The future of pharmaceutical access in Canada is facing modern headwinds as the United States, under President Donald Trump, continues to pursue a strategy of “Most Favoured Nation” (MFN) drug pricing. This approach, designed to lower drug costs for Americans, risks further delaying the introduction of new medications to Canadian patients already navigating a complex and lengthy approval process, according to a recent analysis by the Macdonald-Laurier Institute.
Trump’s plan centers on requiring drug companies to offer the United States the lowest price they offer anywhere in the world. The United Kingdom has already begun to adjust to this pressure, agreeing to increase its spending on innovative medicines by as much as 25 per cent as part of a trade deal with the U.S. This shift highlights the potential for increased costs for countries like Canada, which have historically benefited from lower drug prices compared to the American market. The implications extend beyond cost, potentially impacting the speed at which Canadians gain access to life-saving treatments.
The existing Canadian system for drug approval and reimbursement is already characterized by significant delays. Two organizations – Canada’s Drug Agency (CDA) and the Institut national d’excellence en santé et en services sociaux in Quebec – assess the value of new medicines. Following this assessment, the pan-Canadian Pharmaceutical Alliance (pCPA) negotiates prices with drug manufacturers on behalf of provincial and territorial governments. However, the process is demonstrably slow, creating a bottleneck that leaves Canadians waiting longer for access to new therapies.
Data reveals a concerning pattern of delays. Between 2020 and 2024, only two per cent of the 344 reimbursement recommendations issued by the CDA were completed within the agency’s six-month performance target. On average, recommendations took over eight months, with nearly 30 per cent exceeding nine months. 99 per cent of these recommendations were conditional, requiring clinical criteria, price reductions, or both, adding further complexity and potential for delay.
The pCPA’s performance is similarly lagging. While the agency aims to invite manufacturers to negotiate prices within 40 business days and complete negotiations within 90, less than 20 per cent of invitations and only half of negotiations were finalized within those timeframes between 2020 and 2024. The overall average delay from submission to the CDA to completion of price negotiations with the pCPA is 18 months, with 15 per cent of cases taking two years or more.
These delays aren’t simply bureaucratic inconveniences; they have real-world consequences for patients. The current system means that Canadians often wait significantly longer than their counterparts in the United States and Europe to access new medications, including those for aggressive cancers and debilitating conditions like Amyotrophic Lateral Sclerosis (ALS). The lengthy process also adds to the perception that Canada “freeloads” on the research and development investments made by other nations, a point underscored by the Macdonald-Laurier Institute’s analysis.
The situation is further complicated by the fact that even after a drug is recommended for reimbursement and a price is negotiated, it isn’t automatically added to provincial drug lists. Governments can still impose additional requirements or choose not to list the medication, creating a “postal code lottery” where access varies across the country. Applications to Health Canada are typically submitted a year after those in the U.S. And EU, and Health Canada’s review process itself takes approximately a year.
The CDA acknowledges the demand for improvement and has proposed some revisions to its timelines, but these changes are unlikely to address the fundamental issues causing the delays. The agency and the pCPA, according to the analysis, appear resistant to acknowledging the severity of the problem. Trump’s MFN strategy adds another layer of complexity, potentially incentivizing pharmaceutical companies to prioritize markets with more favorable pricing conditions.
The potential for increased prices and further delays is likely to be viewed as a significant irritant by the Trump administration. His MFN approach directly contradicts Canada’s current strategy of controlling drug prices, potentially leading to further trade tensions and reduced access to innovative medicines for Canadians.
As the United States continues to implement its MFN drug pricing strategy, Canada faces a critical juncture. Addressing the inefficiencies within its own drug approval and reimbursement system will be crucial to mitigating the potential negative impacts and ensuring that Canadians have timely access to the medications they need. The next key development will be the CDA’s implementation of its proposed timeline revisions, and their demonstrable effect on reducing approval times.
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