Canada Gazette, Part I, Volume 152, Number 24: Regulations Amending the Food and Drug Regulations (Serious Adverse Drug Reaction Reporting — Hospitals)

June 16, 2018

Statutory authority
Food and Drugs Act

Sponsoring department
Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Issues: Real world effects of a therapeutic product continue to be uncovered once a product is authorized and in use by the broader population. People can react differently to the same therapeutic product, due to genetic variations, the environment, lifestyle factors, age, and the presence of more than one disease or illness. Sometimes, these adverse reactions or incidents are serious enough that they can be life-threatening, leading to hospitalization and, in rare instances, death.

Rapid advances in science, medicine and the way information is communicated provide opportunities for real world data to be collected and assessed by Health Canada as part of a life-cycle approach to the regulation of therapeutic products. Reports of serious adverse drug reactions (SADRs) and medical device incidents (MDIs) by manufacturers and importers (collectively referred to as "industry" for the purposes of this document, where appropriate), health care professionals and the public are often the first sign of emerging safety problems.

Currently, only industry is required to report SADRs and/or MDIs; reporting by health care professionals and consumers is voluntary. Health Canada is aware that, at present, a potentially significant number of SADRs and MDIs go unreported.

Description: The proposed regulations would amend the Food and Drug Regulations and the Medical Devices Regulations to require hospitals to report SADR- and MDI-related information directly to Health Canada. The collection and assessment of this real world information will help Health Canada to better monitor the safety of therapeutic products once they are on the Canadian market.

Cost-benefit statement: Based on the number of hospitals in Canada (i.e. corporations and not individual facilities) expected to be subject to the proposed reporting requirements, the total cost to health care institutions is expected to be an average annualized cost of $32,772,531, which would translate to a present value cost (discounted by 7%) of $228,362,977 over 10 years.

The anticipated benefits are based on the assumptions that the reports to Health Canada will improve the real world data of therapeutic products, which in turn will generate better regulatory actions, such as label changes and/or risk communications regarding these products. Based on available data regarding rates of occurrence, Health Canada estimates that the total cost that SADRs and MDIs represent to Canada is estimated as falling between $14.9 and $15 billion per year in 2018 dollars, including costs to the health care system, lost wages, and deaths attributable to these adverse reactions and incidents. Based on this cost, an anticipated reduction in SADRs and MDIs is expected to generate annualized savings of $99,097,606, which would represent a present value benefit of $658,973,753 over the same 10-year period.

The proposed regulations would represent a net annualized benefit of $66,593,725 over 10 years, and a net present value benefit of $430,610,777 over 10 years, discounted at 7%.

"One-for-One" Rule and small business lens: The "One-for-One" Rule and small business lens do not apply in relation to the proposed regulations.

Background

Like all global therapeutic product regulators, Health Canada recognizes that there are limitations to the understanding of the potential benefits and risks of harm of a product prior to its authorization for sale. While authorizations for sale are based on the outcomes of clinical trials, important knowledge is gained throughout each stage of a product's life cycle, including once it is on the market.

In November 2014, the Protecting Canadians from Unsafe Drugs Act (Vanessa's Law) [Vanessa's Law] received royal assent. Vanessa's Law provides Health Canada with the legislative tools necessary to regulate the authorization for sale and safety of therapeutic productsfootnote1 based on a life-cycle approach (i.e. products are rigorously and appropriately assessed for quality, benefits, harms and uncertainties both before and after they enter the general market). This approach is being adopted by regulatory agencies worldwide, and is based on the recognition that important information about the safety and effectiveness of a drug can be learned after a product is brought to market and is in use by the broader population.

Health Canada's monitoring of therapeutic products plays a vital role in public health and patient safety, providing health care providers and patients with up-to-date knowledge about the products they use to treat their health. The product monograph (for drugs) and instructions for use (for medical devices) are the basis of information for health care professionals on how to use a therapeutic product safely and effectively. As more knowledge and experience is gained, product labelling, including the product monograph and instructions for use, may be modified and improved. This post-market safety knowledge is built from several data sources, including adverse drug reaction (ADR) and medical device incident (MDI) reports. By reporting ADRs and MDIs, patients and health care professionals are participating in the system that helps make therapeutic products safer.

Health Canada is continuously looking for ways to strengthen the post-market knowledge base to enhance the safety and reduce the uncertainty associated with the real-world benefits and harms of therapeutic products. Vanessa's Law amended the Food and Drugs Act (the Act) to introduce, among other things, a new requirement in section 21.8 of the Act for prescribed health care institutions to provide the Minister of Health with prescribed information that is in their control about an SADR or MDI that involves a therapeutic product.

Regulatory amendments are necessary to prescribe the types of health care institutions that would be required to report, the types of reportable SADRs and MDIs, the types of reportable therapeutic products, the information required to be included in a report, and the timelines for reporting.

Issues

Canada has one of the safest and most rigorous drug and medical device authorization systems in the world. While clinical trials are an important part of the pre-market assessment of therapeutic products, real world effects continue to be uncovered once a product is authorized and in use by the broader population. People can react differently to the same therapeutic product, due to genetic variations, the environment, lifestyle factors, age and the presence of more than one disease or illness. Sometimes these effects are serious enough that they can be life-threatening, leading to hospitalization and, in rare instances, death.

Rapid advances in science, medicine and the way information is communicated now provide opportunities for real world data to be collected and assessed as part of a life-cycle approach to the regulation of therapeutic products. Reports of SADRs and MDIs by industry, health care professionals and the public are important for managing the risks associated with the use of these therapeutic products, and are often the first sign of emerging safety problems. Hospitals are uniquely positioned to identify and report SADRs and MDIs, thereby broadening the real world data available to Health Canada.

At present, reporting in Canada generally consists of two components: reporting by industry on a mandatory basis (a regulatory requirement); and reporting by health professionals, patients, consumers and health care institutions on a voluntary basis. This voluntary reporting is provided to either the relevant manufacturer or directly to Health Canada. Although it is mandatory for industry to in turn report to Health Canada, they ultimately rely on the information submitted to them on a voluntary basis by health professionals, patients, consumers, and health care institutions. International studies estimate rates of reporting (to industry or regulatory agencies) to be as low as 1–10%, and there is no evidence to suggest that Canadian reporting rates are higher.footnote2 This under-reporting of important therapeutic product information is a concern to Health Canada, as it reduces the Department's ability to identify, at an early stage, potential safety problems and to take action to prevent harm to patients.

Objectives

The central objective of the proposed regulations is to improve the quality and increase the quantity of SADR and MDI reports, and to expand on the real world evidence used by Health Canada to monitor the safety and effectiveness of therapeutic products, as part of a life-cycle approach to the regulation of such products.

Description

Section 21.8 of the Act introduced the requirement that: "A prescribed health care institution shall provide the Minister, within the prescribed time and in the prescribed manner, with prescribed information that is in its control about a serious adverse drug reaction that involves a therapeutic product or a medical device incident that involves a therapeutic product."

The proposed regulations would amend the Food and Drug Regulations and the Medical Devices Regulations to require the reporting, by hospitals, of SADRs and MDIs associated with the use of pharmaceuticals (prescription and non-prescription), biologic drugs (excluding a vaccine administered under a routine immunization program of a province or territory), radiopharmaceuticals, disinfectants and medical devices, within 30 days of first being documented by a hospital.

