Interested in Drug Regulatory Affairs Training? 3 Facts About the New Canadian Drug Agency

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Recently, the Canadian government announced in its 2019 Federal Budget that it would create a Canadian Drug Agency (CDA). The CDA will be designed to help lower the cost of prescription drugs in Canada, and it could be the first step towards a national pharmacare plan.

While the budget only includes a few details of what the CDA would do, it could have a big impact on how drug prices are regulated in Canada. Here’s a quick look at the CDA and what the future holds for this proposed agency.

1. The CDA Is a First Step Towards Creating a National Pharmacare Plan

Canada is unique among countries that have universal healthcare in that it doesn’t also cover prescription drugs. Most other universal healthcare systems include a national pharmacare plan whereby the cost of drugs is subsidized by the government. In New Zealand, for example, people pay a flat rate of NZ$5 ($4.63 Canadian) for each fully subsidized prescription and a family only has to pay for their first 20 prescriptions per year.

Currently, prescription drugs in Canada are covered by a patchwork of public spending, private insurance, and out-of-pocket expenses. Coverage also varies considerably depending on the province and each individual’s particular circumstances. As a result, Canadians pay an average 20 per cent more for brand-name prescription drugs than people in other advanced economies do. The CDA would be a first step towards bringing a national pharmacare plan to Canada.

Unlike in many countries, pharmaceuticals in Canada are not covered by the federal government

Unlike in many countries, pharmaceuticals in Canada are not covered by the federal government

2. Creating a National Formulary Will Be the CDA’s First Responsibility

The basis for many national pharmacare plans is a national formulary. A national formulary is a list of medications that are deemed essential and are thus subsidized by the government. The CDA’s first task will be to create such a formulary. The CDA would be responsible for negotiating prescription drug prices on behalf of Canadians for drugs on the formulary, which the federal government claims could lead to $3 billion in savings per year. How that $3 billion in savings would be achieved hasn’t been detailed, but some in the pharmaceutical industry have suggested it could come through a more streamlined regulatory process, which would obviously be of interest to anyone studying drug regulatory affairs courses.

A national formulary would be a step towards creating a national pharmacare plan

A national formulary would be a step towards creating a national pharmacare plan

3. Students in Drug Regulatory Affairs Training Should Keep an Eye Out for Future Developments

The CDA is so far just an idea, but Health Canada has been tasked with setting up a transition office to create the CDA by the 2022-23 fiscal year. However, we might get a clearer idea of how the CDA will work much earlier than that. In August, the Advisory Council on the Implementation of National Pharmacare, which was created in the 2018 Federal Budget, will submit its final report on prescription drug coverage.

That report is expected to have significant influence over how the government and the CDA decide to pursue national pharmacare. Indeed, the advisory council’s interim report in March recommended the creation of a national drug agency and national formulary, both of which were then included in the 2019 Budget. Since that report could lead to changes in how prescription drugs are regulated, students in drug regulatory affairs training can keep a close eye on the report and its implications for the pharmaceutical industry.

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