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Government Delays In Approving New Medicines Are Harming Canadians Says New Study

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Release Date: April 25, 2005
The Canadian government takes too long to lift its automatic ban on new medicines and evidence shows that the policy of automatically banning new medicines harms Canadians far more than it helps them, according to A Lethal Guardian: The Canadian Government's Ban on Prescription Drugs, released today by The Fraser Institute.

"This automatic ban is harmful to Canadians' health and is implicated in the deaths of hundreds of Canadians annually, while many more Canadians suffer needlessly because the government prevents them from getting the medicines they require," said John R. Graham, author of the new study and an adjunct scholar at The Fraser Institute.

When any new drug is invented and ready for distribution in Canada, the Canadian government responds by enforcing an automatic ban on its use. This ban is removed for patients who need the drug immediately only under extraordinary circumstances. The general ban is only lifted after the manufacturer has paid a user fee and waited for Health Canada to undertake a lengthy review to certify the safety and efficacy of the medicine.

The time it takes Health Canada to lift its ban on new drugs is very long and is, in fact, increasing as time goes on. Between 1997 and 2002, the median time to remove the ban grew from just over 16 months to two years: a 50 percent increase in just five years.

Although other developed countries have similar regulatory burdens, they take much less time to lift their bans on new medicines. In 2001, the Canadian government took eight months longer, at the median, than the United States to lift its prohibitions. During the three years from 1999 through 2001, Sweden lifted its bans seven months faster than Canada did, while the United Kingdom acted almost six months faster and Australia acted three months faster.

"Recent changes to address this failure, including the User Fees Act that was designed to increase departmental accountability, will not improve the situation because Canadians are still forbidden from choosing medicines that the government does not permit," Graham pointed out.

In fact, Health Canada has been charging user fees for about a decade and its performance has, nevertheless, declined over that time. It is unlikely that increased domestic user fees or taxes will free Canadians from their government's dangerous delays in approving new medicines.

Although Health Canada has more regulatory employees examining each new drug application than the United Kingdom, Sweden, or Australia, it nevertheless takes much longer to grant approvals than those countries. Because Health Canada has a monopoly on earning user fees for certifying the safety and effectiveness of drugs used by Canadians, unlike regulators in the European Union, it faces little incentive to provide timely approvals in a cost effective manner without external pressure.

Graham advises that Parliament amend the Food and Drug Act to allow Canadians to use new medicines once a regulator in a comparable jurisdiction, such as the United States, the European Union, or Australia, has removed its prohibition. Health Canada would retain the right to compel manufacturers to label their medicines with the warning that Health Canada had not approved the safety or efficacy of the medicine.
"If Health Canada nevertheless wants to review the drug's safety or efficacy, it will be able do so, using general government revenue. If the manufacturer wants Health Canada to review the medicine, with a view to removing its warning label, it would pay a user fee to have Health Canada review it," said Graham.

The amended Act would require the Health Minister to make annual reports to Parliament containing information about the new drugs allowed in Canada due to this reciprocity, the number of new prescriptions written as a result of patients exercising their freedom, the application and removal of warning labels by Health Canada, as well as reported negative and positive consequences to Canadian patients' health associated with the faster use of new drugs.

After a period of five years, Parliament would review how Canadians have responded to the faster availability of new medicines due to these amendments, and could introduce further regulatory reform based on that information.

"By giving Canadians the choice whether to adhere to Health Canada's recommendations or not, the government will be able to responsibly reduce the regulatory burden that prevents Canadians from getting new medicines," concluded Graham.