The proposed regulations define a hospital as a facility that (a) is licensed, approved or designated as a hospital by a province or territory, in accordance with the laws of the province or territory, to provide care or treatment to persons suffering from any form of disease or illness; or (b) that is operated by the Government of Canada and that provides health services to persons who are in-patients. For greater clarity, the proposal also creates a definition for an MDI within the Medical Devices Regulations.

The proposed regulations set out the type of information required to be reported to Health Canada, and includes the name of the hospital and the contact information for a representative of the hospital; identifying information for the drug and/or medical device; a description of the SADR or MDI; and, in the case of an SADR, the age and sex of the patient.

Where additional information is known within the proposed 30-day time frame, the proposed regulations would require that this additional information also be reported to Health Canada. Such information could include the date of the first reaction or incident, any underlying health conditions directly related to the reaction or incident, and patient health outcomes.

To enhance clarity and alignment across the Food and Drug Regulations, Health Canada is also proposing consequential amendments to Part C, Division 10, of the Regulations (Access to Drugs in Exceptional Circumstances) to indicate that prescribed health care institutions are "hospitals" within the same meaning as described above. The term "hospitals" would replace the scope of institutions currently required to report under Division 10 (i.e. all health care institutions authorized by the laws of a province to provide acute care services). To further enhance alignment, the SADR reporting requirements being put forward in this proposal would also replace those currently found in Division 10 (C.10.004).

Regulatory and non-regulatory options considered

Health Canada has assessed a range of regulatory and non-regulatory options to collect additional information on SADRs and MDIs, with a view to establishing an approach to reporting by health care institutions that would enable the capture of meaningful, high-quality information and achieve the safety monitoring objectives of Vanessa's Law, while taking steps not to impose unnecessary burden on health care institutions.

Option 1: Status quo

Currently, only industry is required to report SADRs and MDIs to Health Canada. Since 1965, Health Canada has operated a voluntary reporting system for health care institutions, health care professionals, and consumers. In an effort to encourage and facilitate reporting of ADRs and MDIs by health care professionals, Health Canada has previously undertaken a number of activities, including increasing access to more user-friendly reporting methods, developing educational modules and raising awareness about the importance of voluntarily reporting ADRs and MDIs. Despite these non-regulatory initiatives, reporting rates have remained low. Therefore, the status quo option does not represent a viable means of achieving the objective of Vanessa's Law to improve the quality and increase the quantity of ADR and MDI reports, thereby ensuring there is sufficient information to detect safety problems.

Option 2: Amending the Food and Drug Regulations and Medical Devices Regulations — Selected option

With the new authorities introduced by Vanessa's Law, Health Canada has the ability to take regulatory action in concert with non-regulatory measures to enhance SADR and MDI reporting. This option would amend the relevant regulations to require hospitals to report to Health Canada SADRs and MDIs within 30 days of them first being documented. This is the Department's preferred option, as it provides a legal mechanism to ensure that events deemed clinically significant by frontline health care professionals are reported to Health Canada with optimal information, thereby broadening the evidence base used to identify new safety signals or confirm existing safety signals generated from other data sources.

In developing the regulatory proposal, options around the following factors were considered.

Applicable health care institutions

The proposed regulations would apply to all hospitals regulated through provincial or territorial legislation, as well as to those operated by the federal government and that provide health services to persons who are in-patients. It is Health Canada's view that such institutions are most likely to treat patients presenting with SADRs and MDIs. These institutions are well positioned to make and report these observations, and are more likely to have the infrastructure needed to effectively support quality reporting while minimizing the relative burden of such reporting.

Health Canada's initial proposal was to limit the scope of the reporting requirement to only those hospitals that provided acute care services. Consideration was also given to restricting reporting to a subset of targeted hospitals (e.g. teaching or large community hospitals). However, broadening the scope to all hospitals would likely capture reporting from potentially important facilities, such as chronic care and extended care hospitals and mental health facilities, where treatment of such reactions/incidents may occur.

Health Canada also considered expanding the scope of the reporting requirements to include all health care institutions, including those that provide in-patient and out-patient care, diagnostic or therapeutic services, laboratory services, nursing care, etc. While this option in theory could capture the broadest amount of information, there are several reasons why such an approach was found to be less viable. In a real world setting, patients presenting an SADR or MDI that is observed at any given health care institution would likely be transferred to a hospital for treatment, where reporting of the reaction/incident would then occur. Based on this approach, Health Canada is of the view that the overall number of reports will be sufficient to help identify and validate potential safety issues.

Health Canada is also of the view that health care institutions outside hospitals are also less likely to have the infrastructure needed to investigate and effectively report SADRs/MDIs, and would likely bear a significant burden to comply with the reporting requirements.

Types of reportable reactions and incidents

The proposed regulations would require hospitals to report all documented SADRs as well as all documented MDIs, including MDIs with the potential to cause harm if they reoccur, where the required information is within the control of the hospital.

The Food and Drug Regulations, Part C, Division 1, subsection C.01.001(1.1) define, for the purposes of the Act, an SADR as having the same meaning as in subsection C.01.001(1):

a noxious and unintended response to a drug that occurs at any dose and that requires in-patient hospitalization or prolongation of existing hospitalization, causes congenital malformation, results in persistent or significant disability or incapacity, is life- threatening or results in death.

Similarly, the Medical Devices Regulations, paragraphs 59(1)(a) and (b), state that an MDI

…is related to a failure of the device or a deterioration in its effectiveness, or any inadequacy in its labelling or in its the [sic] directions for use; and … has led to the death or a serious deterioration in the state of health of a patient, user, or other person, or could do so were it to recur.

For greater clarity, the proposed regulations would create a new definition of an MDI within the Medical Devices Regulations, for the purposes of the Act, that would explicitly state:

medical device incident means an incident related to a failure of a medical device or a deterioration in its effectiveness, or any inadequacy in its labelling or in its directions for use that has led to the death or a serious deterioration in the state of health of a patient, user, or other person, or could do so were it to recur.

Documented information in the control of a hospital about an SADR or MDI could include, for example, a serious adverse reaction/incident that is identified in a patient's clinical record, or a separate reporting form (electronic or hard copy) that has been completed by a health care professional. There would be no need to perform a causality assessment to determine whether a therapeutic product caused the SADR/MDI in order to send an SADR/MDI report to Health Canada. This approach aligns with international best practices for such reporting.

When considering options on the types of reportable reactions/incidents, Health Canada sought to balance the desire to increase reporting rates with the need to minimize operational impacts on hospitals. Health Canada had initially considered limiting ADR reporting to reactions that are both serious and unexpected (i.e. an SADR that is not identified in nature, severity and frequency in the risk information set out on the label of the drug, including information set out on the product monograph) as a means of limiting reporting to circumstances that are a higher priority for product safety monitoring. However, such an approach could potentially screen out information deemed clinically significant by health care professionals that would be valuable in monitoring therapeutic product safety.

Therefore, the proposed regulations would require the reporting of SADRs and MDIs. This approach is expected to result in a significant increase in the number of reports generated by hospitals, and to enhance the amount of information available to Health Canada to identify potential safety risks and improve product safety. Such an approach is also expected to simplify the reporting process.

Types of therapeutic products

This new reporting requirement applies specifically to SADRs and MDIs that involve therapeutic products. Vanessa's Law defines a "therapeutic product" as "a drug or device or any combination of drugs and devices, but does not include a natural health product within the meaning of the Natural Health Products Regulations."

