The Pharma Legal Handbook: Canada

On March 29 2023, the Quebec Health Minister (the “Minister”) introduced Bill 15, an Act to make the health and social services system more effective (the “Bill”).

The Bill, which is still at the detailed study stage, proposes a major renewal of the framework for the health and social services system. Its purpose is to put in place a more effective system, particularly by facilitating access to services, enhancing coordination of the different components of the system and bringing communities closer to decisions related to the organization and provision of services.

This bulletin focuses on one critical aspect of Bill 15: the modification of the Specific Medical Necessity Measure by adding additional conditions before making a drug eligible for a patient.

The Current Conditions of the Specific Medical Necessity Measure

In Quebec, the law stipulates that an establishment may only supply drugs that appear on the list drawn up for that purpose by the Minister. The provincial formulary is commonly referred to as the Liste des médicaments – Établissements.

However, it is currently possible for an establishment providing health or social services to supply, for reasons of specific medical necessity, drugs other than those appearing on the formulary if they have received a Notice of Compliance from Health Canada. To do so, the physician or dentist wishing to prescribe or use these drugs must first seek the opinion of his establishment’s Council of Physicians, Dentists and Pharmacists (CPDP).

In addition, an establishment is authorized to supply, for exceptional treatment, (i) drugs not listed on the formulary and for which no Notice of Compliance from Health Canada has been issued, or (ii) drugs, whether or not they appear on the formulary, which are used for indications which are recognized but not approved (i.e., off-label use). Here, written authorization from the CPDP is required, except in cases of emergency.

These measures were established to allow access to and coverage by the Quebec healthcare system of drugs that are of particular and exceptional necessity for patients with conditions that are often severe and have few therapeutic alternatives. They leave some discretion to prescribers and establishments (in particular their CPDPs) to determine cases of specific medical necessity. The discretion is applied according to internal guidelines of the ministry and each establishment, but always takes into account the particularities and individual needs of the patient.

The Amendments Set Out in the Bill

Bill 15 provides more precision and limitations regarding the exceptional use of these medications.

Firstly, the proposed amendments clarify the notion of “specific medical necessity”, allowing the use of a drug approved by Health Canada but not appearing on the Liste des médicaments – Établissements, where there is a demonstrated need which, given the patient’s specific condition, cannot be fulfilled by any of the therapeutic options on the list.

The Bill also clarifies what is meant by “exceptional treatment”. It means a drug required because of an exceptional demonstrated need which, given the seriousness of the patient’s particular condition, cannot be fulfilled by any of the therapeutic indications of the drugs that have received a Notice of Compliance from Health Canada. In other words, the patient requires either, the use of an unauthorized drug or the use of an approved drug for an unauthorized (off-label) indication.

In both cases, section 336 of the Bill stipulates that any professional wishing to use these drugs must first obtain written authorization from the establishment’s Committee of Pharmacology. In this way, the Bill will centralize decision-making power in the hands of an institutional committee, which is not currently the case for drugs approved by Health Canada. Presently, it is more a matter of seeking the opinion of the CPDP, with written authorization reserved for the more delicate situation of using unauthorized drugs or off-label uses.

Moreover, the government is adding an additional prerequisite for a drug to be considered eligible for a user. In particular, it’s a prerequisite to authorization that the Institut national d’excellence en santé et en services sociaux (INESSS) does not refuse to recognize the therapeutic value of the drug for the requested indication. In other words, INESSS must not have issued a negative recommendation regarding the therapeutic value.

The Effects of the Amendments

The new conditions proposed in the Bill appear to be aligned with the Minister’s objective of centralizing and standardizing decisions. Indeed, prescribers in establishments will lose all discretion, except in emergency cases, and will have to defer to the decisions of their establishment’s committee whenever a drug is not listed on the Liste des médicaments – Établissements. The new prerequisite that INESSS must not have previously denied the recognition of a drug’s therapeutic value is of even greater importance.

Some may wonder about the INESSS evaluation process. Will this process be influenced by the increased impact of a negative decision, potentially preventing not only the listing of a drug on the provincial formulary, but literally preventing its supply in establishments, even in the most exceptional cases where the severity of the patient’s particular condition can not be met by any other therapy?

Furthermore, the Specific Medical Necessity Measure mirrors the Exceptional Patient Measure applicable under the Public Prescription Drug Insurance Plan. Does the Bill presage more significant changes in the conditions of access to unapproved and unrecognized drugs for exceptional purposes in Quebec?

As the Bill is still in progress, we await announcements and comments on the proposed changes. Our Life Sciences group is closely monitoring these new developments and remains available to help industry players navigate through these changes.

If you have any questions regarding the consequences of Bill 15, please contact the authors.

This article was originally published on the Fasken website here and is republished with the authors’ consent.

Also from this Legal Handbook

Biosimilars and biologics in Canada: A legal guide. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. Are biosimilar medicines considered the same as generic medicines in your country?

A biosimilar is not a generic biologic product since it is not identical to its reference product; its authorization does not constitute evidence of pharmaceutical equivalence, bioequivalence or clinical equivalence.[1] A biosimilar is a subsequent entry version of a Canadian approved innovator biologic with demonstrated “similarity” to a reference biologic drug.[2]

[1] Health Canada, Guidance Document: Information and Submission Requirements for Biosimilar Biologic Drugs, revised November 14, 2016, at s. 1.3.5; online: https://www.canada.ca/en/health-canada/services/drugs-health-products/biologics-radiopharmaceuticals-genetic-therapies/applications-submissions/guidance-documents/information-submission-requirements-biosimilar-biologic-drugs-1.html

[2] Ibid at s. 1.4.

2. Are all biologic medicines, including biosimilar medicines, patentable in your country?

In Canada, subject matter patentability of biotechnological products is not specifically addressed in the law and must be approached in view of the definition of invention in the Patent Act. The Patent Act defines an invention as “any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement to any art, process, machine, manufacture or composition of matter”. In this respect, biotechnological products – and thus biosimilars – can be considered as “manufacture and/or composition of matter.” Biotechnological processes and uses can also be included in the “art” category. Indeed, the Patent Office explains that biomolecules are chemical compounds, and claims to nucleic acids, polypeptides, proteins and peptides are therefore patentable. The Office has for many years granted claims to isolated DNA sequences, recombinant DNA sequences, as well as monoclonal antibodies, and continues to do so. Some of these patents have been tested in the Courts, but not as yet with respect to subject-matter patentability.

Of course, biologic drugs can only be patented if they are new, non-obvious, and useful. This requirement makes it more difficult to patent biosimilars, which are a subsequent version of an existing biologic drug.

3. Is there a specific regulatory framework for the marketing authorization of biosimilar medicines in your country? If yes, what is the regulatory framework for the authorization of biosimilar medicines?

The legal framework for the approval of a biologic drug involves the same legislation and regulations as for the approval of a conventional drug.[1] However, because of its specificities, a biologic product follows a particular path within this legal framework.

In Canada, public safety requires that the sale or advertising of a new drug be approved by the Minister of Health. In the case of a new drug, including a new biologic drug, the innovator must file a submission which contains sufficient information and material to enable the Minister to assess the safety and effectiveness of the new drug, including data from clinical trials. If the Minister is so satisfied, a marketing approval is issued.[2]

[1] Food and Drug Regulations, CRC, c. 870, Part C: Drugs.

[2] Ibid at, s. C.08.002.

The manufacturer of a biosimilar who wishes to obtain a marketing authorization on the basis of a comparison with an already approved biologic product (the reference biologic drug) may seek to rely on prior information regarding that biologic drug in order to present a reduced clinical and non-clinical package as part of its submission.[1] In order to be able to do so, however, similarity between the products must be demonstrated. This is done with structural, functional and human clinical studies. In particular, there must be no clinically meaningful differences in safety and efficacy between the biosimilar and its reference product.[2]

[1] Health Canada, Guidance Document: Information and Submission Requirements for Biosimilar Biologic Drugs, revised November 14, 2016, at s. 16; online: https://www.canada.ca/en/health-canada/services/drugs-health-products/biologics-radiopharmaceuticals-genetic-therapies/applications-submissions/guidance-documents/information-submission-requirements-biosimilar-biologic-drugs-1.html

[2] Health Canada, Fact Sheet: Biosimilars, modified August 3, 2017, online: https://www.canada.ca/en/health-canada/services/drugs-health-products/biologics-radiopharmaceuticals-genetic-therapies/applications-submissions/guidance-documents/fact-sheet-biosimilars.html

4. What kind of data package is needed to obtain approval for a biosimilar drug? Is this any different to the requirements for the original Biologics drug?

In addition to the standard chemistry and manufacturing data package required for all new biologic drugs, the biosimilar submission must include extensive data demonstrating its similarity to the reference biologic drug in terms of quality attributes. Such similarity may support a possible conclusion of similarity for safety and efficacy purposes.

Similarity is primarily deduced from comprehensive and well-rationalized quality studies, including extensive side-by-side characterization studies.[1] The extent of the necessary studies will depend on the nature of the product, the availability of suitable analytical techniques, the relationship between quality attributes and safety and efficacy, and the differences between the expression systems used to manufacture the products. When considering the similarity of products, physicochemical properties, biological activity, immunochemical properties, impurities, and stability must be evaluated.[2]

If the biosimilar and its reference product are highly similar, then it might be possible to predict that any difference in quality attributes should have no adverse impact upon the safety and efficacy of the biosimilar. It might also be possible for the manufacturer to rely on the non-clinical and clinical data previously generated with respect to the reference biologic drug. The degree of similarity at the quality level will determine the scope and the breadth of the required clinical and non-clinical data.[3]

Insofar as clinical studies are concerned, they involve pharmacokinetic and pharmacodynamic studies. A comparative clinical trial is done in most cases in order to definitively rule out any meaningful clinical differences between the biosimilar and the reference biologic product. Safety and immunogenicity must also be compared.[4] In vivo non-clinical studies may not be necessary where structural, functional, and extensive in vitro mechanistic studies indicate similarity.[5]

Of course, if similarity has not been established, the product cannot be considered a biosimilar.[6]

[1] Health Canada, Guidance Document: Information and Submission Requirements for Biosimilar Biologic Drugs, revised November 14, 2016, at s. 2.3.2; online: https://www.canada.ca/en/health-canada/services/drugs-health-products/biologics-radiopharmaceuticals-genetic-therapies/applications-submissions/guidance-documents/information-submission-requirements-biosimilar-biologic-drugs-1.html

[2] Ibid at s. 2.3.2.1.

[3] Ibid at s. 2.3.2.2 and 2.3.2.

[4] Ibid at s. 2.3.3.3.

[5] Ibid at s. 2.3.3.2.

[6] Ibid at s. 2.3.3.1.

5. What are the requirements for the choice of the reference comparator product?

The reference product to which a biosimilar is compared must be a biologic drug that was authorized on the basis of a complete data package (which includes quality, non-clinical, and clinical information). The reference biologic drug should have accumulated adequate safety, efficacy and effectiveness data in the post-market setting. Another biosimilar can never be used as a reference product.

6. Can the comparator product be sourced from another regulatory jurisdiction? If yes, what are the data needed to support this approach?

In appropriate circumstances, a biologic drug that is authorized for sale in another jurisdiction may be used as a reference product. The non-Canadian reference biologic drug should be marketed in a jurisdiction that has standards similar to Canada.

7. How are the prices of biosimilar medicines regulated? Is this any different from the requirements for the original Biologics drug?

The Patented Medicine Prices Review Board (“PMPRB”) regulates the cost of patented medicines in Canada, including biologics and biosimilars, where applicable. The PMPRB sets the maximum price for which a patented drug may be sold in Canada.

The pan-Canadian Pharmaceutical Alliance (“pCPA”), a coalition of public drug plan representatives negotiates formulary listing and funding terms of biologics and biosimilars on behalf of the provincial, territorial and federal ministries of health. While the pCPA does not have a comprehensive Canadian regulatory framework for pricing, it has released several policy direction documents, including Principles on Subsequent Entry Biologics, which expressed support for long-term cost reductions for biosimilars and Biologics Policy Directions and pCPA Negotiations, which recommended policies for encouraging competition and uptake of biosimilars.

8. What is the reimbursement policy for biosimilar medicine? Is this any different from the requirements for the original Biologic drug?

Similar to other drugs, the reimbursement criteria for biosimilar drugs are determined by provincial and territorial public drug plans and cancer agencies. These criteria are based on recommendations given by the Canadian health technology agencies: the Canadian Agency for Drugs and Technologies in Health (“CADTH”) and the Quebec Institut national d’excellence en santé et services sociaux (“INESSS”).[1] As mentioned above, the pCPA conducts joint federal, provincial, territorial price negotiations for public plans. If negotiation is successful, the individual provinces may decide to reimburse the drug.

Additionally, at the provincial level, governments have recently limited reimbursement of biologics once there is a biosimilar on the market, e.g. for new patients and/or certain indications.

In fact, the government of British Columbia was the first government to introduced a biosimilar initiative in May 2019 in which the provincial public drug plan will only cover the biosimilar versions of specific drugs for affected indications[2] for both new and existing patients as of November 2019, unless patients are eligible for a discretionary exemption for medical reasons. Since then, Alberta, New-Brunswick, Nova-Scotia, Northwest Territories and Quebec introduced their biosimilar initiative.

Private insurers across Canada are generally able to choose their own approach in reimbursing biosimilars but in some provinces, including, e.g. Quebec, they must offer at minimum the coverage provided by the public plan.

[1] Piia Rannanheimo et al., “Environmental Scan: Biosimilars – Regulatory, Health Technology Assessment, Reimbursement Trends, and Market Outlook” (January 2018), online: CADTH https://www.cadth.ca/sites/default/files/pdf/ES0317_biosimilars.pdf at 22.

[2]

See, Government of British Columbia, “Biosimilars Initiative for Patients”, online: https://www2.gov.bc.ca/gov/content/health/health-drug-coverage/pharmacare-for-bc-residents/what-we-cover/biosimilars-initiative-patients#:~:text=The%20Biosimilars%20Initiative%20was%20launched,be%20as%20safe%20and%20effective.

9. Does biosimilar competition impact the reimbursement policy of the originator reference products?

Biosimilars have certainly created competition for originator reference products, largely due to the fact that they are less expensive and in light of the reimbursement policies discussed above. The pCPA has also stated that offers for biologic drugs for which biosimilars are reimbursed will not be considered for negotiation unless their offer includes a transparent list price reduction, indicating a trend towards favouring biosimilars through reimbursement policies.[1] Nonetheless, according to the PMPRB, Canadian rebates on biosimilars as compared to the reference drug price are more modest than in other OECD countries.[2]

[1] Supra note 22 at 8.

[2] Patented Medicine Prices Review Board, “Potential Savings from Biosimilars in Canada,” (February 5, 2018), online: https://www.pmprb-cepmb.gc.ca/view.asp?ccid=1304

10. What is the legal framework for biosimilar medicines prescribing (clinical decision maker) and dispensing (pharmacy level, hospital or retail)? Is this any different to the requirements for the original
Biologics drug?

There is no particular legal framework for biosimilar prescribing. Both physicians and pharmacists must respect the applicable provincial laws governing these professions.

Physicians have discretion to prescribe the biologic or biosimilar versions, where applicable. Nonetheless, and insofar as Health Canada’s authorization of a biosimilar is not a declaration of interchangeability, pharmacists are not permitted to switch patients from a biologic and dispense the biosimilar versions; rather the biosimilar must be specifically prescribed by the patient’s physician.

11. Is the system considering physician-led switching and/or pharmacy-level substitution (without involvement of the clinical decision maker)?

The authority to declare two products interchangeable and thus substitutable at the pharmacy level rests with each province and territory according to its own rules and regulations.[1] As previously stated, an authorization by Health Canada does not constitute a declaration of equivalence to the reference biologic.

The responsibilities afforded to pharmacists in the switch policies vary from province to province. While some provinces provide only for a supporting role for pharmacists, others have extended pharmacists’ scope of practice to allow them to carry out the substitution to a biosimilar drug themselves.

For example, in British Columbia, if a pharmacist notices that a patient is using an originator drug that is subject to a transition, the pharmacist is encouraged to inform the patient that they should consult their prescriber before the switch period ends to maintain coverage.^[2]

On the other hand, provinces like Quebec have authorized pharmacists to substitute reference biological drugs for the biosimilar version themselves directly. The Guide de substitution de l’Ordre des pharmaciens du Quebec (Order of Pharmacists’ Substitution Guide) was amended in August 2021 to expressly allow pharmacists to carry out a substitution towards a biosimilar drug.^[3]

Provinces in which pharmacists already had prescribing authority can initiate the transition towards biosimilars for their patients themselves. This is the case in Alberta, where pharmacists with additional prescribing authority can independently initiate prescriptions for Schedule 1 drugs.^[4] They can therefore follow the process outlined for health professionals to switch patients to biosimilars.^[5]

[1] Health Canada, Guidance Document: Information and Submission Requirements for Biosimilar Biologic Drugs, revised November 14, 2016, at s. 2.1.3; online: https://www.canada.ca/en/health-canada/services/drugs-health-products/biologics-radiopharmaceuticals-genetic-therapies/applications-submissions/guidance-documents/information-submission-requirements-biosimilar-biologic-drugs-1.html

[2] See, for example, BC Government’s Biosimilars Initiative for Health Professionals, “Procedures for pharmacists.”

[3] Ordre des pharmaciens du Québec, La substitution d’un médicament: guide d’exercice.

[4] See Alberta College of Pharmacy’s page on Additional Prescribing Authority.

[5] See Alberta Biosimilar Initiative’s Guide for health professionals.

12. What are the post – authorisation requirements (including pharmacovigilance, risk management plans, post-approval studies) for biosimilar medicines? Is this any different to the requirements for
the original Biologics drug?

Health Canada monitors the safety of all drugs on the market, including biosimilars. It conducts market surveillance, monitors adverse reaction reports, investigates complaints and problem reports. Manufacturers must set up systems to monitor reported side effects, report any new information about serious side effects, notify Health Canada about studies containing new safety information and request authorization for any major changes to the manufacturing process, dose regimen or recommended uses of the drug.

13. Are there specific policies and requirements for labelling biosimilar medicines in the event of second medical use patents? Is this any different from the requirements for the original Biologic drug?

Like their biologic counterparts, biosimilar manufacturers must follow Health Canada labelling requirements, including if there are any new indications for the product. Manufacturers must also monitor any product class type-specific safety information that indicates a need for changes to the labelling of their specific biosimilar drug.

More generally, the product monograph for a biosimilar should include the following information:

• A statement indicating that the product is a biosimilar to the reference biologic drug;
• A statement that indications have been granted on the basis of similarity between the biosimilar and the reference biologic drug;
• Comparative data generated by the biosimilar sponsor on which the decision for market authorization was made summarized in a tabular format;
• Relevant safety and efficacy information from the product monograph of the biologic drug authorized in Canada to which a reference is made, including warnings and precautions, Adverse Drug Reactions/Adverse Drug Effects and key post-market safety information for all indications that are authorized for the biosimilar.

