The hidden costs of over-regulating access to new drugs

Conservative MP Terence Young recently accused Health Canada of putting lives at risk by approving too many new drugs too quickly. Young contends that instead of focusing on the safety of new medicines, Health Canada is helping pharmaceutical companies’ market their drugs. But the facts tell a different story and clearly show that on this issue, Mr. Young is wrong.

New drugs are approved much faster in Europe and in the United States, and patient safety for Europeans and Americans is just as good as it is for Canadians. This means that the lengthier approval times in Canada do not produce better safety outcomes – they are just a waste of time and resources. In the meantime, thousands of Canadian patients lose potential health benefits by not having access to the most innovative treatments sooner. If anything, Health Canada’s slower approvals are potentially harming those patients who must wait unnecessarily to obtain the drugs that could help them. Relative to international standards, Canadians are not getting access to new drugs quick enough.

According to the Fraser Institute’s 2010 annual report, Access Delayed, Access Denied: Waiting for New Medicines in Canada, Health Canada took on average 388 days to approve new drugs in 2008. This is a significant improvement from the delay recorded in 2004, when Health Canada took an average of 839 days to approve new drugs. Although Health Canada should be recognized for this improvement, Canadians are still waiting too long for access to the newest prescription drugs compared to consumers in other countries.

For instance, in 2006, 2007, and 2008, Health Canada took longer (on average) than the European Medicines Agency [EMEA], its European equivalent, to grant market approval for new drugs. Likewise, Health Canada’s delay for approving new drugs was worse than that of the American Food and Drug Administration [FDA] in four of the past five years observed (2004 to 2008). Yet Health Canada’s patient safety record is no better than the EMEA or the FDA over this period.

Can increasing Canada’s regulatory burden further improve safety? Even if it could, the additional safety must be weighed against the lost potential health benefits for patients who wait for access to new drugs, not to mention the additional money spent on the regulatory process. In economic terms, any incremental improvement to drug safety from more rigorous or frequent testing is subject to diminishing returns. In other words, the additional amount of reassurance of drug safety gets smaller as more tests are conducted or more regulatory hurdles are erected. At some point, both the direct and indirect costs of additional regulatory oversight outweigh the benefits that can be gained from it.

There is no reason that Canadians should wait longer for the same new drugs that are available to patients in Europe and in the United States – especially since international scientific standards are the same across jurisdictions. Health Canada is unnecessarily duplicating the new drug approval process of the FDA and the EMEA.

Canada could ensure faster, safe access to medicines by taking advantage of the regulatory knowledge and capacity of other jurisdictions, rather than attempting to duplicate the process. One solution is to enter into agreements of mutual recognition with other countries; so that new medications already approved in those countries could be introduced into the Canadian market far more rapidly, and vice versa. Similarly, if a drug is removed from a particular market for safety reasons, then mutual recognition could also be used to protect patient safety here.

Canada is currently an observing member of the International Conference on Harmonization (ICH), which represents pharmaceutical industry associations and regulatory agencies in the United States, Japan, and Europe with the goal of streamlining procedures for drug development and marketing approval. Although the ICH reduces duplication and costs, a drug must still be approved by the regulatory agency of each member and observer country. In other words, a drug approved by the EMEA (in the European Union) must still be submitted for approval to the FDA if a drug manufacturer would like the drug sold in the United States. While Canada has implemented a number of the ICH guidelines, it still lags behind its international counterparts on harmonization efforts. Further, because the objective of the ICH is to establish international standards on the drug development side, it does not provide international harmonization of drug approvals between regulators. Streamlining drug approvals between jurisdictions through mutual recognition is needed to allow patients in all countries to have access to the same drugs.

Health Canada has an important role for ensuring that unsafe products are not sold in the Canadian market, but it also has a responsibility to Canadians to approve innovative new drugs without excessive delay. Canada has an opportunity to improve access to drugs and reduce unwarranted approval delays by working with other jurisdictions and recognizing the decisions made by their drug regulators, without jeopardizing safety. Harmonizing approval decisions through mutual recognition is one solution.