Health Canada interprets "drug" under the Food and Drugs Act to include pharmaceuticals (prescription and non-prescription), biologics (including vaccines), radiopharmaceuticals, cells, tissues and organs, blood and blood components, semen, and disinfectants.

While new reporting requirements for SADRs would ideally apply to all types of drugs to maximize the amount of safety data provided, Health Canada is of the view that it would be excessive to apply these requirements in those cases where a product type is already subject to some form of adverse reaction reporting requirements by either health facilities or health care professionals.

As the mandatory reporting of adverse reactions to drugs such as cells, tissues and organs, blood and blood components and semen is already required for certain types of health facilities through other federal regulations, Health Canada is not putting forward regulatory amendments related to these product categories through this proposal.

Similarly, drugs and devices that are regulated under clinical trial and Special Access Program (SAP) frameworks have separate reporting schemes in place. Therefore, excluding these categories of drugs and devices from the new reporting requirements under Vanessa's Law is also being proposed.

For drugs regulated under Part C, Division 10 of the Food and Drug Regulations (i.e. those set out in the List of Drugs for an Urgent Public Health Need), the Regulations currently contain SADR reporting requirements that are similar to the requirements outlined in this proposal. To avoid confusion and redundancy for health care institutions, Health Canada proposes to repeal the requirements under Division 10 and to align the reporting requirements. This would mean that, as part of an SADR report related to a drug for an urgent public health need, hospitals would have to provide some information that was previously not a requirement, such as a patient's age and sex, the date on which the patient first used the drug, the date on which the SADR first occurred, any medical condition of the patient that directly relates to the SADR, any concomitant therapeutic products used by the patient, and the result of the SADR on the patient's health.

In determining whether to require mandatory reporting for vaccines, Health Canada took into consideration that, as part of provincial immunization programs, adverse events following immunization (AEFI) are reported to local health units, so that medical officers of health can monitor local programs. These reports are also forwarded to provincial health authorities, as well as to the Public Health Agency of Canada, for national collation and analysis. The Public Health Agency of Canada shares the data in these reports with Health Canada, enabling regulatory action where appropriate.

Health Canada is of the view that sufficient SADR information related to vaccines administered under a routine immunization program of a province or territory is captured through the current AEFI reporting network, and that this information is currently being provided to Health Canada. Requiring the mandatory reporting by hospitals for SADRs related to these vaccines would result in a duplication of reporting for this class of therapeutic products. In light of the established AEFI network that monitors vaccine safety, and given that AEFI reporting is mandatory for health care professionals in most provincial and territorial jurisdictions, it is proposed that vaccines administered under a routine immunization program of a province or territory be exempted from the scope of the reporting requirements. The proposed regulations would still apply to other types of vaccines that are used outside of routine immunization programs.

Therefore, the proposed regulations would require the reporting of SADRs and MDIs associated with the use of pharmaceuticals (prescription and non-prescription), biologic drugs (excluding vaccines that are part of a routine immunization program), radiopharmaceuticals, disinfectants and medical devices.

Consideration was given to limiting the reporting requirements to a targeted subset of higher priority products. However, this option was viewed as undesirable, as such a requirement would likely mean missing important reporting opportunities and would be unnecessarily time-consuming given that hospitals would have to allocate resources to verify whether a product is reportable.

Required information

The proposed regulations specify the information (such as the name of the hospital and contact information, the name of the drug or device, a description of the reaction or incident) that must be included as part of an SADR and MDI report, with additional information to be provided if it is known by the reporting hospital.

The success of the SADR/MDI reporting system at Health Canada depends on the quality, completeness, and accuracy of the information submitted. In developing the proposal, Health Canada considered outlining the information to be reported in guidance rather than explicitly in regulations; however, it was thought that such an approach was unlikely to lead to the quality of reporting necessary to contribute to the level of safety monitoring envisioned under Vanessa's Law. Health Canada is therefore proposing that specific information be included in reports so that the quality of information received better supports the overall objective of therapeutic product safety monitoring.

Timelines for reporting

The proposed regulations specify that hospitals would be required to report SADRs and MDIs to Health Canada in writing and within 30 days of first documentation of the reaction or incident at the hospital. Health Canada is of the view that this interval would allow sufficient time for institutions to collect the required information and prepare high quality reports, while still providing the information to the Department in a useful time frame from a safety monitoring perspective.

Consideration was given to aligning the reporting time frame with the 15-day requirement that currently exists for drug manufacturers to report SADRs under the Food and Drug Regulations, or to extending the time frame beyond 30 days. In arriving at a 30-day timeline for hospitals, Health Canada considered the extra time likely required by hospitals to gather and validate information related to the observed reaction or incident, as well as to prepare the high-quality clinical documentation that supports product safety monitoring, while avoiding potential disruptions to the delivery of care. By contrast, manufacturers are responsible for submitting information that has already been compiled and made available to them by the primary source (e.g. health care professionals, patients). Taking these factors into consideration, Health Canada is of the view that the 15-day reporting time frame is reasonable when applied to manufacturers, and that applying a similar time frame would not properly weigh the unique operational challenges faced by hospitals, nor the work that hospitals may need to undertake to compile reports.

Benefits and costs

The full cost-benefit analysis (CBA) report is available upon request.

The CBA seeks to explain the qualitative and quantitative costs and benefits of the proposed regulations. A conservative approach to the costs and benefits has been taken whereby Health Canada is of the view that the benefits in this analysis are being understated and the costs are overstated. The data has been collected from costing surveys distributed to health care institutions, from technical discussions with institutions and patient safety experts, and from a literature review of studies conducted in Canada and internationally. All calculated costs and benefits have been calculated over a 10-year period, and the present value figures have been discounted by 7% as required by the Treasury Board Secretariat.footnote3

Cost-benefit statement

There are 597 hospitals in Canada (i.e. corporations and not individual facilities)footnote4 that are expected to be subject to the proposed reporting requirements. The projected costs, analyzed further below, include the cost of staff compiling and documenting SADRs and MDIs observed and institutions reporting them to Health Canada. The total cost to health care institutions is expected to be an average annualized cost of $32,772,531, which would translate to a present value cost of $228,362,977 over 10 years.

The anticipated benefits are based on the assumptions that the reports to Health Canada will improve the real world data associated with the use of therapeutic products, which in turn will generate better regulatory actions, such as label changes and/or risk communications, regarding these products. In general, prescription drugs are safe and represent overall savings to the total health care budget. For example, a United States Congressional Budget Office study from 2012 suggests that for every $1.00 spent on drugs, a savings of $1.12 on total health care spending is realized.footnote5 This does not include savings to the economy in terms of lost productivity avoided or the impact on life expectancy. Based on available data regarding rates of occurrence, Health Canada estimates that the total cost to Canadians of SADRs and MDIs is $14,946,930,098 per year, including costs to the health care system, lost wages, and deaths attributable to adverse reactions and incidents. Based on this cost, an anticipated reduction in SADRs and MDIs, as outlined below in the benefit section, is expected to generate annualized savings of $99,097,606, which would represent a present value benefit of $658,973,753 over the same 10-year period.

The proposed regulations would represent a net annualized benefit of $66,593,725 over 10 years and a net present value benefit of $430,610,777 over 10 years.