There should be no claims for bioequivalence or clinical equivalence between the biosimilar and the reference biologic drug.

14. Have there been any significant legal/judicial developments in relation to biosimilars in your country? (Including but not limited to IP, procurement, competition, misleading information campaign, access to reference comparator product)

There have been few judicial pronouncements on patents involving biologic drugs or biosimilars in Canada, although many cases are presently making their way through the Courts.

In 2019, the Quebec Court of Appeal rendered an important judgment quashing the Minister of Health’s decision to remove Remicade from the drug formulary list upon listing a biosimilar version; breaking with usual practice by the courts to defer to ministerial decisions. The Court’s main basis for reversing the decision was that the Minister had not followed the principles of procedural fairness in his relations with Janssen.[1]

Furthermore, in September 2021, Health Canada, as part of the Access Consortium, posted a document outlining key information for industry in filing an international work sharing submission for biosimilars. The objective is to offer:

• Streamlined process– internationally coordinated review to reduce duplication and burden
• Increased access– possibility of simultaneous access to markets of multiple countries
• Flexibility– adaptability in how regulators organize collaboration amongst each other on a given review and which countries a company chooses to submit applications
• Predictability– pre-determined milestones and targeted review timeframes.[2]

Also, Health Canada has held, until April 2022, a consultation on its proposed Handbook for healthcare professionals on biosimilar biologic drugs. This handbook was developed for the purpose of informing and educating healthcare professionals in Canada regarding biosimilars.

[1] Janssen inc v. Ministre de la Santé et des Services sociaux, 2019 QCCA 39. See also, the Fasken IP bulletin, “The Québec Court of Appeal Orders the Minister of Health to put Remicade Back on the List”, https://www.fasken.com/en/knowledge/2019/02/the-quebec-court-of-appeal-orders-the-minister-of-health-to-put-remicade-back-on-the-list which provides a summary of the case and includes a link to an English translation of the decision.

[2] Health Canada, “Facilitating Access Consortium Work Sharing for Biosimilars”, September 2021, online: https://www.canada.ca/en/health-canada/services/drugs-health-products/international-activities/australia-canada-singapore-switzerland-consortium/facilitating-access-work-sharing-biosimilars.html.

15. Are there proposals for reform or significant change to the legal, regulatory, procurement of biosimilars? If yes, when are they likely to come into force?

Health Canada is proposing to amend the Food and Drug Regulations in the spring of 2022 to modernize requirements for biologic drugs by repealing outdated requirements and replacing them with those that reflect current safety practices.[1]

Moreover, Chapter 17 of the Manual of Patent Office Practice on biotechnology and medicinal inventions has been reviewed in April 2018 to improve clarity and to include additional information relating to: the recent patent notice on correspondence procedures, the patent examination interview service, the presentation of sequence listings, and examination of multiple co-pending applications for reissue for the same patent.[2]

Finally, it remains to be seen whether other provinces, such as Ontario, will follow British Columbia’s lead and implement policies which only reimburse biosimilar drugs for certain indications.

[1] Canada Gazette, Part I, Volume 155, Number 31, “Government Notices”, July 31, 2021, online: https://gazette.gc.ca/rp-pr/p1/2021/2021-07-31/html/notice-avis-eng.html#na2

[2] Canadian Intellectual Property Office Patents, “MOPOP Revision History”, April 6, 2018, online: https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr00758.html#futurereview

Also from this Legal Handbook

Want to know more about the localization in Canada? Read on! Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. Are there any rules or regulations requiring and/or encouraging localization in your country? What is the legal framework defining these localization rules and policies?

As of November, 2021, drugs intended for the Canadian market that could cause or exacerbate a shortage are prohibited from being distributed outside of Canada. There are also related reporting obligations on drug and device manufactrers where shortages are anticipated.

In addition, all drugs imported into Canada must be imported into a Health Canada licensed establishment. This means that non-resident importers may have more difficulty importing without a local partner or establishment.

2. Have there been any recent significant changes involving localization rules? If yes, when did they take place and what did they involve?

Chapter 10, Question 1: Are there any rules or regulations requiring and/or encouraging localization in your country? Amendments to the Food and Drug Regulations and Medical Devices Regulations to address the shortage of drugs and medical devices in Canada were made in September 2021.

3. Is the process of obtaining a marketing authorization impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

No, the process of obtaining a market authorization is not impacted by localization policies in Canada.

4. Is the pricing process for pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

The pricing process for pharmaceutical products is not impacted by localization policies in Canada.

5. Is the reimbursement of pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

The reimbursement of pharmaceutical products is not impacted by localization policies in Canada.

6. Is the access to public or public tenders of pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

The public tenders of pharmaceutical products may be impacted by localization policies at the provincial level. For instance, certain provinces have policies that require procurement from local suppliers, to the extent compatible with Canada’s obligations under its international trade agreements.

A particular example is the province of Quebec which requires that a supplier to have a permanent place of business in Quebec or a territory covered by a trade agreement.[1]

In this context, the province of Quebec is party to a number of intergovernmental agreements. These agreements provide that procuring entities will treat goods, services and suppliers in the same manner as domestic goods, services and suppliers. The emphasis is on allowing for open competition and free trade.

Therefore, above certain Contract value thresholds, public bodies cannot discriminate against a supplier that is based in a province, state or country with which the Government of Quebec has signed one of these agreements.

Nevertheless, not all of Quebec’s intergovernmental agreements are applicable to all types of tenders, e.g. some only applies to certain public bodies and so may exclude hospital group purchasing organizations. In addition, intergovernmental agreements can also be subject to certain thresholds. For instance, certain public contracts may not be accessible to European countries bound by the Comprehensive Economic and Trade Agreement, Canada and The European Union (“CETA”) and may remain accessible to other Canadian provinces because the market threshold differs and is higher under CETA than it is under interprovincial agreements.[2]

Accordingly, in some cases, localization policies can impact public tenders of pharmaceutical products.

[1] See, Regulation respecting certain supply contracts of public bodies, CQLR c C-65.1, r 2, s. 6(2).

[2] As an example, a Quebec call for tenders above $100,000 should normally allow for tenderers established in any Canadian province, but not European countries. For countries bound by CETA, the current threshold is $340,600. See, the Comprehensive Economic and Trade Agreement, Canada and The European Union, 21 September 2017, at s 19-2 & 19-3 (Of Provisional Application as of 21 September 2017) [CETA] online: https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/toc-tdm.aspx?lang=eng.

7. Are import tariffs, importation and/or exportation permits, trade and/or taxation of pharmaceutical products impacted by localization policies in your country ? If yes, how so?

Tariffs: Canada’s import tariffs are not influenced by localization policies. With some rare exceptions, pharmaceuticals that are classified in Chapter 30 of the Harmonized Commodity Description and Coding System, may be imported into Canada on a duty free basis. In addition, most of the raw materials used to manufacture pharmaceuticals may also be imported on a duty free basis.

Furthermore, Canada has free trade agreements with virtually all of its major trading partners, and these agreements have eliminated importation tariffs on qualifying products, or seek to eliminate them within a number of years. Canada is also a member of the WTO. All goods imported from WTO member countries receive standard most favoured nation (MFN) tariff rates regardless of whether they have an establishment in Canada or not.

Import and Export Permits: Import and export permits are not subject to localization policies, except to the extent that importers are subject to local safety, quality, and labelling standards to enter the Canadian market. This may encourage corporations to develop a local presence, enter into local partnerships, or obtain local expertise.

Under its international trade obligations as a WTO member, Canada is not permitted to treat products imported into Canada differently than those manufactured locally, once they are imported from member state countries.

Taxation: Scientific research and experimental development tax credits offered in Canada by the federal and provincial governments are impacted by localization policies. Tax credits claimed by Canadian-controlled private corporations (i.e., corporations that are not controlled by one or more non-residents or public corporations) are generally refundable and available at enhanced rates.

In addition, various provincial governments offer investment and other income tax credits in respect of manufacturing and processing operations carried on in the provinces.

8. Are there any other incentives or advantages offered by the current local localization rules in your country? If yes, what are they?

Provincial and federal levels of government will often offer subsidies to local pharmaceutical corporations.

At the federal level the “Strategic Innovation Fund” provides broad grant and loan opportunities for corporations, including pharmaceutical and other health and biosciences corporations.[1]

Most provinces and territories have a general commercial development fund or an innovation fund under which pharmaceutical companies may apply for government grants or loans for the purpose of starting, or expanding their operations within a province.[2]

[1] Canada, Innovation, Science and Economic Development Canada, Overview of announced projects Strategic Innovation Fund, (4 July 2019) online: https://www.ic.gc.ca/eic/site/125.nsf/eng/00022.html; Canada, FedDev Ontario Business Scale-up and Productivity (BSP) Program (2019) online: https://www.feddevontario.gc.ca/eic/site/723.nsf/eng/h_00122.html?OpenDocument

[2] For example, British Columbia, innovate BC, (2018) online: https://innovatebc.ca/what-we-offer/get-funding/; Ontario, Government grants, loans, tax credits and support services for Ontario businesses, (26 June 2019) online: https://www.investinontario.com/incentive-programs-and-services; Manitoba, Province Launches Innovation Growth Program, Delivers Funding to Economic Development Partners, (6 June 2019) online: https://news.gov.mb.ca/news/index.html?item=45347; New Brunswick, Northern New Brunswick Economic Development and Innovation Fund, (date accessed: 10 July 2019) online: https://www2.gnb.ca/content/gnb/en/departments/regional_development/services/services_renderer.201252.Northern_New_Brunswick_Economic_Development_and_Innovation_Fund.html.

9. Are there discussions about the possibility of implementing localization policies in your country? If yes, what are the proposed reforms and when should they come into place?

The amendments to the Food and Drug Regulations and Medical Devices Regulations to address the shortage of drugs and medical devices in Canada made in September 2021 may be viewed as a response to U.S. efforts to import Canadian drugs to help reduce U.S. drugs costs.

On July 2020, the Trump administration announced the Safe Importation Action Plan. This plan allows U.S. states, wholesalers, pharmacists and drug manufacturers to import prescription drugs from a licensed wholesaler in Canada under specified conditions. Nevertheless, the Biden administration announced in May 2021, that they were not in a rush to allow states to import drugs from Canada, there are several issues to consider before authorizing an importation plan.

In addition, several states, including notably Vermont, Florida and Colorado have passed legislation that would allow drugs to be imported from Canada; at least for government-run programs such as Medicaid. Several other states are considering adoption of a similar program.

U.S. Federal legislations require that the Secretary of the U.S. Department of Health and Human Services must approve any state programs that would allow drugs to be imported from Canada.

In short, the state acts would allow the import of specific prescription drugs from Canada. These drugs would (i) be based on a list of prescription drugs with the same active ingredient, route of administration and strength as drugs approved by the U.S. Food and Drug Administration (“FDA”); (ii) be purchased from a Canadian seller certified by the FDA; and (iii) have the highest potential for cost savings.

Canadian suppliers, i.e. manufacturers, wholesale distributors, or pharmacies, could export these prescription drugs if they are in full compliance with Canadian laws as well as the U.S. Federal Food, Drug, and Cosmetic Act, including, applicable tracking requirements.

Moreover, the Canadian suppliers must agree to export the drugs at prices that will provide savings.

Also from this Legal Handbook

All legal aspects surrounding orphan drugs and rare diseases in Canadian Pharma. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. What is the definition of Rare Diseases in your country?

In Canada, “Rare Diseases” are defined as “life-threatening, debilitating or serious, and chronic conditions affecting a small number of patients, many of which predominantly affect children, as these diseases are often genetically based and appear at birth or in early childhood”.[1] The Canadian Organization for Rare Disorders defines a rare disease as one that affects fewer than one in 2,000 people.

[1] Government of Canada, “Investing in the Middle Class: Budget 2019”, March 19, 2019 at page 61, online: https://budget.gc.ca/2019/docs/plan/budget-2019-en.pdf

2. Does the designation of ‘Orphan Drug’ exist in your country? (Does it correspond with the definition of Rare Diseases?)

The designation “Orphan Drug” does not currently exist in Canada. Instead, the designation “Drugs for rare diseases” is used to refer to orphan drugs.

3. What is the regulatory framework for the authorization of an Orphan Drug? (Is this regulatory framework based on Rare Disease status or can it alternatively be based on Orphan Drug foreign status?)

There is currently no regulatory framework for the authorization of an Orphan Drug.

Health Canada proposed an Orphan Drug Regulatory Framework in 2012, but it was not enacted and, in October 2017, the federal Government deleted all references to the framework from the Ministry of Health’s website without notice or consultation.[1]

However, in 2019 the federal Government committed to creating a national strategy for drugs for rare diseases. In 2021, CADTH released the final report on drugs for rare diseases framework. Consultation on the final report took place in the summer of 2021. The objective is to launch the national strategy in 2022.

In the meantime, Orphan Drugs therefore follow the same regulatory approval process as other drugs in Canada. This standard pathway includes a “New Drug Submission”, which requires manufacturers to submit evidence of a drug’s safety, efficacy and quality to Health Canada. If a submission is acceptable, Health Canada will issue a Notice of Compliance (“NOC”), which allows a manufacturer to market the drug in Canada. There are some programs to help sponsor development and incentive, but there is currently no specialized Orphan Drug framework.

[1] Forrest, M. (2017, October 16). Health Canada Gives ‘Kiss of Death’ to Planned Policy for Rare-Disease Drugs. National Post.

4. Does your country have provisions for relaxed clinical trial/scientific evidence requirements in respect of Orphan Drugs as compared to other drugs?

No, Canada does not currently have provisions for relaxed clinical trial/scientific evidence requirements in respect of Orphan Drugs as compared to other drugs. However, in some cases, a Notice of Compliance with Conditions (“NOC/c”) may be issued.

In particular, market authorization through a NOC/c allows Health Canada to provide earlier market access to potentially life-saving drugs but requires that the manufacturer undertakes additional studies before a full NOC can be issued. This undertaking allows Health Canada to facilitate access based on promising evidence of clinical significance while monitoring the drug through enhanced post-market surveillance.[1]

[1] See: Health Canada Guidance Document: Notice of Compliance with Conditions (NOC/c), online: https://www.canada.ca/en/health-canada/services/drugs-health-products/drug-products/applications-submissions/guidance-documents/notice-compliance-conditions.html

5. Is there an expedited pathway for Orphan Drugs?

There is no expedited pathway specifically for Orphan Drugs, however, drug applications may generally be fast-tracked under one of two pathways: the Priority Review pathway or the NOC/c pathway described above.

Most new drugs have a review target of 300 days; however, the Priority Review pathway allows for the quickest review target of 180 calendar days; whereas the NOC/c pathway allows for an expedited 200-day target.

In both cases, the pathways are available to manufacturers if the drug is intended for the treatment, prevention or diagnosis of serious, life-threatening or severely debilitating diseases or conditions for which: (i) there is no alternative therapy available on the Canadian market or, (ii) where the new product represents a significant improvement in the benefit/risk profile over existing products.

However, the Priority Review pathway applies to drugs that show substantial evidence of clinical effectiveness, i.e. at least two adequate and well controlled clinical studies, each convincing on its own to establish effectiveness of the drug involved.

In contrast, the NOC/c pathway applies to drugs with promising evidence
of clinical effectiveness throughout the clinical trial phases. For example, the
data to support authorization under the NOC/c policy is often:

• limited due to a small number of patients eligible for clinical trial participation;
• based on surrogate marker data predictive of clinical benefit; or
• based on larger trials in which final outcomes of morbidity and mortality
  are lacking.

The data required for a NOC/c submission is therefore unlikely to meet the evidentiary requirements of the Priority Review Pathway.

In addition to these two pathways for drug expedited approval, the Special Access Program allows patients to access a drug which is not authorized in Canada under a shortened twenty-four hour application process for treatment, diagnosis, or prevention of serious or life-threatening conditions when conventional therapies have been considered and ruled out, have failed, are unsuitable or unavailable.

6. Are foreign marketing authorizations recognized in your jurisdiction for Orphan Drugs? If yes, marketing authorizations from which countries are recognized?

There are no foreign marketing authorizations recognized in Canada for Orphan Drugs.

7. Can Orphan Drugs be reimbursed? If so, is there a specific reimbursement procedure for Orphan Drugs?

There is currently no specific reimbursement procedure for Orphan Drugs. In general, drugs may be reimbursed if a public or private insurer deems it cost-effective based on a health technology assessment.

In exceptional cases, including, for example if a drug may be (i) a last resort (ii) for a chronic and (iii) serious medical condition, then a public or private plan may provide coverage for a medication that would otherwise not be reimbursed by the plan.

8. How are the prices of Orphan Drugs regulated?

The prices of Orphan Drugs are regulated in the same manner as other drugs in Canada. In the cases of patented drug, they are regulated by the Patented Medicines Review Board (“PMPRB”), which sets the maximum price for which a patented drug may be sold in Canada.

The prices of drugs are also negotiated by the pan-Canadian Pharmaceutical Alliance which represents a group of provinces, territories and other institutions, who, by combining their bargaining power, seek to reduce the cost of pharmaceuticals.

9. In case of reference price based on a basket of countries, what countries are included?

The PMPRB uses reference pricing to determine the maximum price for which a patented drug may be sold in Canada. As of July 1, 2022, the new basket of countries includes Australia, Belgium, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden and the United Kingdom.

10. Have there been any significant legal/judicial developments in relation to Orphan Drugs in your country?

Yes, on June 6, 2022 the Quebec Ministry of Health and Social Services published the Quebec Rare Diseases Policy. The Policy focuses on three key policies areas and objective: (i) awareness and training, (ii) easy and equitable access tp diagnosis, care and services and (iii) promotion of research, innovation and data collection.

11. Are there proposals for reform or significant change to the regulation of Orphan Drugs? If yes, when are they likely to come into force?

Yes, there are proposals for significant changes to the regulation of Orphan Drugs in Canada. The 2019 federal budget proposed a national strategy for drugs for rare diseases that involved  a distinct process and funding for specialized drugs.. The proposed reformation is stated to focus on five key elements:

1. The development of a national strategy to ensure uniform patient access to Orphan Drugs across the country;
2. The establishment of a unique drug approval pathway to improve patient access to Orphan Drugs;
3. The development of a structured evidence collection strategy to study the impact of Orphan Drugs on patients;
4. The negotiation of performance-based funding agreements with manufacturers of Orphan Drugs whereby the amount paid for an Orphan Drug will depend on the efficacy of the drug; and
5. Ensuring an approval process for Orphan Drugs that is both transparent and clearly communicated.[1][1] See: Government of Canada, “Investing in the Middle Class: Budget 2019”, March 19, 2019 at page 61, online: https://budget.gc.ca/2019/docs/plan/budget-2019-en.pdf

More recently, CADTH released the final report on the Framework for Drugs for Rare Diseases in 2021, which proposes that a single framework would make access fairer across the country, that an innovative approach to approval and coverage is supported and that sharing costs and pooling risk appears to be the most effective option.

