International Harmonization of drug approvals - is Health Canada too slow?

Author: Alexander Stack Professional Corporation |


Here’s an opinion piece from the National Post “Speed and Drugs”, by Brett Skinner and Mark Rovere of the Fraser Institute.

An interesting article – which basically says that Health Canada is slower than its European and United States counterparts in approving new drugs, but has no better safety record. So, Health Canada is imposing a cost (delays in approving new drugs) on Canadians for no compensating benefit. And, they suggest greater harmonization with Europe and/or the US to fix the problem – basically by establishing mutual recognition for drug approvals (or steps in the drug approval process) with European or US authorities.

Here are some comments, but first I should acknowledge that this is a newspaper article, limited in length, not a full report or academic article. My quibbles and concerns might well be considered and discussed in the authors’ work.

Health Canada’s regulation in this area rests upon a three-way trade-off: the speed of approvals, the quality of approvals (i.e. addressing safety concerns), and the cost of approvals. For a given cost, Health Canada can be fast, or it can be careful, but there is a trade-off involved. And presumably Health Canada can’t just conjure up additional funding to improve either metric by imposing greater fees on drug company applicants or getting more funding from the government purse. It is difficult to comment on whether Health Canada, considered as an isolated agency, is doing a good job or a comparable job to its global peers without information on its funding compared to the European and US agencies.

Putting that to one side, however, it is still perfectly fine to talk about the results of the system as a whole – which is what Skinner and Rovere are doing – without identifying where the differences in results between Europe, the US and Canada arise.

One question I would have is about the nature of “safety” issues being addressed by Health Canada and its counterpart agencies. Does the danger – the drawbacks – of lesser quality decisions follow a normal distribution, or is it skewed? In other words, does the effect of increases and decreases of decision-quality on safety over a large number of drugs converge on some sort of well-behaved curve, or is it the case that one bad decision can be catastrophic (i.e. a skewed distribution)? Does this follow the law of large numbers to converge on an average, or not? (I’m probably not expressing this very well L )

Skinner and Rovere go on to suggest that mutual recognition is a “solution” to the problem. Which generally sounds right to me – especially if we are considering mutual recognition of specific steps in the drug approval process rather than mutual recognition of final approvals, period.

But, if safety dangers are skewed, then I think the mutual recognition argument is weakened.

Generally, regulatory harmonization is justified if the benefits outweigh the losses of individual preferences for the harmonizing states. Here, the benefits seem straightforward: if Canada and the EU have mutual recognition, Canada and the EU can reduce their spending (private or public) on drug approvals.

What about the benefit of faster approvals for Canadians? (assuming the European process continues unchanged by mutual recognition) Well, that’s where we get to questions of the trade-off between safety, cost and speed and whether the dangers of poor decisions are skewed.

If the dangers follow a normal well-behaved distribution, then is there a reason to think that Canada’s preferences for drug safety are different from Europe’s? Well, maybe- there’s no doubt Europe has a large pharmaceutical industry that wants its drugs approved!

But, if that doesn’t matter, differences in preferences for drug safety between Canada and Europe are likely to be small. As Skinner and Rovere write “In economic terms, any incremental improvement in drug safety from more rigorous or frequent testing is subject to diminishing returns.” And the field might well be ripe for harmonization and mutual recognition.

But what if it is skewed? Well, then Canada and Europe’s preferences on the level of testing for drug safety might not converge. Canada might prefer a higher level of safety testing, and it might be a choice with real impact on risk – not subject to the same kind of diminishing returns. And the scope for harmonization/mutual recognition is lessened.

Another question (while I’m on a roll, posing unfair questions about a newspaper opinion piece ;) ) - is this harmonization/mutual recognition going to have any effect on improvements to the approval system over time? One positive effect of parallel systems running is a greater scope for experimentation in procedures, testing etc. – experimentation which can lead to improvements that can be implemented widely to everyone’s benefit. Harmonization necessarily reduces the likelihood of such experience-based learning.

But, analyzing whether this is a big concern in the drug approval process would require some careful consideration of the international system(s) as a whole. It may not be a big deal in the drug approval context.

Bottom line – mutual recognition sounds good to me, especially if we’re talking about mutual recognition of specific steps in the approval process. But, I’d need more information and analysis before I’m truly convinced.

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