Table 1: Cost-benefit statement
  Stakeholder

Base Year

Year 1

Final Year

Year 10

Total (PV) Annualized Average
Benefits
Health care savings avoided, SADRs Payers $0 $837,236 $5,097,934 $711,651
Health care savings avoided, MDIs Payers $0 $68,155 $414,996 $57,932
Saved wages avoided, SADRs Patients $0 $76,325 $464,743 $64,876
Saved wages avoided, MDIs Patients $0 $7,703 $46,904 $6,548
Value of statistical life saved, ADRs Economic $0 $106,704,000 $649,720,880 $90,698,400
Value of statistical life saved, MDIs Economic $0 $8,892,000 $54,143,407 $7,558,200
Total benefits $0 $116,585,419 $658,973,753 $99,097,606
Costs
Salary costs in hospitals Hospitals $23,750,000 $23,750,000 $166,810,062 $23,750,000
Training Hospitals $597,000 $597,000 $4,193,078 $597,000
Standard operating procedure (SOP) revisions Hospitals $298,500   $278,972 $29,850
Cost of SADR reporting Hospitals $7,380,731 $7,380,731 $51,839,166 $7,380,731
Cost of MDI reporting Hospitals $746,300 $746,300 $5,241,699 $746,300
Total costs $32,772,531 $32,474,031 $228,362,977 $32,772,531
Net benefits $32,772,531 $84,111,388 $430,610,777 $66,593,725
Qualitative impacts

Benefits

Greater confidence in the safety of health products on market.

Costs

The reduced amount of time health care professionals spend providing care as a result of spending time reporting.

Determining the baseline

It is particularly difficult to establish a solid baseline for this analysis as the estimates for the number of SADRs and MDIs that occur annually in Canada vary widely. Patient safety experts point out that many ADRs and MDIs are never identified by health care professionals and patients, and many more are never reported.

Estimates on the number of SADRs that occur in Canada annually vary widely. Part of this is due to the fact that many experts estimate that only 1%–10% of all ADRs are ever reported. Estimates for the number of SADRs to be expected in Canada annually taken from a literature review of Canadian and international sources (and then scaled to the Canadian population) as well as from the technical discussions and survey responses, ranged from a low of 33 500 to a high of 7 230 938.footnote6,footnote7 A detailed study examining discharge records, based on data collected by the Canadian Institute for Health Information (CIHI), suggested that 63 592 emergency room visits were caused by SADRs, with a further 10 352 SADRs being experienced by patients already in hospital.footnote8 This would represent a total of 73 944 SADRs leading to either a prolongation of hospital stay, hospitalization, or at least a visit to an emergency department per year. This data estimate is supported by another detailed study conducted in Englandfootnote9 that, when scaled to the size of the Canadian population, would suggest that close to 60 000 hospital admissions per year would be attributable to SADRs.

Based on technical discussions hosted by Health Canada with patient safety experts and with representatives of health care institutions and health care professionals, the estimated number of SADRs to be reported in response to the proposed regulations ranges between 45 939 and 133 520 per year. Health Canada has based its cost-benefit analysis on the 73 944 annual report estimate, and has used the 45 939 and 133 520 estimates in its sensitivity analysis.

Similarly, there are a variety of estimates provided for the number of MDIs in Canada. Many MDIs are captured in the literature in broader terms, including critical incidents or medical errors, which makes estimating the number of MDIs occurring annually much more difficult. While the CIHI data suggests only 3 535 cases would be reported,footnote10 literature review and results from the technical discussions and surveys suggest that the CIHI data likely under reports the number of MDIs that occur in Canada annually, and suggests that an average of 7 463 would be reportable annually.footnote11 Data for MDIs is sparser than for SADRs, and does not allow for a high scenario to be developed. For the purpose of the CBA, the 7 463 figure will be used, with the lower CIHI number of 3 535 being used for the sensitivity analysis.

Health care costs associated with serious adverse drug reactions

While the distribution of SADRs between men and women is roughly equal (51.8% are found in men versus 48.2% in women), they are more common in seniors, generating an estimated 32% of all emergency department (ED) visits.footnote12 This is significant since the treatment of seniors in hospital emergency departments has been calculated to be more expensive than for non-seniors ($387 for seniors and $189 for non-seniors).footnote13 It is estimated that 9.1% of ED visits due to an SADR lead to a hospitalization that lasted 7.7 days on average.footnote14 The average cost per day in hospital has been estimated to be $911.12.footnote15 It has also been estimated that 14% of the reported SADRs occur in Canadians already admitted to hospital, prolonging their stay by 3.6 days on average at a cost of $911.12 per day.footnote16

Based on the three scenarios chosen to test, SADRs cost the Canadian health care system between $66,685,602 and $193,819,229 per year. Health Canada estimates that the most likely scenario would cost $107,337,995 per year.

Table 2: Annual costs associated with SADRs
  Likely Scenario Low Scenario High Scenario
Number of SADRs 73 944 45 939 133 520
Number of SADR ED visits 63 592 39 508 114 827
Number of senior SADR visits 20 349 12 642 36 745
Number of regular SADR visits 43 242 26 865 78 082
Cost per senior ED visit $387 $387 $387
Cost per regular ED visit $189 $189 $189
Number of hospitalizations from ED visits 5 787 3 595 10 449
Average length of stay in days 7.7 7.7 7.7
Cost per day $911 $911 $911
Number of SADRs occurring in hospital 10 352 6 431 18 693
Average stay extended in days 3.6 3.6 3.6
Cost per day $911 $911 $911
Total costs
Senior ED visits $24,610,042 $15,289,418 $44,438,127
Regular ED visits $8,174,121 $5,078,315 $14,759,934
Hospitalizations from ED visit $40,598,416 $25,222,474 $73,308,186
Hospitalization extensions $33,955,416 $21,095,395 $61,312,982
Total health care costs $107,337,995 $66,685,602 $193,819,229

In 2018 dollars

Health care costs associated with medical device incidents

Similarly, the underreporting of MDIs makes it difficult to assess the scope of the issue in Canada. With the likely scenario and the low scenario discussed below, and the assumption that the same percentage of MDIs lead to a visit to a hospital (both ED and hospitalization) or occur with patients already in a hospital, the total cost to the health care system would range between $4,138,824 and $8,737,788.

Table 3: Annual costs associated with MDIs
  Low Scenario Likely Scenario
Number of MDIs 3 535 7 463
Number of MDI ED visits 3 040 6 418
Cost per ED visit $189 $189
Number of hospitalizations from ED visits 277 584
Average length of stay in days 7.7 7.7
Cost per day $911 $911
Number of MDIs occurring in hospital 495 1 045
Average stay extended in days 3.6 3.6
Cost per day $911 $911
Total costs
Cost of ED visits $574,670 $1,213,229
Hospitalizations from ED visit $1,940,866 $4,097,506
Hospitalization extensions $1,623,288 $3,427,043
Total health care costs $4,138,824 $8,737,778

In 2018 dollars

Other costs associated with serious adverse drug reactions and medical device incidents