Next steps include:

1. Working closely with provinces, territories, Indigenous partners and other stakeholders to develop a coordinated strategy that get patients the effective treatments they need;
2. Establishing common definitions of “rare diseases” and “high-cost drugs” and better guidelines for what constitute “benefits” and “improvements” for assessing rare-disease treatments;
3. Researching best practices in international jurisdictions (including France, Germany, the U.K. and Australia) to learn from them and avoid reinventing the wheel.
4. Ensuring Canada’s regulatory approach, drug pricing landscape, and Canadian research and development, commercialization and drug manufacturing capacity are conducive for rare-disease drugs; and
5. Considering how best to support patients more holistically, including diagnostics, screening and genetic testing.[1]

The objective is to launch the national strategy in 2022.

[1] See: Government of Canada, “Building a National Strategy for Drugs for Rare Diseases: What we Heard from Canadians”, July 26, 2021, online: https://www.canada.ca/en/health-canada/programs/consultation-national-strategy-high-cost-drugs-rare-diseases-online-engagement/what-we-heard.html

Also from this Legal Handbook

The legal framework for cannabinoid drugs, medical cannabis and opioids in Canada. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

Cannabinoid Drugs

1. Are Cannabinoid Drugs authorized in your country?

Yes. Cannabinoids can be the active ingredient of a drug product in Canada, provided that such product meets applicable safety, effectiveness and quality requirements under the Food and Drugs Act and its regulations. This means that Cannabinoid Drugs must be submitted for marketing authorization through the drug approval pathway. Among other things, the sponsor of a Cannabinoid Drug – as any other new drug – must demonstrate that the drug has potential therapeutic value that outweighs the risks associated with its use (e.g. adverse effects, toxicity). This is generally done via the submission of clinical trial results. Following a complete review of a New Drug Submission (NDS), Health Canada can approve a Cannabinoid Drug and issue a Notice of Compliance (NOC), as well as a Drug Identification Number (DIN) which permits the sponsor to market the drug for its approved indications in Canada.

2. What are the regulatory authorities with jurisdiction over Cannabinoid Drugs?

The regulatory authorities with overall jurisdiction over Cannabinoid Drugs are Health Canada, and more particularly the Health Products and Food Branch (HPFB) for any matter related to drugs (including Cannabinoid Drugs) and the Cannabis Legalization and Regulations Branch for any matter related to Cannabis (the active ingredient).

3. Is there a specific regulatory framework for the authorization, pricing, and reimbursement of Cannabinoid Drugs?

Cannabinoid Drugs – as any other drugs in Canada – can be authorized for sale in Canada once they have successfully gone through the federal drug review process pursuant to applicable requirements under the Food and Drugs Act and its regulations. Following a complete review of a New Drug Submission (NDS), Health Canada can approve a Cannabinoid Drug and issue a Notice of Compliance (NOC), as well as a Drug Identification Number (DIN) which permits the sponsor to market the drug for its approved indications. It is also important to note that in order to perform regulated activities with Cannabinoid Drugs, a person may also need to hold a Drug Establishment Licence (e.g. to fabricate, package/label, test, distribute, wholesale and/or import drugs) as well as a Cannabis Drug Licence (e.g. to possess Cannabis and/or produce or sell a drug containing Cannabis).

In Canada, the reimbursement of drug products is overseen by each provincial legislature. Each province has discretion whether or not to list a drug (or any indications of a drug) in the provincial formulary comprised of products covered by the provincial public drug plan. Cannabinoid Drugs are no exception. Certain federal bodies also have authority over their own drug plan, such as the Indigenous Services Canada’s First Nations and Inuit Health Branch or the Department of National Defence. The Canadian Agency for Drugs and Technologies in Health (CADTH) reviews drug listing submission for all provinces except Québec and the Institut National d’Excellence en Santé et en Services Sociaux (INESSS) do so in Québec. CADTH and INESSS offer listing recommendations based on pharmacoeconomic criteria and optimal use of medications, but each province has its own drug plan decision-maker and administrator. As a result, the reimbursement of Cannabinoid Drugs may differ from province to province and drug to drug.

Regarding pricing, the Patented Medicine Prices Review Board (PMPRB) has jurisdiction over patented drugs. The PMPRB regulates the patentees’ prices of patented medicines sold in Canada to ensure that they are not excessive. Note that the PMPRB’s authority derives from the Patent Act, so it has no authority to regulate the prices of non-patented drugs, including non-patented generic drugs. In addition to the PMPRB’s oversight over excessive pricing at the federal level, each province also controls the price of drugs listed in its drug formulary. Provinces often require the conclusion of a listing agreement including rebates or reimbursements conditions prior to listing a new drug or a new drug indication on their formulary. In order to generate more savings, provincial, territorial and federal plans also participate in the pan-Canadian Pharmaceutical Alliance (pCPA) and generally negotiate the financial components of formulary listing together.

4. Which are the cannabinoid drugs that have received market approval to date?

Based on the Health Canada Drug Product Database, Cannabinoid Drugs that have received market approval to date and are currently marketed in Canada include nabiximols (Sativex®) and nabilone (Cesamet®) and marinol. However, Marinol has been voluntarily withdrawn from the market by its manufacturer.

5. Who can prescribe Cannabinoid Drugs?

Cannabinoid Drugs can be prescribed by practitioners. Practitioners are persons who are registered and entitled under the laws of a province to practice in that province the profession of medicine, dentistry or veterinary medicine. In certain provinces, other healthcare professionals also have limited prescription privileges, including registered nurses and pharmacists for instance, but their prescription privilege does not extend to Cannabinoid Drugs at this time.

6. Is there a list of doctors authorized to prescribe Cannabinoid Drugs?

No. Any practitioner can prescribe Cannabinoid Drugs.

7. What approvals or notifications are required to prescribe Cannabinoid Drugs?

No approvals or notifications are required to prescribe Cannabinoid Drugs. In fact, any practitioner registered and authorized to prescribe drugs may prescribe Cannabinoid Drugs based on his/her medical opinion.

8. Which organizations are authorized to sell/distribute Cannabinoid Drugs available?

Drug manufacturers, wholesalers and distributors holding an appropriate Drug Establishment Licence and a Cannabis Drug Licence can sell and distribute Cannabinoid Drugs to drug manufacturers, wholesale druggists, pharmacists or the Government, including authorized governmental buying groups and hospitals.

Pharmacists and, to some extent, practitioners are allowed to sell and dispense Cannabinoid Drugs to patients under provincial laws, in accordance with a written prescription signed and dated by a practitioner.

9. Is there a list of retailers/distributors authorized to sell Cannabinoid Drugs?

No. There is no specific list for Cannabinoid Drugs. However, any pharmacist can sell and dispense Cannabinoid Drugs in accordance with a prescription signed and dated by a practitioner.

10. Are there proposals for reform or significant change to the regulation of Cannabinoid Drugs?

Canada legalized Cannabis for adult use on October 17, 2018. In addition to traditional requirements applicable to the sale and distribution of drugs, a person wishing to commercialize Cannabinoid Drugs must now seek a Cannabis Drug Licence in order to be allowed to possess Cannabis and/or produce or sell a drug containing Cannabis under the new Cannabis Act and its regulations. The Cannabis reform (including Cannabinoid Drugs) came into force on October 17, 2018 and Health Canada continues to provide additional guidance and issue complementary statements, policies and guidelines.

At the provincial level, many colleges of physicians and other professional bodies have reacted to the legalization and are proposing updated or additional professional standards and guidelines for their members.

11. When are they likely to come into force?

N/A

Medicinal Cannabis

12. Is Medicinal Cannabis authorized in the country?

Yes. Cannabis for medical purposes is legal throughout Canada. In fact, Canada even legalized Cannabis for adult (recreational) use on October 17, 2018. While the Cannabis Act and its regulations now provide for a comprehensive legal framework applicable to Cannabis for adult (recreational) use, the sale of Medicinal Cannabis is still subject to specific licensing requirements and a particular framework allowing access to Cannabis for medical purposes, including various rules applicable to distributors, healthcare professionals and patients.

13. What are the regulatory authorities with jurisdiction over Medicinal Cannabis?

Cannabis primarily falls under the jurisdiction of the federal Government. Health Canada has overall jurisdiction over Cannabis and has established a Cannabis Legalization and Regulations Branch.

Cannabis is also regulated by different provincial laws governing the sale, distribution and use of Cannabis in each Canadian province and territory. To some extent, municipalities also have some authority over the use of cannabis in public spaces. However, provincial and local laws and regulations typically apply to (recreational) Cannabis and the main regulatory authority with jurisdiction over Medicinal Cannabis remains Health Canada.

14. What is the regulatory framework for the authorization, pricing, and reimbursement of Medicinal Cannabis?

Since Health Canada remains the main regulatory authority with jurisdiction over Medicinal Cannabis, it must go through the same regulatory process for authorization.

At this time, provincial government and public plans do not reimburse Medicinal Cannabis. However, drug reimbursement policy in the private sector differ for each private insurance company or private plan administrator. Some may offer a certain coverage. There are also a few programs that do provide some financial assistance.

15. How is the production and import of Medicinal Cannabis regulated and by which agencies/authorities?

It is worth noting that, since the legalization on October 17, 2018, Cannabis can be cultivated, processed, tested and/or sold by a person holding the appropriate classes of licences that authorize such activities – whether it is intended for adult (recreational) use or medical purposes.

In particular, Medicinal Cannabis can be accessible in accordance with federal legislation, under the Cannabis Act and its regulations. An individual can obtain Medicinal Cannabis for his/her own medical purposes either (i) by registering with the holder of a Licence for Sale for medical purposes and purchasing Medicinal Cannabis from this person, or (ii) by registering with the Minister in order to produce his/her Medicinal Cannabis. To obtain registration, the individual must provide information, including a medical document from a healthcare practitioner recommending the use of Medicinal Cannabis.

There are currently no pricing requirements applicable to Cannabis, whether medicinal or non-medicinal (recreational), and this product is sold in a free competition environment, subject to provincial and territorial restrictions in the case of (recreational) Cannabis. Note that the Canada Revenue Agency imposes certain duties to a cannabis licensee who packages cannabis products.

Public and private payors do not cover Cannabis, unless medically required in exceptional circumstances. As for the reimbursement of drugs, coverage is supervised by the provincial legislature and certain federal plans; therefore, reimbursement may differ from province to province. By way of illustration, Medicinal Cannabis is not reimbursed under the basic plan in the province of Québec, however, some private insurers as well as organizations such as Veteran Affairs Canada may reimburse part of the cost of Medicinal Cannabis.

16. What approval or notifications are necessary to produce or import Medicinal Cannabis?

All aspects of the production and importation are regulated by the Cannabis Act and the Cannabis Regulations. For production, a producer must obtain a licence for cultivation, processing, analytical testing and/or research depending on the activities carried out at a site. Cannabis producers must comply with many requirements and restrictions concerning, inter alia, key personnel security clearances, physical security measures, Good Production Practices, packaging and labelling, record‑keeping, reporting, etc.

In Canada, importing and exporting Cannabis for adult (recreational) use remains prohibited. A holder of a licence is only authorized to import or export Cannabis for medical or scientific purposes. In addition to applicable licensing requirements, they must hold an import or export permit, as applicable, for each shipment of Medicinal Cannabis that is imported or exported.

The authority responsible for compliance and enforcement of the regulations is Health Canada. The Canada Border Services Agency is also closely involved with respect to importation and exportation matters.

17. What is the regulatory framework for the marketing and distribution of Medicinal Cannabis?

To produce fresh or dried marihuana or marihuana plants or seeds, a producer must obtain a Licence for Cultivation. To produce Cannabis oil or Cannabis resin, a producer must obtain a Licence for Processing. In order to obtain such licensing, a producer must submit a comprehensive application and follow the regulatory approval pathway, which includes extensive security checks and a rigorous application review. Key factors in application processing times are the quality of the application and whether it contains sufficient information and evidence demonstrating how it meets the security measures, the Good Production Practices and the record-keeping requirements.

A Cannabis Licence under the Excise Act, 2001 is also required if a person cultivates, produces or packages Cannabis products. The Canada Revenue Agency imposes certain duties to a Cannabis licensee who packages Cannabis products.

To import Medicinal Cannabis, the licensed producer must hold an import permit for each shipment of Cannabis that is imported. This permit is obtained via an application for a licence or a permit with the Minister.

Licences and permits authorizing the importation of Cannabis may be issued only in respect of Cannabis for medical or scientific purposes or in respect of industrial hemp. Importing or exporting recreational Cannabis remains prohibited.

18. How can patients obtain Medicinal Cannabis?

The Cannabis Act makes no distinction between Medicinal Cannabis and non-medicinal (recreational) Cannabis in terms of promotion, display and general packaging and labeling restrictions. To promote and distribute Cannabis, the holder of a licence must comply with many regulatory requirements, which are listed in the Cannabis Act and the Cannabis Regulations (other requirements may be added in subsequent regulations).

In Canada, there is currently an overarching prohibition against any form of promotion of Cannabis, Cannabis accessories and services related to Cannabis. Promotion can only be disseminated under limited exceptions, including, for instance, (i) promotion by a person that is authorized to produce, sell or distribute Cannabis, that is directed at any person that is authorized to produce, sell or distribute Cannabis, but not, either directly or indirectly, at consumers (i.e. B2B marketing between license holders), (ii) promotion by means of informational promotion or brand-preference promotion (as defined under the Cannabis Act) if the promotion is in a communication that is addressed and sent to an individual who is 18 years of age or older and is identified by name; in a place where young persons are not permitted by law; or communicated by means of a telecommunication, where the person responsible for the content of the promotion has taken reasonable steps to ensure that the promotion cannot be accessed by a young person, (iii) promotion at the point of sale if the promotion indicates only Cannabis availability, its price or its availability and price.

By virtue of the federal regime, a person may also promote Cannabis by displaying a brand element of Cannabis on a thing that is not Cannabis, provided that this thing is not associated with young persons; there are no reasonable grounds to believe it could be appealing to young persons; and it is not associated with a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring. However, it remains prohibited to display either brand elements of Cannabis or the name of a person that produces, sells or distributes Cannabis in a promotion that is used in the sponsorship of a person, entity, event, activity or facility. It is also prohibited to display same on any facility used for a sports or cultural event or activity.

Importantly, the province of Québec has also introduced its own Cannabis promotion restrictions under the provincial Cannabis Regulation Act. Particular prohibitions are therefore applicable in the province of Québec. For example, it is specifically prohibited in Québec to sell or give an object that is not Cannabis or supply such an object if a name, logo, distinguishing guise, design, image or slogan that is directly associated with Cannabis, a brand of Cannabis or a Cannabis producer appears on the object.

Regarding distribution, the holder of a licence must also comply with many restrictions related to the packaging and labelling of Cannabis (e.g. the packaging must be opaque, bear mandatory health warnings and the standardized Cannabis symbol, not contain more than the equivalent of 30g of dried Cannabis, etc.). There are a considerable number of technical rules and standards applicable to packaging, labeling and distribution of Cannabis. A document entitled Consumer Information – Cannabis, published by the Government of Canada, must also be given to the patient.

If Medicinal Cannabis is distributed in a hospital, it must be distributed or sold in the container in which it was received from the holder of the licence for sale or the holder of the licence for processing and a label must be applied on the container indicating specific information (name of the patient, daily quantity to be used, the date of the distribution, etc.).

19. Who can prescribe Medicinal Cannabis?

A patient must acquire a medical document from a healthcare practitioner. He/she can then obtain Medicinal Cannabis for his/her own medical purposes either (i) by registering with the holder of a Licence for Sale for medical purposes and purchasing Medicinal Cannabis from this person, or (ii) by registering with the Minister in order to produce his/her own Medicinal Cannabis. A practitioner may also consent to receive Cannabis, other than plants or plant seeds, on behalf of a patient.

20. Is there a list of doctors authorized to prescribe Medicinal Cannabis?

Medicinal Cannabis can be prescribed by healthcare practitioner. A healthcare practitioner is either a medical practitioner who is entitled under the laws of a province to practise medicine in that province or a nurse practitioner who is entitled under the laws of a province to practise as a nurse practitioner.

Legislation does not require that healthcare practitioner be registered to prescribe Medicinal Cannabis. However, the Minister may issue a notice preventing a specific healthcare practitioner from issuing Medicinal Cannabis prescriptions.

In addition, the holder of a Licence for Sale must provide a monthly report to Health Canada, including sales data and statistics and containing the given name, surname, profession and business address of each healthcare practitioner who provided a medical document. This information is not published by Health Canada.

21. What approvals or notifications are required to prescribe Medicinal Cannabis?

There is no approval or notification required to prescribe Medicinal Cannabis. However, a healthcare practitioner can only prescribe Medicinal Cannabis if Cannabis is required for the condition for which the patient is receiving treatment. Professional standards and guidelines related to Cannabis prescription are published by colleges of physicians and relevant professional bodies in each provincial jurisdiction.

22. Where is Medicinal Cannabis available?

Medicinal Cannabis is available from holders of Licence for Sale of medical cannabis, and, in some circumstances, in hospitals. Patients must be registered with a licensee to purchase Medicinal Cannabis. If registered with the Minister, a patient may also cultivate a limited amount of Medicinal Cannabis.

While it may still be relevant for a patient to obtain Medicinal Cannabis in accordance with the rules applicable to access to Cannabis for medical purposes (e.g. to ensure medical follow-up, to obtain insurance coverage, etc.), it should be recalled that Cannabis for adult (recreational) use is legal in Canada since October 17, 2018. As a result, Cannabis is now available at retail and online for Canadians who may purchase it from an authorized retailer or public body responsible for the sale of Cannabis, depending on the regime applicable in the province where the individual is located.

23. Is there a list of retailers authorized to sell Medicinal Cannabis?

Yes. There is a list of licensed producers. The list is available at: https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/licensed-producers/authorized-licensed-producers-medical-purposes.html. Health Canada also publishes Quarterly Compliance and Enforcement Report including inspection data summary for each inspected site.

24. Are there proposals for reform or significant change to the regulation of Medicinal Cannabis?

Health Canada is currently working on a Forward Regulatory Plan 2022-2024: Amendments to the Cannabis Regulations, the Industrial Hemp Regulations and the Cannabis Tracking System Order (Streamlining Certain Regulatory Obligations). This plan aims to simplify and reduce requirements related to record keeping, reporting and notifications, and to provide more flexibility in meeting certain requirements related to matters such as antimicrobial treatment.

