Drug shortages in Canada have reached a level where regulators can no longer rely on the old playbook. If you manufacture, import, or distribute pharmaceuticals in this country, you’re about to face a different regulatory reality. Health Canada published proposed amendments to the Food and Drug Regulations in December 2024, and these changes will reshape how manufacturers approach supply chain planning, compliance documentation, and inventory management.
This isn’t a minor update. It’s a fundamental shift in how Canada expects pharma companies to prevent shortages before they happen.
Why Is Health Canada Changing the Rules Now?
The short answer: the current system isn’t working well enough. Since 2017, somewhere between 10% and 15% of drugs marketed in Canada have been in shortage at any given time. More than half of all marketed drugs have experienced at least one shortage. In May 2024 alone, 937 drugs were in shortage, with 23 classified as critical national shortages.
The pandemic exposed just how fragile pharmaceutical supply chains really are. But the problems didn’t go away when COVID restrictions lifted. Extreme weather events, geopolitical tensions, API concentration in a handful of countries, and just-in-time delivery practices all continue to strain the system. Canada saw shortages of pediatric antibiotics, analgesics, and infant formulas that weren’t even on anyone’s radar before 2022.
Health Canada’s response builds on earlier regulations from 2016 and 2021 but goes significantly further. The proposed framework focuses on preventing shortages rather than just reacting when they occur.
The Critical and Vulnerable Drug List: Who Needs to Pay Attention?
Health Canada has developed a draft Critical and Vulnerable Drug List (CVDL) containing approximately 160 active ingredients and product groups. These are drugs where a shortage could present a serious risk of injury to human health.
If your product is on this list, you’ll face new requirements that go well beyond current reporting obligations. The list includes anti-infectives, critical care medications, certain cancer treatments, hormones, and vaccines. Health Canada built this list using a rigorous clinical importance scoring system, international comparisons with similar lists from the US FDA, France, and Australia, and input from clinical experts.
Being on the CVDL doesn’t mean your drug is currently in shortage or expected to be. It means Health Canada has determined that a shortage of your product could cause serious harm, and you’ll need to demonstrate you’re prepared to prevent that from happening.
New Requirement: Shortage Prevention and Mitigation Plans
Every market authorization holder (MAH) with a drug on the CVDL will need to develop and maintain a Shortage Prevention and Mitigation Plan (SPMP). This isn’t optional paperwork. These plans must include:
A detailed description of how you’ll identify and assess shortage risks for your product. A comprehensive analysis of the specific risks you’ve identified. Clear measures you’ll take to prevent shortages and mitigate their impact if they occur. A method for evaluating whether your prevention measures actually work. A communication strategy for notifying Health Canada if there’s a significant increase in shortage likelihood.
You’ll need to review and update these plans every three years, or sooner if there’s a meaningful change in your risk profile. Health Canada can request your plan within 24 hours, so this can’t be a document that sits forgotten in a folder somewhere.
The regulations don’t prescribe a specific format, which gives manufacturers flexibility. Internationally recognized shortage prevention frameworks will be acceptable as long as they cover all the required elements. If you’re a global manufacturer already maintaining similar plans for European or US operations, you may be able to adapt those with a Canada-specific appendix.
Safety Stock Requirements: The Three-Month Rule
A subset of drugs on the CVDL will face additional requirements through the Safety Stock List. These are medications where a shortage could present a serious and imminent risk of injury to human health. Health Canada estimates up to 70 drugs (representing roughly 425 drug identification numbers) could end up on this list.
If your product lands on the Safety Stock List, you’ll be required to maintain a minimum quantity of stock inside Canada equivalent to three months of average monthly demand from the previous calendar year. This isn’t buffer stock sitting at a warehouse somewhere else. It needs to be physically located in Canada.
The Minister can specify a different quantity in certain situations. Some drugs have physical characteristics (like short shelf life) that make three months impractical. Unusual demand patterns might justify adjustments. But the default expectation is clear: three months of safety stock, maintained year-round.
You’ll also need to keep detailed records showing where the stock is held, how quantities were calculated, and whether you’re holding it directly or through a third party. These records must be retained for at least three years.
If you draw on safety stock to address a shortage, you’re required to replenish it as soon as feasible once demand normalizes.
Demand Surge Reporting: New Obligations for Importers and Wholesalers
Market authorization holders aren’t the only ones facing new requirements. Importers and wholesalers of drugs on the Critical and Vulnerable Drug List must now report demand surges to Health Canada.
A reportable surge occurs when your monthly sales volume increases by at least 250% compared to the same month in the previous calendar year. If that threshold is hit, you have five days after the end of the month to notify Health Canada.
The report must include contact information, the drug identification number, brand and common names, therapeutic classification (using ATC codes), strength, dosage form, route of administration, package quantity, the date the increase began, and the reason if known.
Unlike standard shortage reports that get published publicly, demand surge reports will remain confidential to protect business information. The purpose is to give Health Canada an early warning signal so they can potentially intervene before an actual shortage develops.
This requirement doesn’t apply if the demand increase is tied to a shortage that’s already been reported through normal channels.