It is recognized that a certain number of deaths every year are attributable to SADRs and MDIs; however, it is somewhat challenging to estimate this number due to a limited amount of relevant data. One number widely used as an estimate of the number of deaths that occur in Canada each year related to SADRs is 10 000. Some Canadian studies have been conducted challenging this number with various results. One study, based on Ontario data and extrapolated to the rest of Canada, suggested that 1 824 deaths annually could be attributed to SADRs.footnote17 Another study estimated that the death rate was closer to 1 400, and a third study estimated that such reactions caused or contributed to 3 600 deaths annually.footnote18 International data is similarly scattered; however, there is sufficient support for the 1 824 deaths per year figure to use it as a low-end estimate.footnote19 A review of available literature does not provide clear data on the number of deaths per year attributable to MDIs, as many MDIs are included in a broader category of "medical incidents." One study suggests that it can be estimated that 150 deaths in Canada would be attributable to MDIs.footnote20

With the use of a constant estimate of 1 950 deaths per year (1 800 deaths from SADRs and 150 from MDIs) as the total, and the Treasury Board Secretariat approved value of statistical life (VSL) of $7.6 million ($6.11 million in 2004 dollars adjusted for inflation), the total VSL per year is over $14.8 billion.footnote21

Treatment of SADRs carries a further cost to the Canadian economy of lost productivity due to time spent either in the ED or from hospitalization or extended stay in the hospital. Since roughly half of the Canadian population is employed and the average hourly wage is $25.97 in current dollars,footnote22 it can be estimated that between $6 million and $17 million in wages are lost per year. While many Canadians do have insurance to cover these losses, the lost wages could be used as an imperfect proxy for lost productivity.

Table 4: Lost wages due to SADRs annually
  Likely Scenario Low Scenario High Scenario
Number of SADRs 73 944 45 939 133 520
Number of SADR ED visits 63 592 39 508 114 827
Average time of ED visit in hours 2.2 2.2 2.2
Lost wages $1,816,628 $1,128,612 $3,280,269
Number of hospitalizations from ED visits 5 787 3 595 10 449
Average length of stay in days 7.7 7.7 7.7
Lost wages $4,339,359 $2,695,902 $7,835,541
Number of SADRs occurring in hospital 10 352 6 431 18 693
Average stay extended in days 3.6 3.6 3.6
Lost wages $3,629,322 $2,254,780 $6,553,434
Total lost wages costs $9,785,309 $6,079,294 $17,669,243

In 2018 dollars

Similarly calculated for MDI, the losses would be between $467,801 and $987,609.

Table 5: Lost wages due to MDIs annually
  Low Scenario Likely Scenario
Number of MDIs 3 535 7 463
Number of MDI ED visits 3 040 6 418
Average time of ED visit in hours 2.2 2.2
Lost wages $86,847 $183,348
Number of hospitalizations from ED visits 277 584
Average length of stay in days 7.7 7.7
Lost wages $207,449 $437,962
Number of MDIs occurring in hospital 495 1 045
Average stay extended in days 3.6 3.6
Lost wages $173,505 $366,299
Total lost wages $467,801 $987,609

In 2018 dollars

The total scope of the costs that SADRs and MDIs represent to Canada is estimated as falling between $14.9 billion and $15 billion per year in 2018 dollars.

Table 6: Total costs of SADRs and MDIs to Canada
  Likely Scenario Low Scenario High Scenario
Number of SADRs 73 944 45 939 133 520
Total health care cost $107,337,995 $66,685,602 $193,819,229
Total lost wages cost $9,785,309 $6,079,294 $17,669,243
VSL of deaths due to SADRs $13,680,000,000 $13,680,000,000 $13,680,000,000
Total cost of SADR $13,797,197,248 $13,752,810,835 $13,891,621,992
Number of MDIs 7 463 3 535 7 463
Total health care cost $8,737,778 $4,138,824 $8,737,778
Total lost wages cost $987,609 $467,801 $987,609
VSL of deaths due to MDIs $1,140,000,000 $1,140,000,000 $1,140,000,000
Total cost of MDIs $1,149,732,850 $1,144,610,160 $1,149,732,850
Total costs to Canada $14,946,930,098 $14,897,420,995 $15,041,354,841

In 2018 dollars

Costs of the regulatory proposal

The regulatory proposal places the responsibility of reporting on hospitals. Although there are over 1 200 individual facilities that would fit the definition proposed in the regulations, data from the CIHI indicates that there are 597 hospital corporations operating in Canada.footnote23 The proposed regulations would apply to these organizations and it is assumed there may be efficiencies of scale gained as standard operating procedures (SOPs) and education modules could be shared within these organizations. Further efficiencies could likely be gained if provinces and territories centralized functions for reporting, but that has been left outside of the scope of this analysis. While the proposed regulations apply to 597 hospitals, the activity of reporting is shared with health care professionals, as it is the front-line staff who would likely be involved in collecting and validating the information to be included in a report to Health Canada. Costs associated with health care professional activities have therefore been included in this analysis.

Through the technical discussions and from the survey responses received by Health Canada, hospitals have identified that the greatest costs of the proposed regulations are expected to come from the addition or transfer of staff to handle the reporting to Health Canada. It is anticipated that a small hospital (fewer than 100 beds) would need to hire or reallocate 0.25 full-time equivalents (FTEs), representing a salary of $40,000 per year, while a large teaching hospital (more than 300 beds) would require 1.5 FTEs, representing a salary cost of $150,000 per year. Based on this data, Health Canada estimates that the cost in salary dollars would be $23,750,000 per year.

Table 7: Anticipated salary costs to hospitals
Size of Hospital Number of Beds Number of Hospitals FTE Rate Additional Annual Salary
Small <100 414 0.25 $80,000 $8,280,000
Medium <300 112 0.75 $80,000 $6,720,000
Large >300 38 1 $100,000 $3,800,000
Large teaching hospital >300 33 1.5 $100,000 $4,950,000
Total salary (in dollars) $23,750,000

In 2018 dollars

In addition, institutions indicated that annual training would be required for front-line staff at a cost of $1,000 per year, as well as a cost of updating existing standard operating procedures at a cost of $500 per institution.

Since it is front-line staff that would likely be involved in collecting and validating the information to be reported to Health Canada, these activities have been factored into the total cost to institutions. The survey responses and technical discussions suggested that the cost per SADR or MDI report is $100. The cost of reporting is directly related to the total number of reports made. This cost may be brought lower should an electronic reporting system that facilitates the transfer of information to Health Canada be developed.

Table 8: Cost of SADR reporting by hospitals
Hospital Size Number of Hospitals Cost/Report Likely Scenario Low Scenario High Scenario
Average Number of SADRs per Hospital Reporting Cost Average Number of SADRs per Hospital Reporting Cost Average Number of SADRs per Hospital Reporting Cost
Small 414 $100 18 $733,018 11 $455,400 30 $1,242,000
Medium 112 $100 165 $1,848,000 103 $1,153,600 300 $3,360,000
Large 38 $100 546 $2,074,800 340 $1,292,000 1 000 $3,800,000
Large teaching hospital 33 $100 826 $2,724,913 513 $1,692,900 1 500 $4,950,000
Total cost 597   73 944 $7,380,731 45 939 $4,593,900 133 520 $13,352,000

In 2018 dollars

The cost of reportable SADRs is expected to range between $4,593,900 and $13,352,000 and the cost of reportable MDIs is expected to range between $353,500 and $746,300 per year.

Table 9: Cost of MDI reporting by hospitals
Number of Hospitals Cost/Report Low Scenario Likely Scenario
Number of MDIs Reporting Cost Number of MDIs Reporting Cost
All hospitals 597 $100 3 535 $353,500 7 463 $746,300

In 2018 dollars

Total costs to the health care system calculated on the most likely scenario would be $32,772,531 in the first year, with an annual cost of $32,474,031 each year after (assuming a constant rate of reporting), with a present value cost of $228,362,977 over 10 years.