Opioid Drugs

25. Are Opioid Drugs authorized in your country?

Yes. Opioid Drugs approved by Health Canada can be prescribed as a medical treatment and distributed in compliance with the stringent regulatory framework established by the Food and Drugs Act and its regulations, the Controlled Drugs and Substances Act and the Narcotic Control Regulations. Outside of this regulated context, Opioids are illegal substances the trafficking of which is a criminal offence in Canada.

26. What are the regulatory authorities with jurisdiction over Opioid Drugs?

The regulatory authority with overall jurisdiction over Opioid Drugs is Health Canada and more particularly the Office of Controlled Substances and the Opioid Response Team.

27. Is there a specific regulatory framework for the authorization, pricing, and reimbursement of Opioid Drugs?

Opioid Drugs – as any other drugs in Canada – can be authorized for sale in Canada once they have successfully gone through the federal drug review process pursuant to applicable requirements under the Food and Drugs Act and its regulations. Additional requirements apply under the Controlled Drugs and Substances Act and the Narcotic Control Regulations, including particular licencing requirements for distributors.

Pricing and reimbursement considerations applied to drug products are also applicable to Opioid Drugs, as any other drugs. You may refer to the Response to Question 3 about Cannabinoid Drugs for more details.

28. Which are the Opioid Drugs that have received market approval to date?

Based on the Health Canada Drug Product Database, some Opioid Drugs that have received market approval to date include fentanyl (Duragesic®), hydromorphone (Dilaudid®, Exalgo®), hydrocodone (Vicodin®, Norco®), morphine (Astramorph®, Avinza®), methadone (Diskets®, Dolophine®, Methadose®, Methadose Sugar-Free®), mépéridine (Demerol®), oxycodone (OxyContin®, OxyNEO®, Percocet®, Percodan®) and codeine (Tylenol® 3, 4).

29. Who can prescribe Opioid Drugs?

Opioid Drugs, as any other prescription drugs, can be prescribed by practitioners. Practitioners are persons who are registered and entitled under the laws of a province to practise in that province the profession of medicine, dentistry or veterinary medicine. In addition, under the New Classes of Practitioners Regulations, and depending on the provisions of each province and with some limitations, a midwife, nurse practitioner or podiatrist, as a practitioner, may prescribe or possess a listed substance under the Narcotic Control Regulations including some Opioid Drugs.

In certain provinces, other healthcare professionals also have limited prescription privileges, including registered nurses and pharmacists for instance, but their prescription privilege does not extend to Opioid Drugs at this time.

30. Is there a list of doctors authorized to prescribe Opioid Drugs?

No. Any practitioner can prescribe Opioid Drugs.

31. What approvals or notifications are required to prescribe Opioid Drugs?

No approvals or notifications are required to prescribe Opioid Drugs. In fact, any practitioner registered and authorized to prescribe drugs may prescribe Opioid Drugs based on his/her medical opinion.

32. Which organizations are authorized to sell/distribute Opioid Drugs available?

To be authorized to sell/distribute Opioids Drugs, organizations must obtain a dealer’s license issued pursuant to the section 10.1 of the Narcotic Control Regulations. A dealer’s licence must be obtained for each site at which the organizatons intend to conduct activities by submitting an application to the Minister that contains certains informations. A licensed dealer may, subject to the terms and conditions of their licence, produce, make, assemble, sell, provide, transport, send or deliver Opioid Drugs as specified in their licence. They cannot sell to patients.

Pharmacists and, to some extent, practitioners are allowed to sell and dispense Opioid Drugs to patients under provincial laws, in accordance with a written order or a prescription signed and dated by a practitioner.

33. Is there a list of retailers/distributors authorized to sell Opioid Drugs?

No. There is no public list of licensed dealers in Canada. However, any pharmacist can sell and dispense Opioid Drugs in accordance with a prescription signed and dated by a practitioner.

34. Are there proposals for reform or significant change to the regulation of Opioid Drugs?

Health Canada has begun to initiate a number of regulatory measures to restrict the marketing and advertising of Opioids. For example, all prescription Opioids must now carry a warning sticker. In addition, Health Canada recently began requiring pharmaceutical companies to develop and implement risk-management plans aimed at reducing the potential harms associated with the use of Opioids.

In June 2018, Health Canada also proposed to further restrict drug manufacturer’s advertising of Opioids and began consulting on the scope and intent of possible restrictions including:

• Limiting visits from sales reps to healthcare professionals;
• Limiting conferences and educational courses sponsored by Opioid makes; and
• Limiting Opioid ads in scientific journals;

In March 2019, Health Canada announced that it is considering further restricting the marketing and advertising of opioids by proposing additional terms and conditions for prescription opioid-containing products. The proposed additional terms and conditions restrict all advertising materials of class B opioids provided to health care professionals to only verbatim statements from the Health Canada authorized product monograph.

In 2018, British Columbia fileda class action lawsuit against over 40 Opioid manufacturers, wholesalers and distributors before the Supreme Court of British Columbia. The Government alleges that companies deceived prescribers and patients about the risks and benefits of Opioids, and that the companies have harmed the public health-care system. A 2019 lawsuit filed in Manitoba is seeking more than $1 billion in damages to hold 3) pharmaceutical companies responsible for the public health opioid crisis. A similar lawsuit was filed in Ontario in May 2019. Since then, all other Canadian provinces and territories, plus the federal Government, have joined B.C.’s court action. There is a proposed settlement with Purdue Canada agreed by all federal, provincial and territorial governments. This settlement is the largest of a governmental health claim in Canadian history. The proposed agreement is still subject to final approval by the courts. B.C.’s application to certify its class-action lawsuit in the B.C. Supreme Court has been scheduled for fall 2023.

35. When are they likely to come into force?

Health Canada is still working on the restriction of marketing and advertising of opoids in Canada but has already imposed terms and conditions on certain manufacturers.

Also from this Legal Handbook

An insight into upcoming regulatory reforms affecting Canadian pharma. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for USD 99.

1. Are there proposals for reform or significant change to the healthcare system?

There are three significant changes which may affect or impact healthcare in Canada.

NATIONAL PHARMACARE

Currently, Canada is the only member country of the Organization for Economic Co-operation and Development with universal public health care that does not also have a national drug insurance plan, i.e. a single system of public insurance coverage for prescription drugs. This may be explained by the fact that healthcare is a provincial competence under Canadian consitution, so pharmacare plans are handled at the provincial and territorial level for the most part.

Nevertheless, the Canadian government is currently exploring the implementation of a national pharmacare system. In Budget 2018, the government established an Advisory Council on the Implementation of National Pharmacare to provide independent advice on how to best implement national pharmacare in a manner that is affordable for Canadians and their families, employers and governments.

In the summer of 2021, the Canadian government created the pan-Canadian advisory panel on a Framework for a prescription drug list.

DRUG PRICING

On December 1, 2017, the federal Government published proposed changes to the Patented Medicines Regulations in order to provide the PMPRB with additional tools to control the prices of patented drugs.

In this context, the federal Government has proposed the following regulatory changes:

• Introduce new, economics-based price regulatory factors to enable the PMPRB to ensure non-excessive prices that reflect value and Canada’s willingness and ability to pay for patented medicines;
• Update the schedule of countries used by the PMPRB for international price comparisons (now the PMPRB 7) to include countries with similar consumer protection priorities, economic wealth and marketed medicines as Canada; and,
• Requiring patentees to report price and revenue information net of all price adjustments such as direct or indirect third party discounts or rebates, including notably product listing agreements. This would ensure that the PMPRB is fully informed of the actual prices for patented medicines in Canada and enhance the relevance and impact of domestic price comparisons.

The proposed amendments to the drug pricing framework were challenged in the Federal Court of Canada, which struck down the compeled disclosure of third-party rebates and at the Quebec Court of Appeal, which struck down the compeled disclosure of third-party rebates, as well as the two new economics factor.   The mandate of the PMPRB has also been expressly constrained as preventing excessive pricing as a result of patent abuse and not price control generally.

National Strategy for Drugs for Rare Diseases

In 2019, the Canadian government committed to implementing a national strategy for drugs for rare diseases. The goal is to improve patient access to high-cost drugs for rare diseases and ensure that access is consistent across the country. In addition, the government wants to ensure decisions on funding high-cost drugs are informed by the best available evidence and does not put pressure on the sustainability of the Canadian health care system. As of 2022, the government of Canada is still working towards to launch the national strategy for drugs for rare diseases.

2. When are they likely to come into force?

It is not clear if and when a national pharmacare system would come into effect.

The federal Government’s proposed amendments to the drug pricing framework were expected to come into force on January 1, 2019. However, due to the legal challenges as well as the COVID-10 pandemic, this date was delayed until July 1, 2022. Patentees has since began providing pricing information based on the new basket of countries. Currently, only interim guidelines are in place to assess the prices of patented medicines. Final guidelines are expected in the Fall of 2022.

The objective of the federal Government’s is to lauch the national strategy for drugs for rare diseases in 2022.

Also from this Legal Handbook

The low-down on the situation regarding patents and trademarks in Canadian pharma. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. What are the basic requirements to obtain patent and trademark protection?

In order to obtain patent or trademark protection, one must submit an application to the Canadian Intellectual Property Office (“CIPO”) and comply with the formalities of the application process set out by the agency. All forms and guidelines are available on the CIPO website. Trademark registration lasts for fifteen years and is renewable indefinitely (presuming continuous use), while a patent is valid for a single term of twenty years.

2. What agencies or bodies regulate patents and trademarks?

In Canada, CIPO is responsible for patent and trademark regulation. The PMPRB regulates the pricing of patented medicines.

3. What products, substances, and processes can be protected by patents or trademarks and what types cannot be protected?

TRADEMARKS

Under Canadian intellectual property (“IP”) law, any word, sound, design, or combination thereof may be registered as a trademark if it is used to distinguish the goods or services of a person or an organization, or to signal certain qualities of the goods or services to the consumer from those of others. Currently, scents and tastes may not be trademarked under Canadian IP law.

Furthermore, the following marks may not be registered as a trademark under Canadian IP law: marks that include the name and surname of a person, marks that are clearly descriptive or deceptively misdescriptive, marks that refer (misleadingly or not) to the place of origin of the product, marks that use the name of the good or service in a different language, marks that are confusingly similar to existing or pending trademarks, and marks that are confusingly similar to prohibited trademarks, namely official marks that are controlled by specific institutions.

PATENTS

In the pharmaceutical industry, patents provide drug innovators a period of market exclusivity, during which generic manufacturers are prohibited from manufacturing or selling the patented product. Typically, commercially successful drugs will have numerous patents disclosing the active ingredient(s), coatings, therapeutic indications, dosing, manufacturing methods and other aspects of the drug.

There are three main criteria for the patentability of an invention: it must be novel, useful, and inventive (or non-obvious). Novelty is met if the invention (or the improvement thereof) is the first of its kind in the world. Canada operates on a first-to-file system, and as such, a patentable invention must be “new” as of the application filing date. Utility is met if the invention has a useful function and is operable. It is not necessary to show commercial success in the patent application to meet the utility requirement, but commercial success may be an indicator of non-obviousness in the case of an attempt to invalidate a patent. Finally, inventiveness is met if the invention constitutes the development of an entirely new technology or the improvement of an existing one that would not have otherwise been obvious to a person working in the respective field, that is a person skilled in the art in light of the common general knowledge and the state of the art as a whole and without any particular creativity.

A patent may be granted to an invention that is either an art, a product, a composition, a machine, a process, or an improvement of any of these. The invention described and claimed in the patent application must be reduced to a practical form and not be a disembodied idea or concept. As such, higher life forms, scientific principles, mere discoveries of nature, abstract (mathematical) theorems, purely mental operations and forms of energy are not patentable. The purpose of these preclusions is to distinguish disembodied inventions that attempt to monopolize natural phenomena or laws of nature from the practical applications of such principles. Moreover, while diagnostic methods are generally patentable, methods of medical treatment are not.

In Canada, an innovator may submit a patent for listing on the Patent Register created by the Patented Medicines (Notice of Compliance) (hereinafter “PMNOC”) Regulations for each relevant patent to its drug submission. Where an innovator is successful in having its patent(s) listed for a particular drug, the PM(NOC) Regulations operate to prevent regulatory approval from being granted to a generic competitor until the competitor establishes that its allegations of invalidity or noninfringement of the innovator’s patent rights are justified.

4. How can patents and trademarks be revoked?

TRADEMARKS

The owner of a registered trademark can lose that right by having the trademark expunged or removed from the Register of Trademarks. In a non-use expungement proceeding, any party, including the Trademark Registrar, may request that CIPO require the trademark registrant to demonstrate they have used the trademark in accordance with the listed goods and services within the last three-year period. In the event that the registrant cannot show evidence of use, nor any special circumstances justifying the non-use of the trademark, the registration will be expunged. Once the Registrar has rendered a final decision to expunge the trademark or amend or maintain the registration, the registrant or other party may appeal to the Federal Court of Canada.

A registered trademark may also be declared invalid and therefore removed from the Register and deemed unenforceable to third parties. There are four grounds for invalidating a trademark:

• Unregistrability: in the event that the trademark is deemed to have not complied with trademark law requirements at the time of its registration;
• Non-distinctiveness: if it can be shown that a trademark is not distinctive of the registrant’s goods or services;
• Abandonment: if it can be shown that a trademark has been abandoned due to non-use in Canada or the owner’s intention to abandon the mark; and,
• Non-entitlement: if it can be shown that the registrant was not the person entitled to have the trademark registered.

PATENTS

A patent may be invalidated based on the following grounds:

• Anticipation: a patent must not be anticipated by a prior document. To prove anticipation, one must be able to look at a prior, single document and find in it all the information necessary to produce the claimed invention without the use of any inventive skill;
• Obviousness: a patent must be inventive or non-obvious. There is a four-step test to prove obviousness: first, identify the person skilled in the art and the general knowledge of that person; second, identify the inventive concept of the patent claim; third, identify any differences that may exist between that which comprises the state of the art and the inventive concept of the claim; and, fourth, as if without any knowledge of the invention claimed, assess whether these differences would have been obvious to the person skilled in the art or whether they require any degree of invention;
• Double patenting: a patent must not be granted to an invention for which there already exists a patent, where at least one claim of the first and second patents is identical (coterminous double patenting) or where the subject matter of the second patent becomes obvious in light of the first (obviousness double patenting);
• Covetous claiming: patent claims are covetous if they exceed their permissible scope by exceeding the scope of the invention that was actually made or the invention described in the patent specification;
• Ambiguity: a patent claim must define distinctly and in explicit terms the subject matter for which exclusive rights are claimed;
• Lack of sufficient disclosure: a patent must fully describe the invention in the specification and, as such, should enable a person skilled in the art to implement the invention described in the patent and make the same successful use of the invention;
• Lack of utility: a patent must describe an invention that is useful, and the invention must be operable or do what the patent claims it will do. Patent utility must be established as of the claim date, either by demonstration or sound prediction or through a promise (as of 2017, a patentee is no longer held to the promise of the claims);
• Unpatentable subject matter: disembodied ideas or concepts are unpatentable. For example, Canadian case law has determined that methods of medical treatment, higher life forms (including plant and animal forms), architectural plans, methods involving professional skill, and business methods with no practical application are unpatentable; and,
• Fraud on the Patent Office: a patent will be invalidated if any material allegations in the patent petition are untrue or if a willful omission or addition, with the purpose of misleading, is made in the petition.

5. Are foreign patents and trademarks recognized and under what circumstances?

TRADEMARKS

Foreign trademarks may be recognized in Canada to the extent that they are used or made known in Canada (i.e. are well known by the Canadian public through advertising or the distribution of the goods or services it represents) and are not confusing with a trademark previously registered or used or made known in Canada. Likewise, a foreign trademark, duly registered in its country of origin, may be registered in Canada insofar as it is not confusing with a trademark previously registered or used or made known in Canada. A foreign trademark, which is unregistered in Canada and to the extent that it is used or made known in Canada, may oppose a third party in Canada for trademark infringement inasmuch as the third party operates an unregistered trademark in Canada and cannot claim prior use or having been made known in Canada.

Like the United States and other common law jurisdictions, Canada operates on an as-used basis, as opposed to an as-filed basis, upon which many parts of the world operate, including the European Union. Canadian IP law thus recognizes trademark rights based on the goodwill that has accrued solely from using an unregistered mark. However, Canada is set to modernize its IP framework in 2019 so as to adapt to international standards and implement widely adopted international treaties. The use of a trademark, whether its proposed or prior use in Canada or its actual use elsewhere in the world, will no longer be a prerequisite for registration. A trademark application will therefore be registered even if there is no intent to use or there is no actual use of the mark in Canada or abroad. This modernization will be helpful for foreign trademark owners looking to benefit from trademark registration during the pre-commercialization phase of their good or service.

Furthermore, acceding to the “Protocol for the Madrid Agreement Concerning the International Registration of Marks” will offer the possibility of obtaining trademark protection in all member countries through a single international application filed with the World Intellectual Property Organization (“WIPO”). As well, Canada will use the Nice Classification system, administered by WIPO, used to categorize goods and services for the purposes of registering trademarks.

In Canada, it is currently possible to benefit from the Paris Convention for the Protection of Industrial Property (“Paris Convention”) provision that allows a trademark to be filed in any treaty member jurisdiction within six months from the initial filing date in another member jurisdiction. The subsequently-filed Canadian application will be able to claim the filing date from the initial foreign application and take precedence over any confusingly similar application filed in the priority period.

PATENTS

Foreign patents do not protect an invention in Canada. One must apply for a foreign patent either within Canada, via CIPO under the Patent Cooperation Treaty (“PCT”) or directly with the patent office of the foreign country concerned. As a member of the Paris Convention, it is possible to invoke “convention priority” in Canada, meaning that a filing date in one member country will be recognized by all the other member countries provided one files in those countries within a year of first filing. As such, CIPO will recognize an earlier foreign filing date as long as a Canadian patent application is filed within one year of the foreign filing date and a priority claim is made within sixteen months from that date. The application will be published eighteen months after the convention priority date, not the Canadian filing date. Likewise, it is possible to claim convention priority based on an earlier filed Canadian application.

One may apply for a foreign patent from within Canada through PCT, administered by WIPO. The PCT provides a standard international filing procedure that is shared by the treaty’s member countries. Eighteen months after filing (or after the priority date), the application is made available to the public.

6. Are there any non-patent/trademark barriers to competition to protect medicines or devices?

Most non-patent/trademark barriers to competition to protect medicines or devices were outlined above, including notably, the Health Canada approval/NOC and inspection process. See Regulatory, Pricing and Reimbursement Overview , Question 3.

In addition, data protection provisions in the Food and Drug Regulations guarantee innovative drugs a minimum period of market exclusivity. A generic drug manufacturer cannot apply for regulatory approval, by establishing its bioequivalence to the brand name drug, until the brand drug has been on the market for six years. The minister cannot approve a submission and shall not issue a notice of compliance to a generic manufacturer until the brand drug has been on the market for at least eight years.

