Mr. Speaker, I am very pleased to have the opportunity to address the House on the issue of drug shortages in Canada and around the world.
We know drug shortages are a concern for all Canadians, and we know this is not the first time our health care system has suffered as a result of a shortage situation. What we are experiencing here in Canada is a symptom of a much larger global problem. Drug shortages are global in nature and are felt by patients worldwide. If we are to resolve them, there will need to be collaboration on an international scale.
What brings us together today is our mutual concern over the drug shortages caused by the production slowdown at the Sandoz manufacturing facility in Boucherville, Quebec. The manufacturing issues that are currently ongoing at Sandoz in Canada are a local example of a global issue. Interruptions to supply such as the one Canada is facing can arise as a result of a variety of factors.
I would like to take this opportunity to share with the House some of the global factors that can bring about drug shortages here in Canada.
Often a drug shortage is a result of shortages in a raw material required to make the drug. These raw materials are often scarce and, in addition, they can be quite difficult and complex to produce. Perhaps most importantly, the ingredients for many medications are sourced internationally.
For example, a complex drug to treat cancer may be manufactured in Canada, the United States or Switzerland, but its raw materials can come from places such as India, China and Latin America. Furthermore, within these countries there are a limited number of suppliers of raw materials. When taken together, that means fewer raw material suppliers operating from a small number of countries but supplying the world's needs. The ability to meet the demands of the international community on a continuing basis is highly vulnerable to risk, which might affect that supply. Because of this worldwide dependency on a few raw material manufacturers, the market is in a constant state of flux between being able to meet supply demands and there being a lack of supply of the ingredients for the global market. Shortages of raw materials can occur when there is just one raw material supplier for a high-demand drug or if there is competition between several manufacturers for a raw material that is in short supply. As a result, our respective domestic supply chains are very much intertwined with international supply chains.
We also know that manufacturers in the countries we rely on for the supply of raw materials for drugs can run into many different types of production issues, which can deeply impact the overall global supply. As a regulator, Health Canada is responsible for reviewing the safety, quality and efficacy of drugs and for authorizing their sale in Canada. Once a drug is authorized for sale in Canada, Health Canada will monitor the safety of the marketed drug by collecting, analyzing and assessing adverse drug reaction reports that are submitted by the pharmaceutical industry, health professionals and consumers. If safety concerns are identified with a product, this may in turn result in a company recalling the drug, which in turn will result in a drug shortage for that particular drug.
The trigger for the remediation activities currently being undertaken at the Sandoz facility was the warning letter that was issued by the U.S. FDA. The U.S. FDA's observations for the facility focused on a product manufactured in Canada but intended exclusively for the U.S. market. Sandoz' international parent company, Novartis, made a business decision to focus on addressing U.S. concerns. As we are now clearly seeing, this decision has had a significant impact on Canadians.
In response to this letter, Sandoz decided to cease production on a number of its production lines in order to upgrade operations at its facility. However, some of those production lines were used to make drugs that were scheduled to be sold and consumed in Canada.
It should be noted that the reaction of Sandoz to the FDA ruling is not unusual. It is, in fact, fairly typical of the pharmaceutical industry to appease its customers with larger markets in order to assure its continued access to those markets. It also shows how global business practices of pharmaceutical companies should take into account the needs of our local population.
The business practices of the various players within the pharmaceutical drug supply chain can contribute to drug shortages in a number of ways. For example, manufacturers and wholesale drug distributors will routinely their supply by minimizing end-of-quarter or end-of-year product inventories. Manufacturers and wholesalers sometimes also limit the shipment of product based on the previous year's demand. Both practices can result in shortages at pharmacy and hospital levels.
In an effort to keep costs down and profits up, many manufacturers, wholesalers and pharmacies maintain minimal supplies of drugs in production or in stock. Just in time strategies like this can contribute to drug shortages. Some health care organizations keep little or no inventory on hand and are dependent on daily delivery by suppliers. In this case, a temporary supply disruption of a medically necessary drug can become a crisis for physicians and for patients.
Finally, we know that global pharmaceutical companies and manufacturers play a key role in bringing drugs to the market, but we also know that their business models have changed in the wake of globalization. Pharmaceutical industry consolidation has become the norm around the globe. When companies merge, less profitable product lines are often reduced or discontinued. Sometimes manufacturing facilities are closed altogether. When companies merge with similar product lines, this will often result in product consolidation, possibly resulting in changing a multi-source product into a single-source product. These practices result in fewer sources for drugs, leaving markets vulnerable to shortfalls.
When companies consolidate around the world, this means that the supply of drugs for both Canada and other countries increasingly rests on fewer and fewer production sites. Twenty years ago, a problem in one production site for a drug could be resolved by increasing supply at a similar site. In today's climate this is not possible because there is often only one company that produces a certain type of drug globally.
These are some of the global causes of the drug strategy shortages that we experience in Canada, but let us bear in mind that drug shortages are occurring around the world. To the south, the United States is experiencing drug shortages in increasing numbers. In the United Kingdom drug shortages are also emerging, often as a result of drugs meant for British markets being shipped and sold to Europe.
Un to now, the Canadian experience was not as drastic as that which has been experienced in the United Kingdom and Europe. Managing the global factors affecting supply of Canadian pharmaceuticals is a significant matter.
Our government recognizes that drug shortages are a concern for all Canadians. The health of those who rely on drug therapy and pharmaceuticals is a primary concern for this government. However, we should know that drug shortages occur in the global context and are as a result of a number of factors at work in the global supply chain.