Table 10: Total cost to health care system — Likely scenario
  Year 1 Years 2 to 10 Annualized Average Present Value Costs
Salary $23,750,000 $23,750,000 $23,750,000 $166,810,062
Training $597,000 $597,000 $597,000 $4,193,078
SOP $298,500 $0 $29,850 $278,972
SADR reporting $7,380,731 $7,380,731 $7,380,731 $51,839,166
MDI reporting $746,300 $746,300 $746,300 $5,241,699
Total cost $32,772,531 $32,474,031 $32,503,881 $228,362,977

Discounted at 7%

Health care professionals and representatives of hospitals also identified a qualitative cost for the proposed regulations. Without additional funds to hospitals, the FTEs required to administer the proposed regulatory requirements would need to come from reassigned personnel, which could reduce time spent on patient care. It can be argued that some of these costs would be recouped as a result of fewer patients being treated for SADRs and MDIs in the health care system.

Health Canada has a well-established system for receiving and analyzing SADR and MDI reports as part of the Department's broader therapeutic product monitoring process. While Health Canada anticipates an increase in the number of reports received by the Department as a result of this proposal, work is being undertaken to modernize and improve the efficiency of its systems and processes to ensure that the Department is well positioned to receive and analyze this additional information.

Benefits of the proposed regulations

A literature review, as well as technical discussions held by Health Canada with patient safety experts, allows a benefit model to be created by making some critical assumptions. First, it is assumed that health care professionals will document SADRs and MDIs observed at hospitals so that hospitals can report these in accordance with the proposed regulations. Second, it is assumed that the hospital reports will contribute to an improved ability for Health Canada to assess the real world safety of drugs and medical devices and to take corrective regulatory action as necessary. Third, it is assumed that health care professionals will use the outcomes of departmental actions (e.g. risk communications, label changes) to adjust prescribing behaviour and thereby reduce the number of SADRs and MDIs occurring in Canada each year. The calculation of benefits is complicated by the fact that there is no international consensus on the percentage of adverse drug reactions, including SADRs, that would be considered avoidable. Based on Health Canada's review of the available literature, a conservative estimate of 13% of SADRs and MDIs are considered to be avoidable through risk mitigation measures. It is plausible that the percentage of avoidable SADRs and MDIs could be higher, but sufficient data to support such an assertion is not currently available.

Studies conducted to date have had mixed results when assessing how risk communications and label changes affect the behaviour of health care professionals. While physicians prescribe drugs for patients, both nurses and pharmacists play a role in preventing SADRs and MDIs.

A study conducted in the United States suggests that as a group, when a major health risk has been communicated by the United States Food and Drug Administration (U.S. FDA), a 30%–84% change in the use of the product targeted has occurred, either due to a change in treatment behaviour by a physician or due to the intervention of a pharmacist or other health care professional. footnote 24 Given that not all regulatory action taken by Health Canada with respect to SADRs will garner the high attention associated with a major health risk communication, the Department has used the lower bound of 30% change in behaviour around the use of products most likely to trigger an SADR or a reportable MDI for its calculations. A 30% reduction in the 13%, or 4.3% total reduction, of SADRs and MDIs would still represent significant savings to Canada.

However, other experts have suggested that this model only works for high profile warnings and issues related to SADRs and MDIs, and that such savings would unlikely be realized. Assuming that only one in five of these potential savings are realized as a result of the proposed regulations, the overall savings would still remain significant.

Table 11: Adjusted potential monetized benefits
  Likely Scenario — Costs Savings at 4.3% Reduction
(30% of 13%)
Expected Savings
(20% of 4.3%)
Number of SADRs 73 944 9 613 1 923
Total health care $107,337,995 $4,186,182 $837,236
Total lost wages $9,785,309 $381,627 $76,325
VSL of deaths due to SADRs $13,680,000,000 $533,520,000 $106,704,000
Totals $13,797,197,248 $538,090,693 $107,617,561
Number of MDIs 7 463 970 194
Total health care $8,737,777 $340,773 $68,155
Total lost wages $987,609 $38,517 $7,703
VSL of deaths due to MDIs $1,140,000,000 $44,460,000 $8,892,000
Totals $1,149,732,849 $44,839,581 $8,967,858
Totals $14,946,930,097 $582,930,274 $116,585,419

In 2018 dollars

Using this model, the anticipated annual benefit is calculated to be $116,585,419 in terms of deaths avoided, health care savings from SADRs and MDIs avoided, and avoided loss of wages. Assuming that no benefits are realized in year 1 as reports are received, and conservatively that year 2 benefits are only 50% of subsequent years as Health Canada analyzes reports to generate or validate safety signals, the average anticipated benefit would be expected to be $99,097,606 per year over the 10-year period of analysis.

Table 12: Total potential monetized benefits
  Year 1 Year 2 Years 3 to 10 Average PV
Deaths avoided, SADRs $0 $53,352,000 $106,704,000 $96,033,600 $649,720,880
Deaths avoided, MDIs $0 $4,446,000 $8,892,000 $8,002,800 $54,143,407
Health care savings, SADRs $0 $418,618 $837,236 $753,513 $5,097,934
Health care savings, MDIs $0 $34,078 $68,155 $61,340 $414,996
Saved wages, SADRs $0 $38,163 $76,325 $68,693 $464,743
Saved wages, MDIs $0 $3,852 $7,703 $6,933 $46,904
Total savings $0 $58,292,710 $116,585,419 $99,097,606 $658,973,753

In 2018 dollars

Net benefits of the proposed regulations

Over the 10 years of analysis, the average annual benefits are estimated to be $99,097,606 while the average annual costs are $32,503,881. This creates a net average annual benefit of $66,593,725. In present value terms, this represents a net benefit of $430,610,777.

Table 13: Net benefits
Benefits Annual Average PV (7%)
Deaths avoided, SADRs $90,698,400 $603,121,177
Deaths avoided, MDIs $7,558,200 $50,260,098
Health care savings, SADRs $711,651 $4,732,297
Health care savings, MDIs $57,932 $385,231
Saved wages, SADRs $64,876 $431,410
Saved wages, MDIs $6,548 $43,540
Total savings $99,097,606 $658,973,753
Costs
Salary -$23,750,000 -$166,810,062
Training -$597,000 -$4,193,078
SOP -$29,850 -$278,972
SADRs reporting -$7,380,731 -$51,839,166
MDIs reporting -$746,300 -$5,241,699
Total cost -$32,503,881 -$228,362,977
Net annual benefit $66,593,725  
Net present value $430,610,777

"One-for-One" Rule

The purpose of the "One-for-One" Rule is to strictly control new administrative burden on business resulting from regulations. Since hospitals regulated through provincial legislation, as well as those owned or operated by the Government of Canada, are not considered businesses, the Rule does not apply in the context of the proposed regulations.

Small business lens

The small business lens applies to any regulatory proposals that impact small business and have a nationwide cost impact of over $1 million annually. The Treasury Board Secretariat defines a small business as any business, including its affiliates, that has fewer than 100 employees or between $30,000 and $5 million in annual gross revenues.