Note that it is prohibited to prevent a generic manufacturer from obtaining a sample of the reference product for bioequivalence testing.[1] The Competition Bureau provides guidelines to ensure appropriate access to samples of the reference product for generic manufacturer.

[1] Government of Canada, “Joint Notice on Collaboration between the Competition Bureau and Health Products and Food Branch of Health Canada”, January 10, 2022, online: https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04615.html

7. Are there restrictions on the types of medicines or devices that can be granted patent and trademark protection?

There are no restrictions on the types of medicines or devices that can be granted patent or trademark protection insofar as the medicines or devices comply with Canadian IP law and drug regulation.

8. Must a patent or trademark license agreement with a foreign licensor be approved or accepted by any government or regulatory body?

Licence agreements in Canada may cover virtually any form of IP, including patents and registered and unregistered trademarks. Generally speaking, any business entity established by a foreign licensor in Canada and any joint venture involving a foreign licensor may conduct business in Canada, with or without a domestic subsidiary or branch office.

No filing or regulatory review process is required in advance of carrying out licencing activities in Canada. Licence agreements are made subject to normal contractual rules and obligations. A foreign licensor that plans to conduct business in Canada, however, must notify Industry Canada as required by the Investment Canada Act.

Regarding trademarks, the Trade-Marks Act provides that a licensee’s use of a trademark is deemed to have the same effect as that of the owner of the trademark, thus preserving the distinctiveness of a licenced mark by attributing any use of the mark to one source only (i.e. the owner of the licenced mark). The protection afforded to the owner of a licensed trademark is provided only to the extent that the owner complies with the requirements of the law, namely, giving public notice of the fact that the use of the trademark is licenced use.

As for patents, the Patent Act provides that for a patent licence to have effect in Canada and be enforceable against third parties, the patent owner must register the licence agreement with CIPO.

Also from this Legal Handbook

All about product liability in Canadian pharma. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. What types of liability are recognized in your jurisdiction?

In general terms, product liability arises from claims in contract or civil wrongs under the common law or civil code, depending on the province. Plaintiffs can hold manufacturers concurrently liable in either contract or civil wrongs.

• Contractual Liability

Plaintiffs that are party to a contract with a defendant manufacturer may make a claim in contract. In contract law, plaintiffs can enforce express terms or terms implied from legislation, trade practice and custom against defendant manufacturers. Common law provinces have enacted legislation requiring manufacturers to provide warranties of product quality and fitness, and the Civil Code of Québec requires manufacturers to provide a warranty of quality, including a warranty against latent defects. Consumer protection acts across Canada further legislate into consumer contracts implied terms of description, fitness, merchantability, and durability of the product, and provide consumers additional remedies for false, misleading, or deceptive representations.

• Civil Liability

Plaintiffs that are not party to a contract must claim under a civil wrong. Common law plaintiffs can claim under the tort of negligence. Specific claims include negligent manufacture of a product, negligent design of a product, or the failure to warn users of product dangers. Negligence claims require proof that the product was defective, that the defendant owed a duty of care to the plaintiff, that the defendant negligently breached the standard of care with respect to the product, that the plaintiff’s damages were foreseeable, and that the defect caused or contributed to the plaintiff’s damages. Québec plaintiffs can claim under a special liability regime in the Civil Code of Québec that protects against safety defects, such as defects in design, manufacture, or preservation, as well as the lack of sufficient instructions, safety precautions, or warnings. This regime requires no proof of negligence. Plaintiffs need only to prove the existence of the product’s safety defect, the damage suffered and a causal link between the two to hold the manufacturer liable.

2. How do these types of liabilities apply to the manufacturers of medicines and devices?

Contractual liability typically applies after the purchase of medicines or medical devices which involve a contract of sale containing express and implied terms, including warranties. Civil liability applies after the purchase of medicines or medical devices and extends past the original purchaser to third parties users who are harmed by the use of the medicine or device.

Manufacturers owe a duty of care to users for the quality, efficacy, and safety of the medicines or devices. Medicines or devices must provide their purported medical effects to users, and must not be noxious. Manufacturers also have a duty to warn users of any risks or dangers that their medicines or devices might pose. These obligations continue throughout all stages of a medicine or device, and manufacturers must update their scientific knowledge and report newly discovered risks. The standard of care is very high for pharmaceutical manufacturers. The standard is informed by industry practice, legislation, regulation, and other codes of conduct, compliance with which is not a bar to civil court proceedings.

3. Does potential liability extend to the manufacturer only or could claims extend to corporate executives, employees, and representatives?

Potential civil liability extends to almost all participants in the chain of production, including manufacturers, distributors, retailers, wholesalers and importers. Participants may be held liable for claims in negligence or breach of contract as well as under Québec’s warranty provisions on product quality and the special regime concerning safety defects. Any persons who distribute products under their own name or as their own are bound to provide the warranties prescribed by legislation, custom, or trade practice.

4. How can a liability claim be brought?

• Class Actions

Class actions are permitted in every Canadian province except Prince Edward Island. Before proceeding to trial, class actions must be certified. In general, claims must raise common issues, the representative claimant must adequately represent the interests of the class and the class action must be the preferable procedure.

• Limitation or Prescription Periods

Most common law provinces require proceedings to commence within two years from the discovery of a product liability claim. In most cases, the discovery date is the date the product allegedly fails or causes harm, but this period can be extended if the claimant is not aware of, and could not reasonably have discovered, the identities of potential defendants at the time. In Québec, the prescription period is generally three years. For breach of the legal warranty of quality, the period begins from the time the buyer becomes aware of the defect.

5. What defenses are available?

Defendants can always assert that plaintiffs have not established the requisite elements of a claim. Additionally, plaintiffs can advance defenses that include, among others:

• Contributory negligence, such as such as the plaintiff failing to observe warnings of risk, and abnormally or improperly using, maintaining, or modifying the product;
• The plaintiff’s voluntary assumption of risk, by contractual waiver or by previous awareness of the risk;
• An unforeseeable intervening act (or superior force) that caused or contributed to the plaintiff’s injury; and,
• The insufficient state of scientific knowledge at the time of the product’s manufacture, distribution, or supply, due to which the potential for harm could not have been known.

Also from this Legal Handbook

An intro to the legal situation for traditional products and OTC medicines in Canada. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. What are the regulatory requirements for traditional, herbal, complementary, or alternative medicines and devices?

In Canada, traditional, herbal, complementary or alternative medicines are included under the previously defined term “NHPs.” NHPs are governed by the Food and Drugs Act and the Natural Health Products Regulations, which provide requirements concerning their manufacturing, packaging, labelling, storage, importation, distribution and sale. An NHP is defined as a “drug” within the meaning of the Act but is governed under a separate regulation than conventional drugs. NHPs are manufactured, sold, or represented to diagnose, treat, mitigate, or prevent diseases, disorders, abnormal physical states, or to restore, correct, or modify organic functions. They are comprised of substances listed under the Natural Health Product Regulations Schedule 1, and can never include a substance listed under Schedule 2.

To market an NHP in Canada, applicants must submit an authorization request to acquire a product licence issued from the Minister. The NHP must meet safety and efficacy requirements. Once authorized, NHPs are issued an eight digit numerical code called a “Natural Product Number” (“NPN”) and a product licence containing the terms of market authorization. The product licence specifies Health Canada’s authorizations for the NHP’s dosage form, recommended dose, recommended route of administration, recommended use or purpose, recommended duration of use, as well as the quantity, potency, and source material of any medicinal ingredients. The Product Licence also specifies its date of issue in addition to the licensee’s name and address. Requests to test NHPs in clinical trials must also be authorized and conducted according to accepted principles of good practice.

NHP applicants must apply for a Site Licence under the Natural Health Products Regulations to manufacture, import, label, or package NHPs for sale in Canada. Site Licence applications must contain the applicant’s name, address, and contact information, the address of the buildings in which activities are to be conducted, and a report demonstrating compliance with GMPs.

As of July 2018, Health Canada plans to update its approach to regulating “self-care” products, including NHPs, non-prescription drugs and cosmetics. Currently, three (3) different sets of rules apply to the regulation of self-care products, each with different requirements and oversight. Under the proposed new system Health Canada would bring all self-care products under a single set of rules and regulate them based on the foreseeable risk to consumers. Products of similar risk profiles would be treated in a similar manner to help ensure that the rules for bringing products to market are more consistent and easier to understand.

As a work-to-date, Health Canada has amended the Natural Health Products Regulations to improve the labelling for natural health products. The proposed changes include the modernization of contact information, an obligation to clearly and prominently display label text, an obligation for clear labelling of food allergens, gluten and aspartame and the introduction of a product facts table to ensure that key information is shown in a standardized format. As a next step, Health Canada is intending to propose for consultation amendments to the Food and Drug Regulations to introduce a risk-based approach to regulatory oversight for all self-care products.

2. Can these traditional, herbal, complementary, or alternative products be advertised directly to the public?

Yes, NHPs can be advertised directly to the public, subject to certain exceptions. First, an NHP cannot be advertised as a treatment or cure for any of the diseases, disorders or abnormal physical states referred to in Schedule A of the Food and Drugs Act (i.e. conditions for which self-care is not appropriate, including, for example, cancer, diabetes, hypertension, etc.). Second, NHPs must not be labelled, packaged, treated, processed, sold or advertised in a false, misleading, or deceptive manner, or in a manner likely to create an erroneous impression regarding the product’s character, value, quantity, composition, merit, or safety. A person cannot therefore advertise an NHP outside of the terms of its market authorization. To this end, an NHP should not be advertised if the terms of its market authorization have been withdrawn by Health Canada, or if the NHP has been voluntarily withdrawn or discontinued by the manufacturer.

As with all drug advertisements, NHP advertisements must present accurate, objective, and balanced information about the product’s health benefits and risks.

3. What health, advertising, and marketing claims may be made for traditional, herbal, complementary, or alternative products?

Health, advertising, and marketing claims concerning an NHP must remain consistent with and cannot exceed the scope of the terms of market authorization. The advertisement must clearly identify the advertised product or product line visually and/or in audio. It must present at least one indication for recommended use and one symptom addressed per medicinal ingredient. The product category (e.g. homoeopathic, traditional) must be accurately represented. Additionally, the advertisement must remain consistent with the NHP’s terms of market authorization in any descriptions of:

• Directions for product use, dosing, administration, and storage;
• The product’s therapeutic mechanism of action, performance, efficacy, and the ability to prevent or reduce risks;
• The product’s onset of effects, duration, and absence of side effects; and,
• Depictions of the NHP’s potency, by describing only the quantity of medicinal ingredient and the number of standardized components per dosage units.

4. What are the regulatory requirements for over-the-counter (non-prescription) medications?

In Canada, over-the-counter (“OTC”) non-prescription medications are regulated in the same manner as all drugs. For additional details on the regulatory requirements, see Question 3 of Regulatory, Pricing and Reimbursement Overview.

OTC drugs are identified as medicinal products with ingredients that do not appear on Health Canada’s “Prescription Drug List,” which sets out medicinal ingredients with prescription status.

5. Are there any limitations on locations or channels through which OTC products may be sold?

NAPRA Schedule III drugs are sold from the self-selection area of pharmacy which is operated under the direct supervision of a pharmacist, who must be available, accessible, and approachable to assist the patient in making an appropriate self-medication selection.

Unscheduled drugs are sold without professional supervision, and may be sold from any retail outlet, including internet platforms not belonging or referring to an accredited pharmacy. In the case of unscheduled drugs, adequate information must be available on the label for the patient to make a safe and effective choice.

However, since July 2020, the pharmaceutical industry may distribute non-prescription drugs and natural health products as samples to designated health professionals and, in some cases, directly to consumers for low-risk products with well established safety profiles.

6. What health, advertising, and marketing claims may be made for OTC products?

As with all drugs identified under the Food and Drugs Act, health, advertising, and marketing claims concerning OTC products must be consistent with the product’s terms of market authorization. The list of requirements and limitations on claims that can be made for OTC products is substantively identical to the list concerning NHPs in Question 3 above.

7. Can OTC products be marketed or advertised directly to the public?

Yes, OTC products can be advertised directly to the public, subject to the same exceptions applicable to advertising of NHP products. See Question 2 above for details.

8. What is the mechanism by which a prescription-only product can be converted to an OTC product?

A prescription-only product’s medicinal ingredient can be fully or partially converted to an OTC product by submitting a request to convert a medicinal ingredient from prescription to non-prescription to Health Canada. A full conversion changes the prescription status without any change to the conditions of use of the medicinal ingredient, and removes the medicinal ingredient completely from the Prescription Drug List. A partial conversion changes the product’s conditions of use (i.e. dosage, administration, indication, or target population) and results in both a prescription and non-prescription version of the drug product on the Canadian market. The request must contain evidence demonstrating that the medicinal ingredient no longer meets any of the Prescription Drug List requirements, and that the medicinal ingredient can be used safely and effectively in a self-care environment.

Consumer studies may be required for indications, directions of use, and/or warnings or contra-indications that have never been marketed for sale in a self-care environment in Canada or internationally, or are considered complex for the self-care environment and therefore present a possible risk of misuse.

9. What are the requirements for the importation of either traditional medicines or OTC products?

Commercial importers of NHPs or OTC products destined for retail, distribution, or other commercial activities must hold a Site or Establishment Licence, upon which the foreign manufacturing site must be listed. The products which are imported must be authorized for sale in Canada (i.e. they must possess either an NPN or DIN).

Personal use importations of NHPs or OTC products are permitted to individuals seeking to import a single course of treatment or a 90-day supply based on the directions for use of the product (whichever is less). The product must be for personal use, or for the use of a person for whom the importer is responsible and with whom they are travelling. The product must be shipped/carried in hospitals or pharmacies dispensed packaging, original retail packaging, or have the original label affixed to it which clearly indicates the health product and what it contains.

For use in a clinical trial, NHP importers require a Notice of Authorization issued by Health Canada. OTC drug importers, as with all drug importers, must include a “No Objection Letter” issued by Health Canada authorizing the use of the drug in a clinical trial (other than clinical trials in Phase IV, which are performed after the drug is approved and on the market). For NHP and OTC products, copies of the authorization or letter must be provided at the port of entry.

Also from this Legal Handbook

The ins and outs of the marketing, manufacturing, packaging & labeling, and advertising in Canadian pharma. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. What is the authorization process for the marketing of new drugs, biologics, medical devices, non-prescription medications, and other medicinal products?

The authorization process for the marketing of new drugs, biologics, medical devices, over-the-counter medications, and other medicinal products are mentioned in  Regulatory, Pricing and Reimbursement Overview , Question 3.

2. What is the authorization process for the marketing of generic versions of these products?

Manufacturers of generic products can submit an abbreviated authorization submission (the ANDS) to Health Canada to receive a NOC. An ANDS must include evidence of pharmaceutical and biological equivalence and have the same route of administration and conditions of use as those of the Canadian Reference Product. See Regulatory, Pricing and Reimbursement Overview , Question 6.

3. What are the typical fees for marketing approval?

See Regulatory, Pricing and Reimbursement Overview, Question 4.

4. What is the period of authorization and the renewal process?

See Regulatory, Pricing and Reimbursement Overview, Question 5.

5. What are the requirements, if any, for post-approval pharmacovigilance?

Drug manufacturers are required to report any serious adverse drug reactions that have occurred in Canada within a prescribed period of time as well as unexpected serious adverse reactions that occurred outside of Canada.

Manufacturers and importers of medical devices must submit information to Health Canada regarding any serious risk of safety-related harm within 72 hours of receiving or becoming aware of a report.

Similarly, Class I medical device manufacturers and importers are required to each report any incident that occurred within Canada involving a device that relates to a failure of the efficacy of the device in whole or in part, any inadequacies related to labelling, and any incidents which led to the death or deterioration of the health of a patient, user or other person (or could do so were it to recur). Manufacturers and importers are also required to report incidents which occurred outside of Canada.

6. Are foreign marketing authorizations recognized?

Foreign marketing authorizations are not recognized in Canada with respect to marketing authorization of drugs and biologics.

Foreign market authorizations of medical devices are recognized as long as the applicant is governed by a regulatory authority that is recognized by the Minister, and the application is accompanied by a certificate of compliance and a supporting summary report, issued by a conformity assessment body of the recognized country, which certifies that the medical device meets the applicable safety and efficacy requirements of the Medical Devices Regulations.

7. Are parallel imports of medicines or devices allowed?

The Food and Drugs Act and its regulations do not provide for parallel imports. Nonetheless, because the regulations require that both the inner and outer label of a drug display the imported product’s identification number (i.e. the DIN) assigned by Health Canada, parallel importation is not legally possible.

The parallel importation regime for trademarks in Canada follows the international exhaustion model.

8. What are the restrictions on marketing practices such as gifts, sponsorships, consultancy agreements, travel and entertainment, or other incentives for healthcare organizations and individual medical practitioners?

The acceptance of gifts, sponsorships, consultancy agreements, travel and entertainment, or other incentives for healthcare organizations and individual medical practitioners is governed in Canada by both domestic and foreign bribery and fraud laws, healthcare professionals’ codes of ethics, and industry standards such as the Innovative Medicines Canada Code of Ethical Practices.

Programs, services, and activities provided by industry must not be offered nor provided to health care professionals, medical practices, their agents or healthcare facilities as an incentive to gain access to a medical practice to hospital formulary listing. They cannot be offered as an obligation, as undue inducement to prescribe particular prescription medicines in exchange for recommending for use, or in a manner that could be construed as a gift.

Moreover, any payment made must not be intended to cover acts or tasks that are part of the health care professional’s standard of care or which are covered as part of the healthcare system’s reimbursement process.

9. How is the manufacturing of medicines and devices regulated and by which agencies?

The manufacturing of medicines and devices is regulated through the issuance of Establishment Licences (i.e., DELs) for drugs and biologics and medical devices by Health Canada. Establishments must comply with GMPs.

See Regulatory, Pricing and Reimbursement Overview, Question 3.

10. Are local manufacturing requirements compatible with Good Manufacturing Practices (GMPs) as defined by the U.S. Food & Drug Administration and/or the European Medicines Agency?

Yes, there is a requirement to comply with GMPs in the Food and Drugs Regulations.

11. What is the inspection regime for manufacturing facilities?

Part of the Health Canada Inspectorate program is to conduct inspections of establishments that are involved in activities covered by the Establishment Licencing framework. These inspections are conducted to verify the compliance with, among others, GMPs, good pharmacovigilance practices, and labelling standards.

See Regulatory, Pricing and Reimbursement Overview Question 8.

12. Are manufacturing facilities open for inspection by foreign inspectors or third-party inspectors as authorized by the FDA/EMA?