Extended Discontinuation Reporting: From Six Months to Twelve
Under current rules, manufacturers must report planned discontinuations at least six months in advance. The new regulations extend this to twelve months.
If you decide to discontinue a product with less than twelve months’ notice, you’ll need to report within five days of making that decision. When information in your discontinuation report changes, you now have five days to update it (extended from the current two days).
The longer timeline gives hospitals, clinicians, patients, and other supply chain participants more time to find alternatives and make transition plans. For manufacturers, it means discontinuation decisions need to factor into planning cycles earlier than before.
Expanded Scope: Over-the-Counter Drugs Now Included
One significant change is the potential expansion of shortage regulations to cover certain over-the-counter products. Previously, mandatory shortage reporting applied mainly to prescription drugs, controlled substances, biologics, and drugs administered under practitioner supervision.
The new framework allows the Minister to add any drug or class of drugs to an Expanded Scope List if there are reasonable grounds to believe a shortage could present a risk of injury to human health. Health Canada has estimated approximately 75 OTC products could initially fall under these expanded requirements.
This change responds directly to the 2022-23 shortages of pediatric analgesics and other non-prescription medications that caught the healthcare system off guard. Going forward, Health Canada wants the regulatory tools to address these situations before they spiral.
Exceptional Importation and Expiry Date Extensions
The proposed amendments also expand Health Canada’s toolkit for responding to shortages when they do occur.
The exceptional importation and sale framework will apply to a broader range of products, including domestically manufactured drugs authorized in foreign jurisdictions. The framework can now also be used to address discontinuations, not just supply disruptions, for up to 36 months while patients transition to alternatives.
Additionally, Health Canada will be able to extend expiration dates for specific lots or batches of drugs if there’s sufficient data showing the product remains stable and a shortage exists that could cause harm. This tool was used informally during the pandemic but will now have explicit regulatory backing.
Implementation Timeline
These regulations won’t take effect all at once. The proposed phased approach gives manufacturers time to prepare:
Six months after final publication: Expanded scope provisions, expiration date extensions, and exceptional importation updates come into force.
Twelve months after final publication: Requirements for shortage prevention and mitigation plans and demand surge reporting take effect.
Eighteen months after final publication: Safety stock requirements come into force.
The consultation period for these proposed amendments closed in March 2025. Based on the feedback Health Canada received, the final regulations may include some modifications, but the core framework is expected to remain intact.
What This Means for Your Operations
If you manufacture, import, or distribute pharmaceuticals in Canada, you need to be asking some hard questions right now.
Are any of your products likely to appear on the Critical and Vulnerable Drug List? Start preparing shortage prevention and mitigation plans now rather than waiting for the final list.
Do you have visibility into your supply chain deep enough to identify and assess shortage risks? Many manufacturers don’t have clear sight lines into their upstream suppliers, which makes risk assessment difficult.
Can you realistically maintain three months of safety stock in Canada for high-risk products? This has significant cost and logistics implications that need to factor into business planning.
Are your reporting systems ready to track demand surges at the 250% threshold? If you’re an importer or wholesaler, you may need to upgrade your monitoring capabilities.
How will extended discontinuation timelines affect your product lifecycle decisions? Twelve months is a long lead time that changes the calculus around market exits.
How Technology Can Help
Managing these new requirements manually is technically possible but increasingly impractical. The interconnected nature of the obligations, including supply chain risk assessment, vendor monitoring, demand tracking, compliance documentation, and regulatory change monitoring, calls for integrated systems that can handle complexity.
Platforms like Medoptix are designed specifically for this challenge. By combining demand forecasting, vendor analysis, and regulatory compliance monitoring in a single tool, pharmaceutical companies can get ahead of shortage risks rather than constantly reacting. When regulations change, which they will continue to do, having a system that flags relevant impacts and prompts the right operational responses makes the difference between staying compliant and scrambling.
The Canadian pharmaceutical market represents significant spending, with roughly CA$46 billion allocated to pharmaceuticals annually as part of CA$334 billion in total health spending. Manufacturers who invest in robust compliance and supply chain systems now will be better positioned as these regulations take full effect.
The Bigger Picture
Health Canada’s proposed regulations reflect a global trend. France now requires two to four months of safety stock for designated essential medicines. Australia mandates four to six months for certain brands. The US has requirements for redundancy risk management plans for specific drugs.
Canada isn’t operating in isolation, and these regulations bring the country more in line with what other major pharmaceutical markets already expect. For multinational manufacturers, this actually creates opportunities for standardization and efficiency gains by aligning Canadian operations with existing global programs.
For smaller manufacturers and importers, the compliance burden is real but manageable with proper planning. The regulations include some flexibility, like allowing internationally recognized plan formats and providing extended timelines for implementation. The key is starting now rather than waiting.
Drug shortages cause real harm to real patients. The average shortage lasts 98 days, during which patients may receive suboptimal treatments, ration medications, or go without. Health Canada’s new framework asks manufacturers to take more responsibility for preventing these situations. It’s a significant shift, but one that ultimately serves both public health and the long-term interests of a stable pharmaceutical market.
