By Maria Lily Shaw
and Krystle Wittevrongel
Montreal Economic Institute
The past year has shown us beyond the shadow of a doubt that human ingenuity is a match for the greatest of challenges. The rapid development and mass production of several COVID-19 vaccines are proof of our remarkable capacity for innovation.
Pharmaceutical innovation, one of the great triumphs of modern times, is not a new phenomenon, of course. Not only have we relegated many once-deadly diseases and medical conditions to the dustbin of history, but the emergence of new drugs and vaccines continues to substantially lengthen our life expectancy. Indeed, by some estimates, up to 73 per cent of the increase in life expectancy in recent decades is due to the development of new medications.
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The use of effective pharmaceuticals also leads to savings elsewhere in the health-care system. It is estimated that, in Canada, each additional dollar allocated to drug spending yields an average reduction of $1.50 in hospital expenditure. If that’s true and if drug spending were to increase by just five per cent in Canada, the savings in annual hospital expenditures would be approximately $3 billion. To take just one example, it is much less expensive to administer a COVID-19 vaccine than to pay for someone’s stay in intensive care. Drugs should be seen as a concrete and affordable, if also only partial, solution to the perpetual overcrowding that plagues our hospitals.
The fact that we have received these vaccines so quickly is due, among other things, to accelerated approvals by governments. The difference with the usual time frames is even more marked in Canada. Our standard process takes, on average, three months longer than the process in the United States and one month longer than in Europe. And this gap is actually even larger given that pharmaceutical companies generally prefer to initiate approval with the U.S. Food and Drug Administration before coming to Canada.
Knowing that these new drugs and vaccines are likely to increase our life expectancy and quality of life as well as save us money, we should ask what can be done to reduce these approval delays as much as possible. Of course, the scientific process must follow its due course to ensure the safety of drugs and vaccines. But if other countries can provide their approvals as safely but faster than us, that should be the cue for us to accelerate our approvals.
In its standard pathway, Health Canada aims to respond to the pharmaceutical innovator within 300 days. But it mainly fails to do so. Of all new drug submissions filed between 2015 and 2019, only 33 per cent received a response within the target timeline, while 18 per cent took more than a year to review and nearly five over two years. On average, the standard review took 335 days.
Health Canada does provide two accelerated pathways to approval but they do not live up to their promise. Under “conditional compliance,” it reduces the target timeline to 200 days. But between 2015 and 2019, the average time to approve a new drug submission via this pathway was 302 days — two days longer than the normal target! Only eight per cent of applicants received a response within the 200-day target.
So what can be done? We have two recommendations. First, make permanent the use of rolling submissions for drugs and vaccines, which is what allowed COVID-19 vaccines to be approved so quickly and safely. The approval process can be drastically shortened by proceeding with the evaluation of incomplete applications and accepting new information as it becomes available. Unfortunately, rolling submissions were made possible by an interim order issued by the minister of health that expires in September unless it is renewed. We obviously recommend that it should be.
Our second recommendation is for agreements to be negotiated with the U.S. Food and Drug Administration and the relevant European authorities to expedite the authorization of drugs that have already been approved in these places. If that is done, Canadians will be able to access potentially life-saving products much more quickly.
The past year has reminded us of the importance of acting expeditiously to access new drugs and vaccines. Why go back to our old way of doing things?
Maria Lily Shaw is an Economist at the MEI and Krystle Wittevrongel is a Public Policy Analyst at the MEI. The views reflected in this opinion piece are their own.
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