Yes. There is a cooperation agreement between Health Canada and the FDA that allows the respective regulatory agencies to inspect establishments in the other’s country. These inspections are conducted together with inspectors from both government agencies.

13. What are the requirements for storage, packaging, and handling of medicines and devices and their constituent components?

The quality management requirements for storage, packaging, and handling of medicines and devices and their constituent components in Canada are part of GMPs and thus are regulated through the Establishment Licencing framework.

14. What information must be included in medicine and device labeling?

In general and where applicable, medicine, medical device and natural health product labels must include:

• The distinctive brand name;
• The common or proper name;
• The name and address of the manufacturer/distributor/licensee;
• The expiration date;
• Adequate instructions for use of the product;
• The product identification number;
• The lot number;
• Any special storage conditions;
• The standard for the drug if necessary;
• The dose per unit of any medicinal ingredient;
• The net amount of the drug product (e.g., number of tablets);
• Any precautions or warnings; and,
• A quantitative list of all non-medicinal ingredients

All mandatory label information must be present in both French and English. However, bilingual labelling is not required for prescription drug products, drug products available in hospitals and clinics only, or drug products for professional use.

15. What additional information may be included in labeling and packaging?

Any information that is not false or misleading or is not otherwise expressly excluded (see Question 16 below) may be included in the labeling or packaging.

Information on the label can be additionally stated in any other language presuming it does obscure the information present in French or English.

16. What items may not be included in labeling and packaging?

The following items may not be included in the labelling and packaging of medicines and medical devices:

• References to the Food and Drugs Act or the Food and Drugs Regulations, except where required explicitly by the legislation;
• The phrases “Registered by Health Canada,” or “endorsed,” “promoted,” “acceptable,” or “recommended by Health Canada” or any acronym commonly associated with Health Canada;
• The Health Canada logo; or,
• Abbreviations for proper or common drug names;
• Health Claim

17. What are the restrictions and requirements for the marketing and advertising of medicines and devices?

In general, the Food and Drugs Act prohibits health product advertising which is false, misleading or deceptive, or which is likely to create an erroneous impression related to its character, value, quantity, composition, merit or safety. This prohibition also captures any off-label advertising. Promotion of a drug or device prior to market authorization is considered false and misleading because the terms of such authorization have not been established and proposed indications for use have not been verified.

The Food and Drugs Act also prohibits consumer directed ads for health products that make claims to treat, prevent, or cure any of the serious diseases listed in Schedule A of the Act (i.e. disease for which self-care is not appropriate, such as cancer, dysentery, or diabetes, etc.). Schedule A prevention claims are permitted by regulation for non-prescription drugs and natural health products.

The Food and Drugs Regulations prohibit direct to consumer advertising of prescription drug advertising beyond a drug’s name, price and quantity. As a result, two types of ads are permitted:

• Reminder Ads, in which the name of the drug is mentioned but no reference to the disease state appears in the ad; and,
• Help-Seeking Messages, in which a disease state is discussed, but no reference is made to a specific prescription drug product.

18. Where can medicines and devices be sold or delivered? Can medicines and devices be sold or delivered via post?

For most provinces, restrictions on the conditions of sale of drug products are based on recommendations made by the National Association of Pharmacy Regulatory Authorities (“NAPRA”). NAPRA recommends that each drug product be placed into one of four categories (i.e., Schedule I, Schedule II, Schedule III, or Unscheduled). The categories each reflect a different level of restriction, such as prescription, non-prescription, etc.

Schedule I drugs require a prescription for sale and are dispensed to the public by a pharmacist following the diagnosis and professional intervention of a medical practitioner. The sale is controlled in a regulated environment (i.e. a pharmacy) as defined by applicable provincial pharmacy legislation.

Schedule II drugs, while less strictly regulated, do require professional intervention from a pharmacist at the point of sale and possibly referral to a medical practitioner.  While a prescription is not required, Schedule II drugs are available only from a pharmacist and must be retained within an area of a pharmacy where there is no public access and no opportunity for patient self-selection.

Schedule III drugs are available without a prescription. These drugs are to be sold from the self‑selection area of a pharmacy, which is operated under the direct supervision of a pharmacist, subject to any local professional discretionary requirements which may increase the degree of control. Such an environment is accessible to a patient and clearly identified as a “professional services area” of the pharmacy. The pharmacist must be available, accessible, and approachable to assist the patient in making an appropriate self-medication selection.

Unscheduled drugs can be sold without professional supervision as adequate information is available for the patient to make a safe and effective choice and labeling is deemed sufficient to ensure the appropriate use of the drug. Unscheduled drugs may be sold from any retail outlet.

Provided that these rules are followed, medications can be sold and delivered by mail.

Devices which are not used or implanted by a physician or other healthcare professional other than prescrition lenses may be sold directly to consumers via retail locations or delivery.

19. What are the restrictions and requirements for electronic marketing and advertising via email, via the Internet, social media, and other channels?

The restrictions and requirements for electronic marketing and advertising via email, internet, social media, and other channels are the same as the restrictions placed on any other form of advertisement.

In addition, in order to send advertisements via e-mail in Canada, companies must comply with Canada’s anti-spam legislation, which applies to commercial electronic messages. In general, Canada’s anti-spam legislation prohibits, among other things, companies from sending commercial electronic messages without consent, including email, social media and text messages, altering the transmission data in an electronic message so the message is sent to a different destination without express consent, using false or misleading representations to promote products or services online.

20. May medicines and devices be advertised or sold directly to consumers?

Regarding advertising, see Preclinical and Clinical Trial Requirements, Question 2.

Regarding sale, see Preclinical and Clinical Trial Requirements, Question 3.

21. How is compliance monitored?

Health Canada is the national regulatory authority for health product advertisements and is responsible for administering and directing compliance with the Food and Drugs Act and its regulations.

Canadian Advertising Preclearance Agencies (“APAs”) provide advertising material review services to advertisers and advertising agencies. APAs use Health Canada’s guidance documents and their own codes of advertising to ensure that advertising material submitted to them, in all media, is in compliance with the law. APAs also review advertising for consistency with the health product’s terms of marketing authorization and verify that the advertising is accurate, balanced and evidence-based.

The first route for advertising complaints adjudication of all Health Canada authorized health products is through the APAs, except as specified below. APAs will process complaints pursuant to the provisions and time frames expressed in their internal complaint resolution procedures.

The following types of advertising complaints should be reported directly to Health Canada, bypassing the APAs:

• Complaints related to direct-to-consumer advertising of prescription drugs and Schedule D drugs (biologics, including vaccines);
• Complaints related to advertising of unauthorized health products.

22. What are the potential penalties for noncompliance?

For the potential penalties related to non-compliance with advertising complaints reviewed by Health Canada, see Regulatory, Pricing and Reimbursement Overview, Question 9.

If an APA finds that an ad is non-compliant, the penalties are restricted to non-monetary penalties that range from immediate withdrawal of offending advertising, to notices in annual reports or newsletters, to public letters of apology. When material has been disseminated that is substantially misleading, or where the information may cause inappropriate product use or constitutes an imminent and/or significant health hazard, remedial measures contained in letters of correction or published notices may be required.

Also from this Legal Handbook

Preclinical and clinical trial requirements for pharma in Canada – a comprehensive legal overview. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. Are clinical trials required to be conducted locally as a condition (stated or implicit) for marketing approval?

There is no requirement to conduct local trials of a new drug to receive marketing approval. Rather, in order to obtain marketing approval, a company must submit an NDS application containing information and data about the drug’s safety, effectiveness and quality to Health Canada. See Regulatory, Pricing and Reimbursement Overview , Question 3.

2. How are clinical trials funded?

Canadian clinical trials are funded through a variety of public and private institutions. The federal government of Canada funds research through the Canadian Institute of Health Research and the Natural Science and Engineering Research Council of Canada. Charitable organizations as well as the private sector also fund clinical research.

3. What are the requirements for pre-clinical and clinical trial protocols? Who must approve the protocols?

As a first step in drug development, pre-clinical studies are carried out to evaluate the safety of a drug and its potential use. These studies are carried out in vitro and in vivo to assess the performance of the drug, including assessment of the existence and extent of toxic effects. The pre-clinical studies provide important information on the potential use of the drug prior to testing on humans in clinical trials. If the pre-clinical studies are promising, the sponsor may apply to Health Canada for authorization to conduct a clinical trial involving human subjects in Canada.

Sponsors wishing to conduct a clinical trial must submit a Clinical Trial Application (“CTA”) to the Minister (other than clinical trials in Phase IV, which are performed after the drug is approved and on the market). The CTA must include copies of the clinical trial’s protocol and a statement of the risk and benefits to the health of participating trial subjects as set out in the informed consent form. CTAs must also contain an attestation signed by a senior medical or scientific officer in Canada and the senior executive officer containing information dealing with the drug, its destination, or the clinical trial.

Clinical trial sponsors may also submit an application to request a pre-CTA consultation meeting with Health Canada as an opportunity for the sponsor to present relevant data, discuss concerns, and receive guidance on the acceptability of the proposed trial.  In addition, the clinical trial’s proposed protocol and informed consent form must be reviewed and approved by a Research Ethics Board (“REB”).

Effective February 11, 2022, Canada reduced the retention period for clinical trial records for drugs and natural health products from 25 years to 15 years in an effort to harmonize the country’s clinical trial framework with its international partners.

4. What are the requirements for consent by participants in clinical trials?

Consent must be free and informed.  Those seeking consent must avoid undue influence through the exploitation of positions of authority and trust, as well as coercion such as threats of harm or punishment for failure to participate. Any incentives used must not be so excessive so as to promote the ignoring of risk.

Consent forms must include an outline of the risks and anticipated benefits to the individual’s health arising from participation in the clinical trial and all other aspects of the clinical trial that are necessary for that person to make an informed decision to participate in the clinical trial. Sponsor must disclose all risks, regardless of their occurence.

Participants must be able to withdraw their consent at any time.

5. May participants in clinical trials be compensated?

According to Health Canada, participants in clinical trials may be compensated for any inconvenience suffered (e.g.  missed work), and as a paid incentive to participate in the trial.  However, compensation may be deemed inappropriate if it is so large that it promotes reckless behaviours.

Provincial governments limit the types of financial compensation that may be offered to clinical trial participants. For instance, in Québec, it is not permitted to offer financial rewards other than the payment of an indemnity as compensation for the loss and inconvenience suffered as a result of research that could interfere with the bodily integrity of an individual. In contrast, in Alberta and Newfoundland and Labrador, researchers are allowed to provide financial incentives to research participants subject to the limitations of Health Canada outlined above. Such compensation must be justified in the REB submission.

6. How are participants in clinical trials protected and indemnified against any harm that arises as a result of participation in the trial?

Participants in clinical trials are protected and indemnified against any harm that arises as a result of participation in the clinical trial through terms contained within consent forms, which outline the means of compensation for injury resulting from the clinical trial.

Sponsors must be vigilant when offering compensation for injury in the context of the Canadian health care system, as public health plans in each province already  cover expenses for medically required services regardeless of cause. As such, a sponsor should not, and given the universal nature of healthcare in Canada, generally cannot, pay for the costs of medically required expenses and hospitalization caused by complications arising from participation in clinical trial. Sponsors will usually only offer compensation over and above the what is covered by the system, e.g. when special services are needed.

Clinical researchers who fail in their duty of care toward patients may also be held liable through the tort of negligence for medical malpractice and may also be held liable if a harm occurs in a context where they have failed to obtain informed consent from their participants.

Also from this Legal Handbook

A brief overview of the situation regarding regulation, pricing and reimbursement of drugs in Canada. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: Canada, available to purchase here for GBP 119.

1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?

Health Canada is the federal authority responsible for regulating pharmaceutical drugs, biologicals, and medical devices for human use. Health Canada’s Health Products and Food Branch (“HPFB”) is the body responsible for reviewing, assessing, regulating and monitoring health products in Canada.

2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?

• Authorization

The Food and Drugs Act forms the legislative framework for the marketing and manufacture of drugs, biologicals and medical devices in Canada. The Food and Drug Regulations, Natural Health Products Regulations and Medical Devices Regulations make up the general regulatory framework. The law and its regulations are supplemented by policies and guidelines published by Health Canada.

• Pricing

Created under the Patent Act, the Patented Medicine Prices Review Board (“PMPRB”) is a judicial body that acts in a regulatory capacity to ensure that patented medicine prices are not excessive. To be covered by the PMPRB’s jurisdiction, the manufacturer must be a patentee of the invention, the invention must pertain to a medicine, and the patentee must sell the medicine in Canada. Drugs manufactured by generic companies are not subject to the medicine price control provisions of the Patent Act, as they are marketed and sold once the patent is expired.

• Reimbursement

In Canada, reimbursements of drugs, biologicals and medical devices are governed under federal and provincial jurisdiction and also provided for by the private sector. Under the Health Act, all necessary drug therapy administered within a Canadian hospital setting is insured and publicly funded. Outside the hospital setting, provincial and territorial governments are responsible for the administration of their own publicly funded prescription benefit programs. Provincial drug benefit plans are not harmonized, and a miscellany of different private and public drug plans for reimbursement are available across Canada. To be reimbursed by one or more provincial drug insurance plans, manufacturers will have to ensure that their drugs appear on the provincial formulary list.

The Canadian Agency for Drugs and Technologies in Health (CADTH) reviews drug listing submission for all provinces except Québec and the Institut National d’Excellence en Santé et en Services Sociaux (INESSS) do so in Québec. CADTH and INESSS offer listing recommendations based on pharmacoeconomic criteria and optimal use of medications, but each province has its own drug plan decision-maker and administrator. As a result, the reimbursement of drugs may differ from province to province.

The pan-Canadian Pharmaceutical Alliance (“pCPA”), a coalition of public drug plan representatives negotiates the funding terms of drugs on behalf of the provincial, territorial and federal plans, including, where applicable, rebates and other conditions.[1]

Certain eligible groups are also covered under specific federal or provincial drug benefit programs. First Nations and Inuit, members of the military, veterans, members of the Royal Canadian Mounted Police, and inmates in federal penitentiaries are covered by federal programs. Seniors, recipients of social assistance and individuals with diseases or conditions that are associated with high drug costs are covered by provincial programs. Some provinces include income-based universal programs.

[1] The pan-Canadian Pharmaceutical Alliance, “Home page”, online: http://www.canadaspremiers.ca/pan-canadian-pharmaceutical-alliance/

3. What are the steps to obtain authorization to develop, test, and market a product?

• New Drugs

New drugs cannot be marketed unless they have been granted authorization. Applicants must submit a New Drug Submission (“NDS”) that demonstrates the new drug’s safety and efficacy. The NDS includes the results of the preclinical and clinical studies regarding the production of the drug, packaging and labelling details, and information regarding therapeutic claims and side effects. The drug’s name must be provided and approved to ensure that drug names are not similar and thus likely to be confused with one another. Applicants must then submit a Drug Identification Number (“DIN”) application. The applicant further submits specimens of the labelling to be used for the new drug as well as a statement indicating the proposed date on which those labels will first be used. Once authorized, the new drug is issued a Notice of Compliance (“NOC”) and a DIN.

Additionally, no Canadian pharmaceutical establishment may manufacture, fabricate, perform any tests on, package, label, distribute, import, or sell a drug without a Drug Establishment Licence (“DEL”). To acquire a DEL, applicants must provide information concerning their activities and each category of drug for which the licence is requested. The application must also include information about the building in which the activities will be performed, as well as evidence that these buildings, equipment and proposed practices and procedures meet applicable Good Manufacturing Practices (“GMP”) requirements.

• Medical Devices

Medical devices are categorized in one of four categories (Class I, II, III or IV) depending on their level of risk. Class II, III and IV medical devices require premarket approval to be commercialized in Canada. A manufacturer of a Class II, III or IV device must submit an application attesting to, among other things, the safety and efficacy of the device and must also submit labelling information.

Although certain exemptions may apply, the importer and the distributor of a device normally need a Medical Device Establishment Licence (“MDEL”) to perform their activities in connection with medical devices. For instance, while they do not need a product licence, Class I medical devices can only be imported, sold and distributed by companies that hold MDELs delivered by Health Canada.

Class I medical devices also remain subject to and must comply with any requests of the Minister of Health (the “Minister”) to submit safety and efficacy information.

• Natural Health Products

Under the Natural Health Products Regulations, applicants must submit applications demonstrating safety and efficacy of the Natural Health Product (“NHP”) to acquire a Product Licence and must also apply for a Site Licence instead of a DEL. For further information on NHPs, see Traditional Medicines and OTC Products.

• Exceptions: Emergencies and Orphan Drugs

As an exception, practitioners can obtain authorization for new drugs and medical devices intended for medical emergencies through the Special Access Program (“SAP”) even if a NOC has not yet been issued. Applications for orphan drugs are often processed under SAP. Applicants must provide information about the medical emergency, the names of all institutions that will use the drug, any possessed data regarding the drug’s use, safety and efficacy, and any other requested data. Practitioners must agree to inform the Minister and manufacturer of results as well as any adverse reactions. They must also agree to account, on the Minister’s request, for all drug quantities.  Once approved, a formal letter of authorization is issued, indicating the practitioner’s name, the medical emergency, and the quantity of the drug. The manufacturer may then sell the new drug to the practitioner on the terms and conditions stated in the letter of authorization, up to a maximum quantity equivalent to a six-month supply.

Since January 5, 2022, Health Canada has also restored access to certain restricted drugs under the SAP, including, e.g. psychedelics.[1] Exceptionally, a drug can also be imported into and sold in Canada for a period of one (1) year when there is an urgent public health need, e.g., in the context of a pandemic .[2]

[1] Canada Gazette, Part 2, Volume 156, Number 1: Regulations Amending Certain Regulations Relating to Restricted Drugs (Special Access Program)

[2] Questions and Answers – Access to Drugs in Exceptional Circumstances –  https://www.canada.ca/en/health-canada/services/drugs-health-products/access-drugs-exceptional-circumstances/questions-answers.html

4. What are the approximate fees for each authorization?

The Fees in Respect of Drugs and Medical Devices Regulations, established under the Financial Administration Act, set out authorization fees for most drugs and medical devices. Fees are payable by the person who files the submission or supplement or who makes the application.

As at April 2022, the current approximate fees for the examination of a drug submissions and its supplements vary depending on the submission’s content, ranging in Canadian dollars from $490,666 for submissions concerning new active substances, and for submissions concerning previously approved drugs or medicinal ingredients that contain only:

• Clinical or non-clinical, chemistry and manufacturing data: $253,015;
• Clinical or non-clinical data: $104,339;
• Comparative studies: $59,708;
• Chemistry and manufacturing data: $34,831;
• Published data: $20,064; and,
• Labelling material: $4,997.

