The Big Idea: Stockpile Canada’s Drugs

The pandemic—and one very bad winter—have exposed long-standing gaps in Canada’s pharma supply. We can’t get caught off-guard again
Shoo Lee

Shoo Lee is professor emeritus at the University of Toronto and former pediatrician-in-chief at Mount Sinai Hospital in Toronto. He was named to the Order of Canada in 2019.

Last summer, my colleagues and I published a paper in the Canadian Medical Association Journal, insisting that pharmaceutical security needed to become a national priority. Months later, we saw why: in the midst of a “tripledemic” of COVID, flu, and respiratory syncytial virus, or RSV, panicked parents scoured pharmacies for children’s Tylenol and found only empty shelves. Sick adults couldn’t get their hands on over-the-counter cold medicines. Out west, the antibiotic amoxicillin was scarce.

As Canadian health-care professionals know, this was an extreme example of an old issue. One quarter of all Canadian drugs (over-the-counter and otherwise) were running short well before the pandemic, but there’s nothing quite like a global health crisis to expose a country’s weak points. To make sure shortages like this don’t keep happening, we need a plan—and the political will—to keep at least six months’ worth of critical drugs stocked on home soil at all times.

Canada’s fundamental problem, for a ​​long time, has been one of foreign depen​dence. The world of pharmaceuticals is attached to a hugely complex supply chain, one that’s easily disrupted by geopolitical problems (like wars), shipping issues (like high fuel costs) and, of course, viral outbreaks (like COVID-19). On top of that, the majority of the active pharmaceutical ingredients, or APIs, needed to make drugs are produced in India and China. And many brands are only supplied by one or two companies. One such drug is Clavulin, an oral antibiotic for children that was recently in short supply. 

In the past decade, the percentage of Canada’s drug spending allocated to imports rose from 74 to 93 per cent, making us especially vulnerable to supply cut-offs. As we saw with COVID vaccines, countries with their own production facilities will always prioritize getting treatments to their own citizens. If your drug-acquisition strategy relies heavily on imports, as ours does, you need mechanisms in place to protect yourself.

The good news is that Canada has run into this problem—and solved it—before. In the 1940s, most of our drugs were sourced from outside of the country. (For a while, we also paid some of the highest drug costs in the OECD.) To fix this issue, in 1969, the federal government amended the Patent Act to allow Canadian companies to manufacture patented drugs by paying royalties to brand-name pharmaceutical companies. This resulted in huge growth in Canada’s own pharmaceutical industry. But with the rise of free-trade agreements, like NAFTA, we buckled under external pressure to reverse that policy. Our companies could no longer compete; many of them went bankrupt or were bought out by overseas firms. To this day, Apotex is the only remaining large manufacturer of generic drugs in Canada. 

The best short-term solution Canada has for its current drug-supply problem is one we can copy from our neighbours. At the outset of the pandemic, the World Health Organization called on all countries to create a list of essential medicines—one that would ensure citizen access to critical drugs. Down south, the Trump administration issued an executive order to the FDA to compile a list of 227 must-have medicines, like aspirin and morphine, as well as their proper dosage methods. 

In Canada, we have no such list, aside from the 12 medicines declared critical by Health Canada during COVID, which include epinephrine and fentanyl. Drawing up our own list isn’t exactly rocket science: Health Canada simply needs to convene a panel of experts—pharmacists, doctors and representatives from the various provincial ministries of health—to decide which drugs should make the cut. For the most part, running out of something like cold medicine is an inconvenience. But people with more serious illnesses, like cancer, can’t afford to wait six months for a restock of oncology drugs. I’d also add things like anesthetics, epidurals, antibiotics and drugs used for diagnostic imaging to the list. Canadians and Americans have similar medical needs; we could very well use the FDA’s template as a starting point.

Once we know which drugs to prioritize, we need a more efficient way of stockpiling them. Like us, the European Union was crippled by a surge in sickness last winter; they began drawing up its own stockpiling plans back in January. Canada already has its own National Emergency Strategic Stockpile, or NESS, which is managed by the Public Health Agency of Canada. It’s available for the provinces and territories to dip into during emergencies. Unfortunately, it’s also riddled with problems. Back in 2010, an audit revealed that many of the NESS’s supplies were expired—some dating as far back as the 1960s. NESS was also short on much of the personal protective equipment we needed at the height of COVID. This cannot happen again.

A six-month stockpile of critical medicines should be readily available for distribution. To keep track of it, Health Canada (or some related federal department) needs to create a more rigorous internal inventory, one that’s digitized and updated in real time with every replenishing shipment or change in drug quantity. Another idea is to store the medicines in warehouses owned by the drug manufacturers themselves. The downside of this is that, in order to pay for the extra space, the government may have to allow producers to increase their drug costs. (To me, this provision is worth the price—especially in a resource-rich country like Canada.) To ensure the stockpile is always full, the federal government could establish a Crown corporation to manufacture these essential drugs. In the event of a national shortage—which, sadly is certain to occur again—production can be ramped up to meet demand. 

The long-term strategy is to create a thriving pharmaceutical industry at home. There are reasons to be hopeful: Moderna planted roots in Quebec back in 2020, with the eventual goal of producing 100 million mRNA vaccine doses every year. Last winter, Quebec’s Mantra Pharma distributed its first domestic shipment of M-Amoxi Clav—a generic of Clavulin. And researchers at the Université de Montréal are pioneering new technologies that could streamline the output of APIs, allowing manufacturers to more efficiently scale up production when our drug supply runs too low. Some people will say that Canada is simply too small a market to compete internationally, but we’ve done it once before. 

Canada again has some of the highest drug costs in the OECD, third behind the U.S. and Switzerland. We need to stop paying through our noses—and looking elsewhere—for medications that are essential to Canadians’ livelihoods. Young children shouldn’t be running fevers because we can’t secure something as simple as children’s Tylenol, and our solution can’t be to order two million bottles to get parents to stop complaining. We can’t wait for the next war—or pandemic-sized meltdown—to motivate us. We should always be prepared.