Published: January 10, 2022
The Competition Bureau (the Bureau) and Health Canada’s Health Products and Food Branch (HPFB) recognize the benefits of collaborating to support Canadians’ access to safe and effective pharmaceuticals and biologics. Building on a history of collaboration, the Bureau and HPFB will continue to work together to address increasingly complex issues of mutual importance.
The Bureau and HPFB
Both the Bureau and HPFB have distinct, but complementary, mandates and roles to play in the pharmaceutical sector.
The Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace. The Bureau administers and enforces the Competition Act, which includes oversight of competition issues within the pharmaceutical sector.
Health Canada is part of the Government of Canada’s Health Portfolio and is responsible for helping Canadians maintain and improve their health, while respecting individual choices and circumstances. Health Canada’s HPFB is the national authority that regulates, evaluates and monitors the safety, efficacy, and quality of therapeutic and diagnostic products available to Canadians under the Food and Drugs Act (FDA) and its associated regulations.
Background on the Pharmaceutical Sector
In 2019, drugs made up 15.3% of total health care spending in CanadaFootnote 1. On average, annual drug spending was approximately $1,078 per person. Within the pharmaceutical industry, manufacturers of branded pharmaceuticals or biologics (Brands) provide Canadians access to new and innovative drugs while generics and biosimilars subsequently provide benefits that come from broad access to lower priced drugs.
Brands incur significant costs in researching and bringing to market branded drugs, including costs to comply with regulatory requirements. Among other things, seeking authorization of a new drug under the FDA and its associated regulations requires extensive clinical trials to prove that the new drug is safe and effective. Brands typically receive a period of time-limited market exclusivity – a period where they can introduce a branded drug and be insulated from competition. In addition, competition among Brands to develop new products is often a critical driver of innovation and for the introduction of new and improved therapies for Canadians.
Following the end of such exclusivity, generic small-molecule drugs and biosimilars can emerge. Generic drugs and biosimilars are typically less expensive than the original branded drugs to which they are compared because they partially rely on clinical testing previously conducted by the manufacturer of the branded drug (referred to as the reference product) to prove that the drug is safe and effective (among other reasons). This results in significant cost savings to the generic drug or biosimilar manufacturer. In order to rely on this clinical data, the manufacturer must demonstrate the equivalence of a generic drug, or a high degree of similarity in the case of a biosimilar, to the reference product by using comparative studies. Generic drugs and biosimilars may provide additional treatment options and help prevent drug shortages. Their use also has the potential to result in significant savings to the health care system and patients.
Areas for Collaboration
Both the Bureau and HPFB have important roles to play with respect to these drugs, and ensuring that Canadians have access to needed, safe and effective medicines. To support both organizations in achieving their mandates, HPFB and the Bureau are building on their history of collaboration and are committed to collaborating further in the following areas:
- General information sharing
- Exchanging information on the mandate, role, and framework of each organization to identify areas of mutual benefit.
- Sharing information on developments in these areas and on topics of mutual interest.
- Cooperation on Bureau enforcement actions
- Upon request, HPFB provides information to the Bureau in the context of specific investigations.
- HPFB refers issues to the Bureau where the Competition Act may apply.
- The Bureau shares findings related to the impact of regulatory frameworks on competition in the context of access to medicines
- The Bureau identifies issues where aspects of the regulatory framework for pharmaceuticals may be impacting elements of competition, including innovation and choice, and collaborates on identifying potential changes to address these issues.
- More generally, the Bureau provides any support or advice on designing laws, regulations, and policies in a way that balances policy objectives, including access to safe and effective therapies, with competition considerations (for example, advocating for greater competition based on the principles in the Competition Bureau’s competition assessment toolkit).
- HPFB provides relevant feedback to the Bureau on competition-related issues that impact access to medicines for Canadians.
While engaging in these activities, HPFB and the Bureau ensure that the confidentiality obligations of each organization are respected.
Access to Samples of Reference Products
Issues surrounding access to samples of reference products are an example of ongoing collaboration between the Bureau and HPFB, and the application of the principles above.
In some cases, generic companies have made claims of facing difficulties and delays in obtaining samples of the branded drug required to develop and support the regulatory authorization of their generic medicine. This has the potential to delay or hinder the comparative testing and market launch of generic drugs, with corresponding impacts on drug availability.
Both HPFB and the Bureau have issued notices to provide clarification and guidance to the industry regarding access to samples of reference products. To ensure industry awareness of expectations, HPFB released a Clarifying Notice in June 2019 (updated in August 2020) to clarify to drug manufacturers and sponsors that elements of Risk Management Plans (RMPs) required by HPFB, such as controlled distribution programs, are not intended to restrict access to Canadian Reference Products for generic drug manufacturers for the purposes of conducting comparative testing. HPFB is committed to making sure that RMPs continue to contribute to patient safety. The Notice also reminds sponsors that RMP elements should not be seen as a reason to delay or stop comparative testing with generic products, or to prevent them from entering the market.
The Bureau has issued statements regarding its investigations into the alleged practices of Brands restricting access to samples of reference products in December 2018 and April 2020, and has a high degree of concern about recurrence of this type of conduct. The Bureau continues to monitor the industry for any conduct that prevents or delays the supply of samples of reference products to generic manufacturers. Even if samples are eventually supplied, the Bureau will take the necessary steps to investigate and address conduct as appropriate, including seeking administrative monetary penalties, where the evidence establishes that the Competition Act is engaged. Given the guidance provided from the Bureau and HPFB, branded drug manufacturers should anticipate that the Bureau will treat any explanation for a failure to supply generic or biosimilar manufacturers in a timely manner with an extremely high degree of skepticism. Should generic or biosimilar manufacturers face similar issues in the future, they are encouraged to bring any concerns to the Bureau's attention at an early stage.
Both HPFB and the Bureau look forward to further cooperation on this topic, and broader cooperation across the pharmaceutical sector to support access to medicines for Canadians.
Bureau of Policy, Science and International Programs
Therapeutic Products Directorate
Holland Cross Tower B A/L 3102C5
1600 Scott Street
Ottawa ON K1A 0K9
You can learn more about the Bureau's recent activities in the pharmaceutical sector by consulting the links below:
- Interested parties encouraged to share views with task force examining effects of pharmaceutical mergers (May 11, 2021
- Competition Bureau joins multilateral working group on analysis of pharmaceutical mergers (March 16, 2021)
- Competition Bureau warns pharmaceutical industry that any further obstruction to the manufacture of generic alternatives will not be tolerated (April 2, 2020)
- Competition Bureau completes investigation into alleged abuse of dominance by Janssen Inc. (February 20, 2019)
- Competition Bureau completes abuse of dominance investigation into practices of Celgene, Pfizer and Sanofi (December 20, 2018)
- Generic Drug Sector Study (October 2007)
- Benefiting from Generic Drug Competition in Canada: The Way Forward (November 2008)