The proposed regulations are not expected to affect small businesses, since the proposal only applies to those hospitals regulated through provincial legislation, as well as those operated by the Government of Canada.

Consultation

In developing the proposed regulations, Health Canada has sought input since early 2015 from health care institutions, health care professionals, advocacy groups, provinces and territories, other stakeholders, and the public on the issue of mandatory reporting by health care institutions.

As part of these activities, an issue identification paper was published in April 2016 to solicit early views on the issue of mandatory reporting. Based on feedback received through the issue paper, Health Canada prepared a consultation paper entitled Toward Mandatory Reporting of Serious Adverse Drug Reactions and Medical Device Incidents by Health Care Institutions. The purpose of the consultation paper was to describe various policy options under consideration by the Department and to seek advice on the parameters of the regulatory proposal. The paper was provided to a broad range of health care stakeholders, and was published online for 45 days, between June 28, 2017, and August 11, 2017.

As a follow-up to these consultation activities, and to support the cost-benefit analysis process, additional technical discussions were held in December 2017 and January 2018. These technical discussions involved a representative sampling of key hospital staff (e.g. chiefs of staff, heads of pharmacy, officials responsible for records and IT) across a range of hospitals, and health and safety and advocacy groups, with the goal of gathering front-line views on the likely impact of mandatory reporting on the day-to-day work within a hospital setting. The technical discussions also provided a venue to discuss and validate evolving policy considerations with stakeholders.

Generally, responses to the consultation paper and through the technical discussions have been mixed within individual stakeholder groups. While these results have not allowed for clear trends in stakeholder group perspectives to be categorized, overall consultation participants have generally agreed with the issue, objective, and key principles of the proposal for mandatory reporting of SADRs and MDIs by hospitals.

Applicable health care institutions

The consultation paper proposed that reporting requirements apply only to hospitals that provide acute care services, but some stakeholders were confused about how "acute care services" would be interpreted. While there was strong support among health care institutions and health care professionals for Health Canada's proposal, approximately a third of respondents from across stakeholder groups recommended broadening the scope of health care institutions to improve information acquisition. In light of this feedback, Health Canada has expanded the scope of the proposed regulations to require reporting from all hospitals.

Types of reportable reactions and incidents

The consultation paper proposed that ADR reporting be limited to reactions that are both serious and unexpected, while MDI reporting would encompass all serious incidents. The proposal to require only the reporting of serious and unexpected ADRs was meant to focus on reactions and incidents that are the highest priority targets for product safety monitoring. The mandatory reporting of all serious adverse drug reactions was considered at the time to have the potential to impact hospital operations in a more significant way, and was therefore thought to be a less attractive option.

Through responses to the consultation paper, there was strong support across stakeholder groups for limiting reporting to serious and unexpected ADRs, although approximately a third of stakeholders supported broadening mandatory reporting to encompass all SADRs. Results from the technical discussions with front-line experts suggested further support for broadening the reporting requirement to all SADRs. Stakeholders that supported expanding the scope in this way suggested that such an approach could increase the amount of information available to identify potential safety risks, as well as simplify the process of determining whether an SADR or MDI is reportable. In light of these views, Health Canada has expanded the scope of reporting in the proposed regulations to include all SADRs and MDIs for the prescribed therapeutic products.

Stakeholders also expressed some concern about needing to establish causality between a certain therapeutic product and an adverse reaction or incident. Health Canada will ensure that guidance, education and outreach conveys to hospitals and health care professionals that the information to be submitted by the hospital to Health Canada only has to represent the suspicions of the documenting health care professional that an SADR or MDI has been observed. There would be no need to perform a causality assessment to determine whether a therapeutic product caused the SADR or MDI in order to send an SADR or MDI report to Health Canada. This approach regarding establishing associations is in line with international best practices for ADR reporting.

Types of therapeutic products

The consultation paper proposed to limit the scope of the mandatory reporting requirements to information about pharmaceuticals (prescription and non-prescription), biologic drugs (excluding vaccines), radiopharmaceuticals, disinfectants and medical devices. Certain therapeutic products were proposed to be excluded from the proposed mandatory reporting requirements, as these products are already subject to reporting requirements either by health facilities or health care professionals under other regulatory frameworks.

There was notable support for this position; nevertheless, many respondents suggested that the scope should be broader and extended to include natural health products (NHPs) and/or vaccines. However, natural health products cannot be included within the scope of this regulatory proposal, as a "therapeutic product" was defined under Vanessa's Law to be "a drug or device or any combination of drugs and devices, but does not include a natural health product within the meaning of the Natural Health Products Regulations." Health Canada continues to encourage health care institutions, practitioners and consumers to voluntarily report issues involving natural health products.

With respect to vaccines, most provincial and territorial jurisdictions have mandatory reporting regimes in place for health professionals to report adverse reactions following immunization. There are also established provincial and federal networks to monitor immunization program vaccine safety. Health Canada considered the potential for duplication and unnecessary burden on hospitals, and proposes that vaccines administered under a routine immunization program of a province or territory be exempted from the reporting requirement.

Required information

There was significant support for Health Canada's proposal to require a minimum amount of information, as well as prescribed additional information to be provided if in a hospital's control.

As a result, the minimum amount of required information to report an SADR would be the name of the hospital and contact information of a representative of that hospital; the drug's brand name, proper name or common name; in the case of a drug imported under Division 10 of the Regulations (Access to Drugs in Exceptional Circumstances), the identification number or code of the drug, if any is assigned in the country in which the drug was authorized for sale; the patient's age and sex; and a description of the SADR.

In addition, if the following information is in a hospital's control, it would also be reported to Health Canada: the drug identification number assigned for the drug, if applicable; the date on which the patient first used the drug and, if applicable, the date on which the patient stopped using the drug; the date on which the SADR first occurred and, if applicable, the date on which the patient's health was restored; any health conditions of the patient that directly relates to the SADR; any concomitant therapeutic products used by the patient; and the result of the SADR on the patient's health.

The minimum amount of required information to report an MDI would be the name of the hospital and the contact information of a representative of that hospital; the name of the device and its identifier; the name of the manufacturer of the device; and a description of the MDI. In addition, if the following information is in a hospital's control, it would also be reported: the lot number of the device or its serial number; any contributing factors of the MDI, including any health condition of the patient that directly relates to the MDI; and the result of the MDI on the patient's health.

Timelines for reporting

There was significant support for Health Canada's proposal for a 30-day reporting time frame. Some drug and medical device industry respondents commented that reporting timelines for institutions should align with the 15-day reporting timelines that exist now for drug manufacturers under the Food and Drug Regulations. Health Canada is of the view that such a timeline would represent an unnecessary burden given the operating conditions of many hospitals. The proposed 30-day time frame strikes a balance between timeliness and operational viability.

Rationale

The proposed regulations are necessary to give effect to section 21.8 of the Food and Drugs Act so that important information from hospitals concerning SADRs and MDIs is available to Health Canada in support of the Department's therapeutic product safety monitoring. In the absence of these proposed regulations, SADRs and MDIs in hospitals will likely go unreported, potentially compromising public health and patient safety. Mandatory reporting by hospitals will contribute to the overall knowledge base on potential safety issues, and will assist Health Canada in providing health care providers and patients with better, up-to-date information on product safety. Through a conservative cost-benefit analysis based on available domestic and international information, Health Canada has calculated that over a 10-year period, the average annual benefits are estimated to be over $99 million while the average annual costs are expected to be approximately $32.5 million. This creates a net average annual benefit of approximately $66.5 million. In present value terms, this represents a net benefit of $430.6 million. Therefore, Health Canada is of the view that the costs of reporting SADRs and MDIs are outweighed by the benefits of the regulatory proposal.

