Mutual Recognition of Drug Approvals

'The Case for Mutual Recognition of Drug Approvals' by Bacchus Barua and Nadeem Esmail in the right wing Fraser Institute's (2013) Studies in Health Policy argues

Modern medicines improve both health outcomes and quality of life for those stricken with illness, and their ability to do so continues to improve and advance over time. Every day, researchers and scientists work to come up with new and innovative ways to treat illnesses, mitigate suffering, and prolong life while research-based pharmaceutical companies invest in the development and testing necessary to bring these innovations to market.

The medicines that are available today are not only able to treat illnesses that could not previously be treated, but also represent a substitution for older, less efficient, and less effective methods of treatment. Even in cases where medicines may not have a different impact therapeutically, they can expand access to better health through reductions in adverse events and reactions, and may work better for some parts of the population poorly served by previous advances.

However, access to these newer (and superior) pharmaceuticals is not equal across developed countries. This is, in part, the result of governmental regulations and approvals. Critically, new medicines are only accessible by the public after they have been granted regulatory clearance by the host jurisdiction’s responsible body such as Health Canada, the United States Food and Drug Administration (FDA), and the European Medicines Agency (EMA). The efficiency with which these agencies approve drugs and the numbers of drugs ultimately approved varies considerably between these regulatory authorities.

While the potential for harm that accompanies any new medicine on the market may provide some justification for regulatory approval in general, the question of why such approval is duplicated in one jurisdiction (e.g., Canada) while it is being undertaken in another with comparable standards (e.g., Europe) remains. Indeed, to the extent submissions to these agencies and their efficiency in approving them vary, such duplication of effort reinforces the unfortunate reality that drugs are available to patients in different countries, at different points in time.

This study aims to measure the difference in access to new medicines that results from duplication of effort in Canada. By compiling a list of new drugs approved in Canada between 2005-2011/12 (Health Canada moved from calendar-year to fiscal-year reporting in 2011/12), and comparing the corresponding approval dates with those in the United States and the European Union, we seek to provide Canadians an estimate of how much sooner these new drugs would have been available to them in the absence of what might be considered an unnecessary regulatory hurdle imposed by Health Canada.

The authors comment that

Past studies have shown that Health Canada both takes longer to approve medicines, and approves fewer medicines than its American and European counterparts (Downing et al., 2012; Rawson, 2013; Barua and Esmail, 2013). However, these studies do not necessarily provide a true representation of differences regarding when drugs are eligible for sale in the three jurisdictions. Critically, a delay in accessing new drugs in one country in comparison with another can have two sources: a difference in approval time (efficiency) and a difference in when the drug was submitted for approval in the first place.

In order to better capture the delay in timely access to medicines, this study undertakes a drug-by-drug comparison for dates of approval granted by Health Canada, the FDA, and the EMA (including both the centralized; approval procedure and the mutual recognition approach). We seek to measure the differences between when populations served by these agencies were ultimately granted access to new pharmaceutical products and therapies. We find considerable delays in access to new medicines in Canada in comparison with access in the United States and Europe.

Of the 149 drugs approved in both Canada and the United States between 2005 and 2011/12, approval was granted a median 350 days earlier in the United States. Of the 146 drugs approved in both Canada and Europe, approval was granted a median 263 days earlier in Europe. The more important factor in explaining these delays in access to medicines in Canada is differences in the dates on which manufacturers submitted new drugs to agencies for regulatory approval.

If we constrain our analysis to compare drugs for which submission dates are available, the average 682-day difference in approval dates between Canada and the United States (for 120 drugs) consists of an average 635-day difference between submission dates, and an average 48-day difference in efficiency (figure E1). Similarly, the average 417-day difference in approval dates between Canada and Europe (for 131 drugs) consists of an average 315- day difference between submission dates, and an average 102-day difference in efficiency (figure E1).

