The Fraser Institute

The Fraser Institute

April 25, 2005 07:00 ET

Government delays in approving new medicines are harming Canadians says new study

VANCOUVER, April 25 - 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.

Established in 1974, The Fraser Institute is an independent public policy
organization with offices in Vancouver, Calgary, and Toronto. For further

The media release and study (in PDF) are posted at

Contact Information

  • John R. Graham
    Adjunct Scholar
    The Fraser Institute
    Tel: (604) 733-5646

    Suzanne Walters
    Director of Communications
    The Fraser Institute
    Tel: (604) 714-4582