In drafting the regulatory proposal, Health Canada has also worked to minimize operational impacts on hospitals, in accordance with subsection 30(1.3) of the Food and Drugs Act:

Before recommending to the Governor in Council that a regulation be made . . . , the Minister shall take into account existing information management systems, with a view to not recommending the making of regulations that would impose unnecessary administrative burdens.

As detailed in the sections above, Health Canada has applied this lens in considering each of the factors being framed by this proposal (i.e. applicable health care institutions, types of reportable reactions and incidents, types of therapeutic products, and required information).

The proposed regulations also reflect the outcome of consultation with affected health care institutions, health care professionals, and patient safety experts on the issue of not imposing an unnecessary burden on the health care system.

Implementation, enforcement and service standards

Implementation

Under the proposed regulations, hospitals that are regulated through provincial/territorial legislation and those operated by the federal government have the responsibility to provide reports of SADRs and MDIs to Health Canada. To provide hospitals with time to adjust to the regulations, Health Canada is proposing a delayed coming into force as part of implementation. The proposed regulations would come into force six months after the day on which they are published in the Canada Gazette, Part II.

As part of the implementation plan associated with mandatory reporting of SADRs and MDIs, Health Canada would provide guidance, outreach, and education to all hospitals and health care professionals working within hospitals responsible for reporting. Guidance documents, written in plain language, would assist by outlining the type of information that should be submitted and the different methods available for submitting reports. Health Canada is working to develop and implement an educational approach and the content needed to support health care professionals in the identification of SADRs and MDIs and in understanding the importance of documenting complete information related to their observations. Health Canada will also be exploring mechanisms to provide ongoing feedback to hospital reporters about what is done with reports after they are received.

Hospitals would be able to use the current methods for reporting SADRs/MDIs established under the existing process and system for receiving voluntary reports. Reporting forms are available online, and information can be submitted by fax, email or through a web-based mechanism. Health Canada is also seeking to identify opportunities to facilitate system-to-system transfer of information to minimize the impact on reporting institutions.

Once the reports are received by Health Canada, the Department would perform an initial review of their quality and completeness, the reports would then be processed and further analyzed by scientific staff. Reports would be analyzed to identify potential therapeutic product safety problems or signals. A signal is considered to be the preliminary indication of a product-related issue, and it triggers further investigation to confirm or to disprove a potential association between the product and the reported event. As SADR and MDI reports represent one source of information about possible safety problems with a therapeutic product, they would be used in conjunction with information received by Health Canada from other sources (e.g. information from industry and foreign regulatory agencies, medical literature) as part of Health Canada's post-market safety assessment work. Should a safety concern be identified as a result of product monitoring, Health Canada could take several possible actions, including continued monitoring, issuing risk communications, requiring label changes, or ordering a recall if the Minister believes that a therapeutic product presents a serious or imminent risk of injury to human health.

Enforcement

The Food and Drugs Act allows for a range of enforcement actions to be taken. Building on the activities outlined above, additional compliance and enforcement measures could be taken by the Department in accordance with the risk-based approach detailed in Health Canada's Compliance and Enforcement Policy (POL-0001). Health Canada's primary objective in circumstances of non-compliance is to manage the risk to Canadians and to use the most appropriate level of intervention to ensure that a regulated party brings their activities into compliance.

For the purposes of compliance monitoring, Health Canada would implement an oversight mechanism to verify that the reports being received are complete and provide information of sufficient quality to meet the requirements of the proposed regulations. Should issues with reporting quality be identified, Health Canada would work with hospitals to help improve quality and completeness, address any issues that may lead to situations of future non-compliance and bring parties into compliance.

In the event that Health Canada identifies instances of more persistent non-compliance, the Department intends to take a staged approach to working with hospitals to resolve such matters. To start, discussions with the hospital or hospitals would be used to understand the circumstances that led to a situation of non-compliance. Health Canada would then assess these factors and work with regulated parties to identify appropriate follow-up action, such as improving Health Canada guidance, enhancing education and outreach activities, or providing support to hospitals in the development of internal policies and procedures around reporting.

In the unlikely event that a situation of non-compliance is not resolved through this cooperative, staged approach, Health Canada could potentially use provisions of the Food and Drugs Act and its associated regulations, for example seeking an injunction under section 21.5 of the Act to compel a hospital to comply with the regulations. In determining the appropriateness of exercising enforcement measures, the Department would take into consideration whether the non-compliance of a hospital is shown to pose a serious health risk to Canadians, as well as other factors outlined in POL-0001.

Performance measurement and evaluation

Health Canada will implement the program evaluation requirements of the Treasury Board Policy on Results with respect to certain elements of this proposal (e.g. improved quantity and quality of reports) by incorporating relevant performance measurements for internal monitoring and data collection.

Contact

Bruno Rodrigue
Policy, Planning and International Affairs Directorate
Health Products and Food Branch
Health Canada
Holland Cross, Tower A, Ground Floor, Suite 14
11 Holland Avenue
Ottawa, Ontario
K1A 0K9
Address locator: 3000A
Email: LRM_MLR_consultations@hc-sc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to section 30 footnote a of the Food and Drugs Act footnote b, proposes to make the annexed Regulations Amending the Food and Drug Regulations (Serious Adverse Drug Reaction Reporting — Hospitals).

Interested persons may make representations concerning the proposed Regulations within 75 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Bruno Rodrigue, Office of Legislative and Regulatory Modernization, Policy, Planning and International Affairs Directorate, Health Products and Food Branch, Department of Health, Holland Cross, Tower A, Ground Floor, Suite 14, 11 Holland Avenue, Address Locator: 3000A, Ottawa, Ontario K1A 0K9 (email: LRM_MLR_consultations@hc-sc.gc.ca).

Ottawa, June 7, 2018

Jurica Čapkun
Assistant Clerk of the Privy Council

Regulations Amending the Food and Drug Regulations (Serious Adverse Drug Reaction Reporting — Hospitals)

Amendments

1 The heading before section C.01.017 of the Food and Drug Regulationsfootnote 25 is replaced by the following:

Serious Adverse Drug Reaction Reporting — Manufacturers

2 The Regulations are amended by adding the following after section C.01.020:

Provision of Information Under Section 21.8 of the Act

C.01.020.1 (1) For the purposes of section 21.8 of the Act, hospitals are the prescribed health care institutions that shall provide information that is in their control to the Minister about a serious adverse drug reaction.

(2) The following prescribed information about a serious adverse drug reaction that is in a hospital's control shall be provided to the Minister in writing within 30 days after the day on which the serious adverse drug reaction is first documented within the hospital:

(3) A hospital is exempt from section 21.8 of the Act in respect of the reporting of information referred to in subsection (2) that is in its control about a serious adverse drug reaction if

(4) In this section, hospital means a facility

3 Section C.10.004 of the Regulations is repealed.

Coming into Force

4 These Regulations come into force on the day that, in the sixth month after the month in which they are published in the Canada Gazette, Part II, has the same calendar number as the day on which they are published or, if that sixth month has no day with that number, the last day of that sixth month.