Good morning. As mentioned, I'm David Johnston, president and CEO of the Canadian Association for Pharmacy Distribution Management, or CAPDM, as we are known.
On behalf of CAPDM, I thank the members of the House of Commons Standing Committee on Health for the opportunity to outline the role of the pharmaceutical wholesalers with respect to drug shortages. This is an issue that our industry is very concerned about and is working closely to address with other health care organizations in Canada, including those organizations presenting this morning.
First, I would like to offer you a brief overview of CAPDM so you see how we fit into the health care system generally and the drug shortages situation specifically.
Established in 1964, CAPDM is the voice of the Canadian pharmacy supply chain. Members consist of pharmaceutical wholesalers, self-distributing pharmacy chains, prescription and non-prescription drug manufacturers, both brand and generic, as well as goods and services providers to the pharmacy supply chain sector. We are a significant contributor to the efficiency of the Canadian health care system. Over 95% of pharmaceuticals across Canada are distributed to community and hospital pharmacies as well as long-term and specialized facilities by pharmaceutical wholesalers and self-distributing chains, with an order accuracy greater than 99%. Distribution of pharmaceutical products by pharmaceutical wholesalers is the system of choice for pharmacies and manufacturers.
By offering same day and next day delivery five days a week to all parts of Canada, through thousands of employees working in distribution centres in nearly every province, pharmaceutical wholesalers help to ensure timely patient access to vital pharmaceuticals and over-the-counter medicines. CAPDM pharmaceutical wholesalers, working with Health Canada regulators, are proud to be part of a pharmaceutical supply chain that has come to be admired at home and abroad as one of the best systems in the world.
The role of pharmaceutical wholesalers is to obtain available products from pharmaceutical manufacturers and distribute them under highly regulated pricing regimes in a safe, secure, timely, and economical manner to pharmacies. On the surface this may seem like a simple process. However, behind the scenes there are highly complex skills and technologies used by wholesalers to consolidate shipments from hundreds of manufacturers and deliver them to thousands of pharmacies.
This is crucial in sustaining the safety and viability of Canada's pharmaceutical distribution system, which in turn means the viability of the health care system itself. In today's world of growing demands and service, just-in-time storage and delivery are crucial to pharmacies, wholesalers, and manufacturers alike.
Before I describe our role when a product shortage occurs, I'd like to quickly define what the notion of shortage means to our industry. Shortage represents a reduced availability of one or several products from one or several manufacturers. Typically when a manufacturer experiences a supply issue, it will create an allocation for the impacted product or products to ensure fair distribution of available inventory to the market. This allocation may be at the geographic level or wholesaler distribution level, or even at the customer level, based on historical trends.
Pharmaceutical wholesalers do not cause drug shortages, nor do they have the information to predict a shortage. They do not determine the adjusted supply levels to each customer in the event of a shortage.
In times of shortage, the role of the pharmaceutical wholesaler is to support the allocation process by fulfilling and delivering orders according to the defined allocation instructions and stock replenishment received from the manufacturer. With their available inventory, pharmaceutical wholesalers will then implement order limits to ensure that as many customers as possible have access to the product experiencing a shortage and that no one region or organization will have a disproportionate amount of product.
CAPDM recognizes that drug shortages are a major issue, and we have developed a committee that is actively participating in a cross-industry initiative with Health Canada, known as the drug shortage working group, along with other health stakeholders, on proactively reporting on shortages. There's still much to be done by all stakeholders, and we look forward to continuing the progress made to date in creating a system to help Canadians better manage their medication needs within shortage situations.
In summary, during times of drug shortages, pharmaceutical wholesalers will continue their essential role of distributing all available products through the safe, secure, and efficient system they have developed.
Pharmaceutical wholesalers do not influence the cause of drug shortages but do manage the flow of available products in the market during shortages, and they are working with manufacturers, health care providers, and government to help find a solution to this situation. We look forward to continuing this important collaborative initiative.
Thank you for your time and attention. We'd be delighted to answer any questions.