Several reasons for this difference in submission may exist, including differences in market-investment attractiveness due to prevalent intellectual property protection regimes, the size of the potential market of consumers, regulatory controls on drug pricing, and the reimbursement policies practiced by public and private insurers. Another reason, more directly related to regulatory activities, is the extra financial burden incurred through user fees and the costs associated with creating a submission for a particular agency. Relevant considerations for Canada include the fact that the Canadian market is a fraction of the size of markets in the United States and the European Union. Further, the Canadian market is characterized by both long delays for coverage by provincial drug plans and a high rate of refusal to cover, as well as relatively weaker intellectual property protections (Rovere and Skinner, 2012; Esmail, 2013). Any of these may provide incentives to delay or forego submission to Health Canada altogether.

One way to reduce the loss of potential benefits from access to newer medicines, at least for Canadians, would be to better recognize that the approach taken by Health Canada is unnecessary and perhaps harmful. Importantly, Health Canada’s approval process largely duplicates what is already being done (much earlier and more efficiently) in the US and Europe, which means the benefits of this process for Canadians are limited at best. Health Canada’s approach to scientific review of new drugs is not considerably different from those in the US and Europe (Rawson, 2013; Rawson, 2003; Paul, 2001). Critically, Canadian laws and regulations regarding prescription drugs have generally followed those of the United States (Graham, 2005). Further, there are many similarities between the drug approval processes in Canada, the US, and the EU. Paul (2001) notes that the FDA’s “procedures and requirements are the framework for those of the EU and Canada” (2001:233).

All of this means that Canadians are denied the health benefits of many medicines for months, if not years, waiting for their government to duplicate approvals already provided in other jurisdictions. Given the low and similar rate of withdrawal of drugs (at least between the US and Canada), it can be said that this delay is denying Canadians access to many medicines that will ultimately be found sufficiently safe and effective to not be withdrawn from the marketplace. Canadians also, potentially as a result of the costs of entering a small and highly regulated market, receive access to fewer medicines in total than their counterparts in other developed nations, leaving Canadians with fewer therapeutic options and potentially worse health outcomes. Beyond these foregone benefits lie the costs to taxpayers and drug manufacturers of funding this duplicative process.

This provides a strong reason to seriously consider whether or not Health Canada’s mandatory approval process is in fact beneficial to Canadians, and to consider replacing Health Canada’s mandatory approvals with a mutual recognition process. Under such an approach, FDA or EMA approval decisions could be considered sufficient for market access in Canada. The clear benefits of mutual recognition would be a reduction in costs of entry to the Canadian marketplace and a significant reduction in the delay Canadians endure to access new drugs.

This process can be implemented while maintaining Health Canada’s ability to provide safety warnings and to require withdrawal of a drug from the Canadian marketplace, while maintaining Health Canada’s approval process on a non-mandatory basis. Specifically, while FDA and EMA approvals could be accepted as sufficient for market entry, they could also be subject to a labeling requirement stating the approval was through a mutual recognition process with the FDA and EMA and that Health Canada had not approved that particular medicine. This would give Canadians the opportunity to decide for themselves if they felt Health Canada’s approval process provided additional safety or protection from the risks associated with a new drug in addition to the processes undertaken in either the US or Europe. Such reform facilitates earlier access for Canadian patients willing to take on a higher level of risk for the potential benefit of earlier relief, while more risk-averse patients would be able to wait for Canada-specific approval voluntarily.

A mutual recognition process may provide an opportunity for Health Canada to shift away from performing a largely unnecessary function that may be subject to negative marginal returns, to one whose importance is being increasingly identified. Importantly, the resources saved through the mutual-recognition approach could be in part redirected towards more active post-market surveillance of drug safety and risk. These resources might also be refocused towards funding and supporting better communication of the risks associated with certain drugs so that physicians and patients can make more informed decisions about their use of drugs and about the risk/benefit tradeoff they are facing when choosing a particular treatment option. With increasingly complex products being approved, such efforts would leave more control of the risk/benefit tradeoff in the hands of those directly exposed to it rather than to risk-averse regulators who have strong incentives to minimize risk at the expense of potential benefit to patients.