applicable, you should consult your global network for reports of shortages. You should also consult public shortage postings of other international regulators to help determine the risk of a shortage in Canada if you distribute the drug for consumption or use outside Canada. |
Are you aware of any other issues that may impact supply of this drug in Canada? |
Further assessment will ensure that you consider other issues that may result in a shortage of the drug in Canada. These issues may be specific to the drug in question. Consider reaching out to the MAH for the drug. |
Health Canada recommends that you consider all relevant factors to help you determine if you can distribute a drug meant for the Canadian market outside Canada without causing or exacerbate a shortage.
An assessment will help you decide if you:
- should not distribute the drug outside Canada (prohibited)
- may distribute the drug outside Canada
It is an offence for a DEL holder to distribute in situations where prohibition is in place and it is an offence for which you could be prosecuted.
You must maintain records that show how you arrived at your decision.
Requirements for making and retaining records
Regulatory text
If a person who holds an establishment licence distributes a drug for consumption or use outside Canada, the licensee shall immediately create a detailed record of the information that they relied on to determine that the distribution of the drug is not prohibited by section C.01.014.95. (section C.01.014.96 (1))
The licensee shall retain the record for at least one year after the latest expiration date of the drug that they distributed. (section C.01.014.96 (2))
Interpretation
You should conduct a thorough analysis of the shortage risks before distributing drugs intended for the Canadian market for consumption or use outside Canada. Refer to Tables 1 and 2 for help in determining if there are reasonable grounds to believe that distributing the drug could cause or exacerbate a drug shortage.
If you proceed with the distribution, you must keep a detailed record of the information that led to your conclusion that the distribution would not cause or exacerbate a drug shortage in Canada. The analysis should include your conclusions about shortage concerns, your information sources and when you accessed the information.
You must maintain these records for 1 year after the latest expiration date of the distributed drugs, even if the DEL status changes during this time (for example, DEL cancelled or not renewed).
As per C.01.014.94 of the FDR, we may ask for your analysis, which you must provide.
Under section C.10.014.94 of the FDR, we may require you to provide information on a drug shortage. For more information about this provision, refer to the Draft for consultation: Guide on requirements for providing information related to drug shortages (GUI-0146).
Definitions
- Drug establishment licence (DEL):
-
A licence issued to a person in Canada pursuant to Division 1A of the FDR to conduct licensable activities in a building that has been inspected and assessed as being in compliance with the requirements of Divisions 2 to 4 of the FDR.
- Drug identification number (DIN):
-
An 8-digit numerical code assigned by Health Canada to each drug product marketed under the FDR.
A DIN uniquely identifies the following product characteristics:
- manufacturer
- brand name
- medicinal ingredient or medicinal ingredients
- strength of medicinal ingredient or medicinal ingredients
- pharmaceutical form
- route of administration
- Establishment licence:
-
Refer to the definition for drug establishment licence.
- Manufacturer or distributor:
-
A person, including an association or partnership, who under their own name, or under a trade, design or word mark, trade name or other name, word or mark controlled by them, sells a food or drug. (FDR, A.01.010)
- Market authorization holder (MAH):
-
Refer to manufacturer or distributor definition
- Person:
-
An individual or an organization as defined in section 2 of the Criminal Code.
- Incorporation by reference:
-
A term to describe a mechanism, which allows a document or list that is not in the text of the regulations, in whole or in part, to be made a part of the regulations.
Health Canada uses incorporation by reference to:
- achieve policy and regulatory objectives
- leverage existing documents
- maintain agile regulatory frameworks that can more quickly adapt to changes in science or technology, or in response to an emerging health or safety risk
- contribute to regulatory alignment with the provinces and territories and to international cooperation on matters of trade, without compromising health and safety
- Shortage:
-
In respect of a drug, a situation in which the manufacturer to whom a document was issued under subsection C.01.014.2(1) that sets out the drug identification number assigned for the drug is unable to meet the demand for the drug in Canada. (FDR, C.01.014.8 (2))
- Transhipment:
-
After goods have been unloaded or in any way removed from the means of transportation by which they came into Canada, their loading, placing on board or within or upon the same or any other means of transportation (Transhipment Regulations Part II, Section 3)
Resources
Legislation and regulations
- Criminal Code
- Food and Drug Regulations
- Food and Drugs Act
- Transhipment Regulations, Part II, Section 3
Policies and guides
- Health Canada incorporation by reference policy
- Protocol for the notification and communication of drug shortages
- Draft for consultation: Guide to reporting drug shortages and discontinuations (GUI-0120)
- Draft for consultation: Guide on the requirements for providing information related to drug shortages (GUI-0146)
- Draft for consultation: Guide to the exceptional importation and sale of drugs in response to drug shortages (GUI-0148)
Web pages and associated documents
- Drug Shortages Canada
- Building resilience: Health Canada's plan to address health product shortages, 2024-2028
Contact us
Contact the Health Product Shortages Directorate by email at hpsdpdcorr-corrdgppsdp@hc-sc.gc.ca
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