The approximate fees payable for the examination of a DEL application or for its annual review vary depending on the area of activity and contain the following basic fees as of April 1, 2022:

• Drug fabrication – sterile dosage form: $43,171;
• Drug fabrication – non-sterile dosage form: $30,677;
• Packaging and labelling: $6,255;
• Importing: $31,688;
• Distribution: $15,691;
• Wholesale: $7,962;
• Testing: $4,129; and
• Building outside Canada (each): $949.

5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?

The approximate fees payable for the examination of an application for medical device licence varies by the class of licence and the type of device, and range from $522 for Class II, $10,679 for Class III, to $25,955 for Class IV medical device applications.

Market authorizations for drugs are valid indefinitely, subject to their compliance with the Food and Drugs Act and its regulations.

SAP authorizations are valid only for maximum quantities of up to a six-month supply. Renewals can be ordered through the usual methods under the SAP.

Manufacturers of medical devices that are licenced for sale in Canada are required to inform Health Canada each year before November 1 that the information submitted with their licence application and any subsequent amendments have not changed. This is referred to as the licence renewal process. Manufacturers of licenced Class II, III and IV medical devices are charged an annual fee, payable at the time of licence renewal, for the right to sell their devices in Canada. The annual fee for the right to sell a licensed Class II, III or IV medical device in Canada is $394 as of April 1, 2022.

Persons holding an establishment licence (drug and device) also undergo a yearly review process, and must submit to the Minister, the information required in their original application each year. The licence holder will receive prior notification and failure to submit the review request will render the licence invalid.

6. How does the authorization process differ between brand-name products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?

• Generic Products

Applicants for generic product authorization can submit an Abbreviated New Drug Submission (“ANDS”). The ANDS requires less information and is more expeditious than the NDS. However, generic products must still meet safety and efficacy requirements. Clinical trials for Phases I to III are not eliminated, but Phase I trials generally form the basis for the drug’s evaluation. The Minister issues a NOC only if the drug is deemed to be pharmaceutically and biologically equivalent to, and possesses the same administration route and conditions of route as, a Canadian Reference Product (i.e. a drug for which a NOC has been issued and which is marketed in Canada). Alternative reference products which have received a NOC but are no longer marketed in Canada may also be used if they demonstrate the same equivalencies as well as safety and efficacy requirements.

• Foreign Health Products

All health products commercially imported into Canada must meet all applicable requirements of the Food and Drugs Act and its regulations, including labelling, marketing authorization requirements, DEL requirements, authorizations to conduct a clinical trial and GMP requirements.

Commercial importers of human drug products destined for retail, distribution, or other commercial activities must hold a DEL, upon which the foreign manufacturing site must be listed.

Imported Class II, III and IV medical devices must be licensed in Canada.

Subject to specific exemptions, importers of any medical device require an MDEL in order to import, distribute and sell the medical device licence in Canada.

7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?

Health Canada defines health products that do not readily fall within the definitions of drug, device, or cosmetic as combination or “interface” products. Combination products include Device-Drug, Cosmetic-Drug and Food-NHP products. Such products are subject to the same regulatory requirements as one of their two respective non-combination products, depending on the combination product’s nature and classification. Classification depends on the combination product’s composition, characteristics, intended use, historical use, and public perception.

8. How is compliance with regulation monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Medicines Agency expectations and requirements?

The HPFB has a pharmacovigilance program. Its Marketed Health Products Directorate monitors and collects adverse reaction and medication incident data, reviews and analyzes marketed health product safety data, and conducts risk-benefit assessments of marketed health products. Manufacturers, importers, and clinical trial sponsors of health products must provide the Minister with information concerning any adverse reactions, including medication and medical device incidents. Consumers, patients, and health professionals can also report adverse reactions on a voluntary basis.

In addition, HPFB has implemented a national inspection program to assess compliance with the Food and Drugs Act and its regulations, including pharmacovigilance and GMPs. Drug, DEL, clinical trials, medical devices, and good pharmacovigilance practice are each subject to inspection. Any deviation or deficiency is noted by an inspector in the form of an observation and confirmed in writing to the inspected company in a notice. The observations are assigned a risk classification.

Health Canada maintains databases of authorized drugs, biologicals, medical devices, and natural health products. The Drug Product Database lists all authorized drugs for humans and animals, as well as disinfectants, radiopharmaceutical drugs, and biological drugs for humans. The SAP contains an internal database listing all drugs available under its programme. Inspection results are maintained and publically accessible online via the Drug and Health Product Inspection Database.

9. What is the potential range of penalties for noncompliance?

In the event of non-compliance with the provisions of the Food and Drugs Act or its regulations, Health Canada can suspend the authorization to sell or import a drug or device recall products, and impose labelling and packaging modifications. Health Canada can also refuse an imported drug’s or device’s entry into Canada, require regulatory stop sales, and issue injunctions prohibiting or ordering specific activities. In addition, Health Canada can criminally prosecute violators where non-compliance creates a health risk, is continuing in nature, was premeditated, indifferent, reckless, of a marked departure from a reasonable standard of care, or if other enforcement activities have proven unsuccessful.

Violators of the Food and Drugs Act or its regulations are guilty of an offence and liable on conviction by indictment to a fine of up to $5,000,000 per day of violation or up to 2 years imprisonment. They are also liable on summary conviction to a fine of up to $250,000 per day or up to 6 months imprisonment for first offenses, and up to $500,000 per day or 18 months imprisonment or both for subsequent offenses. In the case of a violation involving false or misleading statements to Health Canada or a person knowingly or recklessly causing a serious risk of injury to human health, the court may impose a monetary penalty of an unlimited amount at the discretion of the court. A violation of the Act or its regulations is a strict liability offence with the possibility of a due diligence defense.

Marketers, manufacturers, or distributors may be held liable depending on the degree of control and the extent of authority granted. Corporations may be held liable if an individual constituting a “directing mind” committed an offense. Corporate officers, directors, agents and mandatories who direct, authorize, assent to, participate in or otherwise acquiesce in the commission of the offence are individually held liable and are subject to the same punishment upon the conviction of the company, even though the person is not prosecuted for the offence.

10. Is there a national healthcare system? If so, how is it administered and funded?

Yes. Canada has a national healthcare system designed to ensure that all residents have reasonable access to medically necessary hospital and physician services without paying out-of-pocket. Roles and responsibilities for health care services are shared between provincial and territorial governments and the federal Government.

The provincial and territorial governments are responsible for the management, organization and delivery of health care services for their residents.

The federal Government is responsible for setting and administering national standards for the health care system, providing funding support for provincial and territorial health care services, and supporting the delivery for health care services to specific groups.

The federal Government is also working on the implementation of a national pharmacare. It is expected that the national pharmacare will be a drug insurance plan where Canadians can have access to prescription medicines without paying out-of-pocket.

11. How does the government (or public) healthcare system function with private sector healthcare?

In general, there are laws prohibiting or heavily restricting private sector healthcare for any physician or hospital healthcare services that are considered insured under the public plans. Private payments are common for other expenditures, including, for example, drugs, dental services, optometry, cosmetic surgery and home care.

12. Are prices of drugs and devices regulated and, if so, how?

The prices of innovative drugs are regulated by the PMPRB (see above Question 2b).

In addition, the provinces regulate the price of drugs in a variety of ways. For example, before a drug is listed on a provincial formulary and therefore reimbursed by the province, it must receive a positive recommendation as to its pharmacoeconomic value. Once it has been determined that the price submitted (“List Price”)

is reasonable in relation to its therapeutic value, provinces may negotiate a listing agreement with the manufacturer  who often provides for substantial discounts on the List Price.

To further increase their bargaining power with drug manufacturers, the provinces have come together to form the pan-Canadian Pharmaceutical Alliance (the “pCPA”). All 13 Canadian provinces and territories are members of the pCPA.

Through the pCPA, provinces conduct collective negotiations to obtain even greater discounts on the price of medicines, given the high volume that they represent.

13. How are drugs and devices used by patients paid for? What roles do public and private payers play?

See Question 2c above.

Persons not covered by the public plan typically have private insurance through group insurance contracts or employee benefit plans.

14. Who dispenses drugs and devices to patients and how are those dispensers compensated?

Dispensing drugs is an act reserved for pharmacists, subject to some limited exception for other healthcare professionals. Pharmacist fees are included in the total cost of a medication and are reimbursed by the public or private drug plans. Pharmacists must abide by the provincial rules governing the preparation and sale of medication. There are strict rules concerning ownership, control, and supervision of a pharmacy, as well as operations, retail prices, and the terms and conditions of sale of a medication, among others. Each province also has a code of ethics of pharmacists which outlines the ethical obligations pharmacists have to the profession and the public.

15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?

Pharmacists are integral to patient care. They ensure the proper use of medications by identifying and preventing pharmacotherapeutic problems and in preparing, storing and delivering medications in order to maintain and restore health.

Also from this Legal Handbook

Biosimilar uptake initiatives are gaining traction across Canada and have already been implemented in several provinces. Dara Jospé and Lina Bensaidane of Fasken examine the impact of these policies on patients, prescribers, and pharmacists thus far, and the implications should non-medical biosimilar switching become a nationwide norm.

In the last few years, several provinces in Canada have decided to introduce a biosimilar policy, through which only the biosimilar version of a given biologic drug is reimbursed by the public insurer.

A biosimilar is a biologic drug that is very similar to a biologic drug that has been authorized for sale by Health Canada.[1] A biosimilar medicine can enter the market once the patent of the reference biological medicine has expired. Health Canada authorizes the sale of biosimilar drugs under the same regulatory standards of quality, efficacy and safety as biologic drugs. According to the latter, there would be no significant clinical difference in terms of efficacy and safety between a biosimilar medicine and the reference biological medicine whose sale is already authorized.

Still, biosimilar drugs are not treated in the same manner as generic drugs in Canada, i.e., an authorization by Health Canada does not constitute a declaration of equivalence to the reference biologic. Rather, the authority to declare two (2) products interchangeable and thus substitutable at the pharmacy level rests with each province and territory according to its own rules and regulations.^[2]

In this context, the provinces have not declared biosimilar drugs interchangeable but have limited reimbursement of biologics once there is a biosimilar on the market. In fact, one approach, termed the “non-medical switch,” which requires that patients be transitioned to the biosimilar once available, is gaining traction across Canada.

Here we take a closer look at the non-medical biosimilar switch policies implemented across Canada and the general trends that can be noted. The policies vary from one province to another in terms of exemptions and their impact on healthcare professionals.

Switching to a Biosimilar

In May 2019, the government of British Columbia was the first government to introduce a biosimilar initiative in which the provincial public drug plan would only cover the biosimilar versions of specific drugs for affected indications for both new and existing patients.^[3] As of 2021, at least 85 percent of BC PharmaCare patients for which a biosimilar drug was available were switched to this biosimilar drug.[4]

Since then, Alberta[5] (December 2019), New-Brunswick[6] (April 2021), Quebec[7] (July 2021), Nova-Scotia[8] (February 2022) and the Northwest Territories[9] (December 2021) announced similar non-medical switch initiatives.

Each of these provinces has allowed for a transition period, (e.g., six months) from the date of the announcement to the implementation of the biosimilar switch. Once the transition period ends, the provincial insurer only covers the biosimilar version of the drug, unless patients are eligible for a discretionary exemption for medical reasons.

While all provinces provide for exemptions regarding the transition to biosimilars, the criteria for the exemptions vary. Some provinces will have specific criteria laid out, whereas others will require the submission of a request form in which the prescriber justifies the necessity to maintain the biologic drug. For example, in Quebec, the people falling in the following categories are all exempt from the switch to biosimilars:

• Pregnant women, who should be transitioned to biosimilars in the 12 months after childbirth;
• Pediatric patients, who should be transitioned to biosimilars in the 12 months after their 18^th birthdays;
• Patients who have experienced two or more therapeutic failures while being treated with a biologic drug for the same chronic disease.[10]

In Alberta, on the other hand, prescribers must submit a Special Authorization request form for exceptional coverage of the originator biologic to the Alberta Blue Cross, the entity responsible for public medical coverage, which will be evaluated on a case-by-case basis.[11]

To implement the non-medical switch policies, the governments remove the biologic drugs from the provincial formularies when the biosimilar versions are listed. An important consequence of doing so is that no part of the cost of the biologic will be covered by the public insurance plan. This is in contrast to the case of standard generic drugs where the provinces will reimburse patients “up to the price of the generic”; so, in that context, if a patient wants to remain on the brand, the patient can simply pay the difference.

In the case of biologic products, patients have no choice but to switch to the biosimilar version, or they will need to cover the full cost of their medications.

Implementing a non-medical switch policy (or removing biologic drugs from the provincial formulary) has no necessary impact on the private insurance regime. While in some provinces there are minimal requirements imposed on private insurers, e.g. maximum financial participation, including limits on premiums and co-pays, and a requirement to cover, at minimum, all the drugs which are included on the formulary, private insurers are permitted to provide additional coverage or benefits to their beneficiaries.

Impact on Prescribers

Before the transition deadline, prescribers are advised to meet with their patients that are on a biologic for which a biosimilar exists and issue a prescription for the biosimilar (unless an exceptional case applies). Most provinces invite prescribers to identify eligible patients by requesting a list of their patients who are using a biologic for which a biosimilar exists from the Ministry of Health.[12]

Some provinces even offer prescribers a patient support fee in recognition of the efforts involved in contacting patients and supporting their switch to a biosimilar. For example, British Columbia offers providers a biosimilar patient support fee in recognition of the effort involved in contacting patients and supporting their switch to a biosimilar.[13]

In certain provinces, namely Nova Scotia, prescribers who switch their patient to a biosimilar version of a biologic drug are required to contact patient support programs to enroll their patient in the new support program.[14]  In fact, prescribers must ensure that the biosimilar prescription includes the name of the patient support program that the patient is enrolled in.

Impact on Pharmacists

The responsibilities afforded to pharmacists in the switch policies vary from province to province. While some provinces provide only for a supporting role for pharmacists, others have extended pharmacists’ scope of practice to allow them to carry out the substitution to a biosimilar drug themselves.

For example, in British Columbia, if a pharmacist notices that a patient is using an originator drug that is subject to a transition, the pharmacist is encouraged to inform the patient that they should consult their prescriber before the switch period ends to maintain coverage.[15] As is the case for prescribers, pharmacists in BC may claim a biosimilar patient support fee of $15 for identifying and providing information to assist with their patient’s switch to a biosimilar drug.[16]

On the other hand, provinces like Quebec have authorized pharmacists to substitute reference biological drugs for the biosimilar version themselves directly. The Guide de substitution de l’Ordre des pharmaciens du Quebec (Order of Pharmacists’ Substitution Guide) was amended in August 2021 to expressly allow pharmacists to carry out a substitution towards a biosimilar drug.[17] The pharmacist must nonetheless ensure that no indication to the contrary has been formulated by the author of the prescription, as well as notify the patient of the substitution.

Provinces in which pharmacists already had prescribing authority can initiate the transition towards biosimilars for their patients themselves. This is the case in Alberta, where pharmacists with additional prescribing authority can independently initiate prescriptions for Schedule 1 drugs.[18] They can therefore follow the process outlined for health professionals to switch patients to biosimilars.[19]

Provinces that have not yet Opted for the Transition

As of the date of publication of this article, Ontario, Manitoba, Saskatchewan, Prince Edward Island, Newfoundland and Labrador, Yukon and Nunavut have not yet announced a transition to a formal biosimilar policy that requires eligible patients to make the switch. Nevertheless, some provinces have introduced a tiered reimbursement policy that requires new patients and patients that were deemed unresponsive to biologic therapy to first try a biosimilar drug, whereas others have decided to maintain the same listing status and reimbursement criteria for biologic and biosimilar drugs.

In Ontario, for example, patients who are treatment naïve to certain biologics are reimbursed only for the biosimilar version.[20] This is also the case in Saskatchewan, where patients that are new to drugs such as adalimumab and etanercept, only receive public coverage for its biosimilars.[21]

Conclusion

While not all Canadian provinces have introduced a biosimilar initiative, such policy is gaining traction across Canada and has already been implemented in several provinces. The impact of these policies on healthcare professionals, patients and the overall population in the next few years will dictate whether biosimilar switch policies will become the norm across the country.

References

[1] See Health Canada’s “Biosimilar biologic drugs in Canada : Fact Sheet”, available here.

[2] Health Canada, Guidance Document: Information and Submission Requirements for Biosimilar Biologic Drugs, at s. 2.1.3. .

[3] See BC Government’s Biosimilars Initiative for Patients.

[4] See BC Government’s Biosimilars Initiative for Health Professionals.

[5] See Alberta Government’s Biosimilar Policy.

[6] See New Brunswick’s Biosimilars Intitiative.

[7] See Quebec’s policy on Biosimilar drugs.

[8] See Nova Scotia’s Biosimilar Initiative.

[9] See Northwest Territories’ Biosimilar Initiative.

[10] See Quebec’s policy on Biosimilar drugs.

[11] See Alberta’s Biosimilar Initiative : Guide for health professionals.

[12] See, for example, New Brunswick’s Biosimilars Initiative – Information for Prescribers and Health Professionals and Alberta’s Biosimilars Initiative Support : Patient List Request.

[13] See BC Government’s Biosimilars Initiative for Health Professionals, “Patient support fee for prescribers”. BC has also published several guides for specialists, e.g. Biosimilars Initiative: Prescriber Guide, Gastroenterologists & Internal Medicine Specialists; Biosimilars Initiative: Prescriber Guide, Dermatologists.

[14] See Nova Soctia’s Information for Prescribers about the Nova Scotia Biosimilar Initiative.

[15] See, for example, BC Government’s Biosimilars Initiative for Health Professionals, “Procedures for pharmacists.”

[16] See BC Government’s Biosimilars Initiative for Health Professionals, “Patient support fee for pharmacists.” See also BC’s Biosimilars Initiative: Pharmacy Guide.

[17] Ordre des pharmaciens du Québec, La substitution d’un médicament : guide d’exercice.

[18] See Alberta College of Pharmacy’s page on Additional Prescribing Authority.

[19] See Alberta Biosimilar Initiative’s Guide for health professionals.

[20] See Exceptional Access Program Reimbursement Criteria for Frequently Requested Drugs, p. 4.

[21] See Government of Saskatchewan’s Formulary Bulletin: Update to the 62^nd Edition of the Saskatchewan Formulary.

Also from this Legal Handbook

Fasken Canada’s Dara Jospe and Denis Douville examine Canada’s COVID-19 vaccine strategy, from the steps the country has taken to expedite the approval process to its funding of R&D projects and the preparations needed for ensuring the necessary supply and distribution infrastructure is in place.

Vaccination is a historically successful strategy to prevent the spread of infectious diseases. The immunization of a large enough proportion of a population will reduce the percentage of vulnerable hosts to a level below an infectious disease’s transmission threshold, thus preventing its spread.[1] That is why vaccination is considered “one of the most promising counter-pandemic measures to COVID-19” and “essential in the future for reducing morbidity and mortality.”[2]

In this context, the Government of Canada is expediting regulatory approvals, funding research and development, and preparing for the supply and distribution of an eventual vaccine against COVID-19.

Canada’s efforts are part of a broader international and worldwide effort to develop a vaccine to immunize against and prevent the spread of COVID-19.[3] The scope and speed of these global efforts have progressed at what has been called “an unprecedented pace.”[4]

Details about the Government of Canada’s efforts follow.

1. Expediting Regulatory Approvals

The Canadian government has implemented temporary measures that are meant to accelerate the regulatory pathways for clinical trials and eventual approval, of a COVID-19 vaccine.

Generally speaking, Health Canada’s regulatory process requires manufacturers to put their vaccines through pre-clinical and clinical trials.[5] Following a successful clinical trial, Health Canada will review the safety and efficacy data to provide a product market authorization.[6]

In response to the COVID-19 pandemic, Health Canada intends to review COVID-19 vaccines as quickly as possible.[7] Health Canada introduced new regulatory measures to expedite the regulatory review of COVID-19 health products such as vaccines.

In particular, on May 23, 2020, the Minister of Health signed an interim order for clinical trials for medical devices and drugs related to COVID-19.[8] The order targets pharmaceutical and biologic drugs, which includes vaccinations. A stated objective of this order is to facilitate and make efficient clinical trials in Canada intended to address COVID-19.[9] In this regard, the interim order:

• provides a new path to obtain Health Canada authorization, which could otherwise not be provided under the general Food and Drugs Act and its corresponding Food and Drug Regulations;
• expands the definition of qualified clinical trial investigators to include, for example, pharmacists, rather than only physicians;
• permits clinical trials to be partially suspended or revoked, meaning that other non-suspended or revoked treatment groups can continue the trial in question; and,
• allows for relaxed consent requirements. For example, written consent can be provided from a distance, and non-written consent can be provided in certain circumstances..[10]

Additionally, on September 16, 2020, the Minister of Health signed the Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19.[11] This interim order facilitates expedited authorizations for the importation, sale and advertising of drugs used in relation to COVID-19, including vaccines. To that end, the interim order provides the Minister of Health with new tools to:

• authorize drugs that are not yet licensed in Canada or elsewhere, by using a modified set of requirements;
• authorize drugs based on certain elements being approved by trusted foreign regulatory authorities; and,
• expand the use of currently authorized drugs to include a COVID-19 indication based on known evidence with, or without an application from the market authorization holder.[12]

The overall objective of the interim orders is to make the approval, sale, and importation of COVID-19 related drugs simpler and more expeditious, including for an eventual COVID-19 vaccine. The list of authorized clinical trials for COVID-19 vaccines, among other drugs, is listed on the Health Canada website.[13]

As of December 1, 2020, no vaccine to prevent COVID-19 has received Government of Canada approval.

2. Funding Research and Development

The Government of Canada has invested in scientific and medical research to accelerate the research and development of a COVID-19 vaccine.

Specifically, the Government of Canada has undertaken a “Plan to Mobilize Science to fight COVID-19,” which includes funding for the development of potential vaccines.[14] The plan includes funding to the:

• COVID-19 Response Fund, used to used to advance projects that are already underway by university researchers and others to respond to COVID-19, and intended to ensure a domestic supply of potential vaccines;[15]
• Strategic Innovation Fund, which assists companies and other private sector entities for large-scale projects, meant to assist with the development of a vaccine;[16]
• National Research Council of Canada to upgrade its Human Health Therapeutics facility in Montréal with the objective to develop, test and scale-up promising vaccine candidates to be ready for industrial production;[17] and,
• National Research Council of Canada for its Industrial Research Assistance program, which provides advisory services and research and development funding to Canadian companies that are developing COVID-19 vaccines.[18]

Overall, the funding is intended to assist companies in advancing research, progress vaccine candidacy in different stages of clinical trials, and generally assist the Canadian industry in the development of a COVID-19 vaccine.

Canada’s approach compares to other countries who have made similar investments to “fast-track” research and development of a vaccine.[19]

3. Preparing for Supply and Distribution

Currently, Canada has little to no capacity for mass production of a COVID-19 vaccine.[20]

However, the Canadian government has negotiated and signed agreements with pharmaceutical companies to provide for the supply and distribution of a potential vaccine in Canada, once it is approved.[21] Through these agreements, Canada has, as of December 1, 2020, reserved the equivalent of approximately 414 million doses of vaccines in development from several pharmaceutical companies.[22]

The federal government is also participating in and has committed approximately $220 million to the COVID-19 Vaccine Global Access Facility. This facility is an international procurement mechanism to deliver access to COVID-19 vaccines by investing in vaccine production capacity across multiple vaccine candidates. It is managed in partnership with the World Health Organization, among other organizations and partners.[23]

For distribution, the federal government is coordinating its various departments to purchase and distribute COVID-19 treatments and related supplies domestically, notably Public Services and Procurement Canada, the Public Health Agency of Canada, Health Canada, and Innovation, Science and Economic Development Canada.[24] The Canadian Armed Forces will also assist and intend to play an active role in the distribution of COVID-19 vaccines.[25] In particular, the military has committed teams to work with the Public Health Agency of Canada in order to plan for a vaccine’s eventual distribution.[26]

The intent of Canada’s supply and distribution efforts is to increase availability of a COVID-19 vaccine for Canadians once it is developed. These efforts appear to be in line with the notion that a vaccine’s effectiveness depends on its availability to a sufficient number of people representing a large enough fraction of the population.[27]

Towards Canadian Vaccination

The Canadian government’s efforts towards expedited regulatory approvals, funding for research and development, and supply and distribution are each designed to bring Canada closer to vaccination against COVID-19. The Government of Canada has stated that its objective is to offer vaccination for free and to all willing Canadians.[28] The exact date of vaccination will depend in part on these efforts. Based on current trends, Canada is predicted to approve its first vaccination by the end of 2020,[29] and begin vaccination in 2021.[30]

References

[1] Lea Skak Filtenborg Frederiksen et al., “The Long Road Toward COVID-19 Herd Immunity: Vaccine Platform Technologies and Mass Immunization Strategies,” Front Immunol. 2020; 11: 1817, online: <https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7385234/>.

[2] Frederiksen et al., supra note 1.

[3] World Health Organization, “172 countries and multiple candidate vaccines engaged in COVID-19 vaccine Global Access Facility,” August 24, 2020, online: <https://www.who.int/news/item/24-08-2020-172-countries-and-multiple-candidate-vaccines-engaged-in-covid-19-vaccine-global-access-facility>.

[4] Health Canada, “Preliminary guidance on key populations for early COVID-19 immunization,” November 3, 2020, online: <https://www.canada.ca/en/public-health/services/immunization/national-advisory-committee-on-immunization-naci/guidance-key-populations-early-covid-19-immunization.html>; World Health Organization, “Draft landscape of COVID-19 candidate vaccines,” November 12, 2020, online: <https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines>.

[5] Prime Minister’s Office, “Prime Minister announces funding to advance the development of Canadian COVID‑19 vaccine technologies,” October 23, 2020, online: <https://pm.gc.ca/en/news/news-releases/2020/10/23/prime-minister-announces-funding-advance-development-canadian-covid>.

[6] Public Services and Procurement Canada, “Government of Canada signs new agreements to secure additional vaccine candidate and treatment for COVID-19,” September 22, 2020, online: <https://www.canada.ca/en/public-services-procurement/news/2020/09/government-of-canada-signs-new-agreements-to-secure-additional-vaccine-candidate-and-treatment-for-covid-19.html>; Health Canada, “Drugs and vaccines for COVID-19,” November 26, 2020, online: <https://www.canada.ca/en/health-canada/services/drugs-health-products/covid19-industry/drugs-vaccines-treatments/about.html>.

[7] Government of Canada, “What you need to know about the COVID-19 vaccine for Canada,” November 25, 2020, online: <https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection/awareness-resources/know-vaccine.html>.

[8] Government of Canada, “Interim Order respecting clinical trials for medical devices and drugs relating to COVID-19,” May 23, 2020, online: <https://www.canada.ca/en/health-canada/services/drugs-health-products/covid19-industry/interim-order-respecting-clinical-trials-medical-devices-drugs.html>.

[9] Government of Canada, “Drugs and vaccines for COVID-19,” supra note 6.

[10] More information on the interim order can be found in Health Canada’s guidance documents: “Applications for COVID-19 drug and medical device clinical trials under the Interim Order: Notice release of guidance documents,” May 27, 2020, online: <https://www.canada.ca/en/health-canada/services/drugs-health-products/covid19-industry/interim-order-respecting-clinical-trials-medical-devices-drugs/notice-guidance.html>; Health Canada, “Applications for drug clinical trials under the Interim Order: Guidance document,” May 27, 2020, online: <https://www.canada.ca/en/health-canada/services/drugs-health-products/covid19-industry/interim-order-respecting-clinical-trials-medical-devices-drugs/drug-guidance.html>.

[11] Health Canada, “Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19,” September 16, 2020, online: <https://www.canada.ca/en/health-canada/services/drugs-health-products/covid19-industry/drugs-vaccines-treatments/interim-order-import-sale-advertising-drugs.html>.

[12] For more information see: Health Canada, “Information and application requirements for drugs authorized under the Interim Order: Guidance document,” October 16, 2020, online: <https://www.canada.ca/en/health-canada/services/drugs-health-products/covid19-industry/drugs-vaccines-treatments/interim-order-import-sale-advertising-drugs/guidance.html>.

[13] Health Canada, “Drugs and vaccines for COVID-19: List of authorized clinical trials,” November 18, 2020, online: <https://www.canada.ca/en/health-canada/services/drugs-health-products/covid19-industry/drugs-vaccines-treatments/list-authorized-trials.html>.

[14] Prime Minister’s Office, “Canada’s plan to mobilize science to fight COVID-19,” March 23, 2020, online: <https://pm.gc.ca/en/news/news-releases/2020/03/23/canadas-plan-mobilize-science-fight-covid-19>.

[15] Ibid.

[16] Ibid.; Prime Minister’s Office, “Prime Minister announces funding to advance the development of Canadian COVID‑19 vaccine technologies,” supra note 5.

[17] Prime Minister’s Office, “Canada’s plan to mobilize science to fight COVID-19,” supra note 14.

[18] National Research Council Canada, “Funding domestic vaccine candidates as part of the Government of Canada’s COVID‑19 response,” October 23, 2020, online: <https://nrc.canada.ca/en/stories/funding-domestic-vaccine-candidates-part-government-canadas-covid-19-response>.

[19] Frederiksen et al., supra note 1.

[20] Henri Ouellette-Vézina and Mélanie Marquis, La Presse, “Comment la distribution du vaccin au Canada se fera-t-elle?,” November 25, 2020, online: <https://www.lapresse.ca/covid-19/2020-11-25/comment-la-distribution-du-vaccin-au-canada-se-fera-t-elle.php>.

[21]Public Services and Procurement Canada, “Government of Canada signs new agreements to secure additional vaccine candidate and treatment for COVID-19,” supra note 6; Prime Minister’s Office, “Prime Minister announces funding to advance the development of Canadian COVID‑19 vaccine technologies,” supra note 5.

[22] Henri Ouellette-Vézina and Mélanie Marquis, La Presse, “Comment la distribution du vaccin au Canada se fera-t-elle?,” November 25, 2020, online: <https://www.lapresse.ca/covid-19/2020-11-25/comment-la-distribution-du-vaccin-au-canada-se-fera-t-elle.php>.

[23] Prime Minister’s Office, “New agreements to secure additional vaccine candidates for COVID-19,” September 25, 2020, online: <https://pm.gc.ca/en/news/news-releases/2020/09/25/new-agreements-secure-additional-vaccine-candidates-covid-19>.

[24] Public Services and Procurement Canada, “Government of Canada signs new agreement for a COVID-19 antibody therapy,” November 24, 2020, online: <https://www.canada.ca/en/public-services-procurement/news/2020/11/government-of-canada-signs-new-agreement-for-a-covid-19-antibody-therapy0.html>.

[25] Rachel Aiello, CTV News, “Canadian military prepares to help with COVID-19 vaccine distribution,” November 16, 2020, online: <https://www.ctvnews.ca/health/coronavirus/canadian-military-prepares-to-help-with-covid-19-vaccine-distribution-1.5191182>.

[26] Rachel Aiello, CTV News, November 27, 2020, “Top general to lead vaccine rollout, aims to immunize majority by September: PM,” online: <https://www.ctvnews.ca/health/coronavirus/former-nato-commander-to-lead-canada-s-vaccine-distribution-rollout-1.5207122>.

[27] Frederiksen et al., supra note 1.

[28] Government of Canada, “What you need to know about the COVID-19 vaccine for Canada,” supra note 7.

[29] Amanda Connolly, Global News, November 26, 2020, “Canada could approve 1st coronavirus vaccine by end of 2020,” online: <https://globalnews.ca/news/7485916/coronavirus-vaccine-rollout-canada-priority-groups/>.

[30] Lina Dib, La Presse Canadienne, November 29, 220, “COVID-19: les Canadiens seront vaccinés, mais pas les premiers, prévient Trudeau,” online: <https://www.ledroit.com/actualites/covid-19/covid-19-les-canadiens-seront-vaccines-mais-pas-les-premiers-previent-trudeau-video-44c2dec15a28c3f793ebcaf6ac0bdf5c>.

Also from this Legal Handbook

Also from this Legal Handbook

In the light of several recent regulatory updates to Canada’s cannabis laws, lawyer Jean-Raphaël Champagne examines the potential for cannabis to be legalised for use in cosmetic products in Canada.

One thing that Bill C-51 did not change was the relationship between cannabis substances and cosmetic products in Canada

Cannabis legislation in Canada has come with its fair share of legislative amendments. Bill C-51 not only enacted the Cannabis Act; it also introduced a number of amendments and transitional provisions relating to the Criminal Code and the Controlled Drugs and Substances Act, among others. One thing that Bill C-51 did not change, however, was the relationship between cannabis substances and cosmetic products in Canada.

Strictly speaking, it remains prohibited to use cannabis in cosmetic products at this time. One might therefore wonder: Are there any legal alternatives to add value to a cosmetic product using cannabis or cannabis derivatives? And, more importantly, is there any future prospect for using cannabis in cosmetic products in Canada?

***

In Canada, the new Cannabis Act (S.C. 2018, c. 16) defines “cannabis” very broadly, i.e. as any part of a cannabis plant, which includes all its components (e.g. phytocannabinoids) and derivatives (e.g. an oil extracted from cannabis). Any substance that is identical to any phytocannabinoid is also considered “cannabis”. Examples include synthetic CBD or THC. Furthermore, while non-viable seeds, mature stalks, fibres and roots are explicitly excluded from the definition, a derivative made from those parts and containing phytocannabinoids would meet the definition of “cannabis”.

Importantly, the List of Ingredients that are Prohibited for Use in Cosmetic Products (commonly known as the Cosmetic Ingredient Hotlist) published by Health Canada currently prohibits the use of “cannabis”, as defined in the Cannabis Act, in any cosmetic product in Canada. Related compounds that are also specifically prohibited include Tetrahydrocannabinol; delta-9-tetrahydrocannabinol; Cannabidiol; Cannabinol; Cannabis Sativa Flower Extract; and Cannabis Sativa Flower/Leaf/Stem Extract.

This effectively means that cannabis, including cannabis oils or concentrates, cannot be used as an ingredient in cosmetic products.

However, cosmetic manufacturers and entrepreneurs will be glad to hear that there is also a subclass of cannabis called “industrial hemp”. In Canada, the Industrial Hemp Regulations define “industrial hemp” as a cannabis plant – or any part of that plant – in which the concentration of THC is 0.3% w/w or less in the flowering heads and leaves.

Because industrial hemp contains virtually no THC (arguably the most psychoactive molecule in cannabis), it is subject to a less stringent regulatory framework. In fact, derivatives from industrial hemp can be exempted from the entire cannabis regulatory framework when they meet certain prescribed conditions.

In particular, derivatives that are made from Cannabis Sativa plant species that are exempted from the application of the Cannabis Act under the Industrial Hemp Regulations can be included in cosmetic products. In order to meet the exemption, the ingredient derived from “industrial hemp” must not contain an isolated or concentrated phytocannabinoid or a synthetic duplicate of that phytocannabinoid, and the THC concentration of the resulting product must be 10 μg/g THC or less.

This is why the ingredient Cannabis Sativa (Hemp) Seed Oil may be incorporated in and displayed on the list of ingredients of a cosmetic product marketed in Canada.

Save for this exception, cosmetics containing “cannabis” are still prohibited, regardless of the legalization that occurred on October 17, 2018. Still, one might wonder if, in light of the recent legalization and, presumably, growing demand by Canadian consumers, the Government may be inclined to reassess the current prohibition and eventually allow the use of cannabis in cosmetics.

The opinion of this author is that this might happen in the future, but it will still take a few steps and Canada is nowhere near accepting the use of the real stuff in its cosmetic products.

By way of illustration, the Government of Canada recently proposed to amend the Cannabis Act to add three new classes of cannabis that could be legally sold by federal licence holders and provincially and territorially authorized distributors and retailers. Those three new classes are “edible cannabis”, “cannabis extracts”, and “cannabis topicals”. Cannabis topicals are currently defined as products that include cannabis as an ingredient and which are intended to be used on external body surfaces (i.e., skin, hair, and nails).

It is important to note that a number of prohibitions on advertising have been proposed in relation with the new classes of cannabis, including with respect to health benefit claims, nutrient content claims and cosmetic benefit claims. As a result, we anticipate that a cannabis topical product may in fact not be represented or advertised as a cosmetic (e.g. moisturizes, heals dry skin, smooths wrinkles, cleans, protects, relieves, etc.). This may sound counterintuitive, because for many of us, topical application refers to creams, oils and balms, which are typically found in the cosmetic section at the local pharmacy outlet. However, the way the regulators picture topical cannabis for the purpose of their proposed amendment is just another delivery mechanism for active cannabis substances.

At this time, there is no clear prospect for using “cannabis” in cosmetics in Canada

In other words, cannabis topicals are really intended as another class of recreational cannabis, in addition to fresh and dried cannabis, cannabis oil, cannabis plants and cannabis seeds; i.e. they are not cosmetic products per se and will not be represented as such.

That said, once they are permitted, cannabis topicals could lead to new business opportunities for those who already have expertise and knowhow in relation to the development and commercialization of products applied topically. Unfortunately, though, at this time, there is no clear prospect for using “cannabis” in cosmetics in Canada. Therefore, a person wanting to increase the value of its cosmetic brand, product or formula by adding cannabis as an ingredient may be better off focusing on hempseed oil and its intrinsic characteristics instead of waiting for cannabis to be fully authorized for use in cosmetic products.