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Health Economics & Priority Setting
Informing Policy

One quarter of prescription drugs in Canada may be in short supply

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Research led by Drs. Wei Zhang and Aslam Anis sheds new light on the factors behind drug shortages in Canada, a common problem across the country.

In 2018 alone, Canadian patients faced shortages for hundreds of medications, including EpiPens, opioid drugs, and treatments for Parkinson’s disease, schizophrenia, and depression.

In many cases, these shortages can have severe and life-threatening consequences. While there are several studies from the U.S. about this topic, there have been very few investigations about drug shortages in Canada, mostly due to lack of reliable data.

To understand drug shortages in the Canadian context, Drs. Zhang and Anis, along with CHÉOS Scientist Dr. Larry Lynd, and senior statisticians Daphne Guh and Dr. Huiying Sun, analyzed prescription drug data from the Canadian Drug Shortage Database.

Dr. Wei Zhang

“Since early 2017, Canadian drug manufacturers are required to report drug shortages and state the reason they are unable to meet demand for the drug,” explained Dr. Zhang, the study’s first author and Program Head for Health Economics at CHÉOS. “We looked at the first year and a half of data from this database to describe the factors associated with drug shortages.”

The researchers found that of the over nine thousand different drugs marketed in Canada, one quarter were reported in shortage during the study period. The average length of a shortage was 5 months.

The researchers also grouped the drugs with the same ingredients, dosage, type, and strength into a “market”. The drugs under the same market were considered as interchangeable. This allowed them to look at shortages at the market level, rather than at the level of individual manufacturer. There was a total of 3,470 distinct markets; of these, 13 per cent were reported as having a shortage.

Related to the reasons behind these shortages, the team found several factors that could be at play.
“Our main finding was that markets with a single generic manufacturer were the most vulnerable to shortage,” said Dr. Zhang. “We did not see the same result with single branded manufacturers.”
This result suggests that shortage could be related to the low profit margins for generic drugs compared to branded drugs.

Dr. Aslam Anis

“One of the reasons behind this finding could be related to the lower reimbursement price for generic drugs based on the pan-Canadian tiered pricing framework and provincial price-cap policies” explained Dr. Anis, study co-lead and Director of CHÉOS.

The team also found that markets with a larger proportion of their drugs covered under provincial formularies were more likely to be in shortage. Other factors related to shortages included complex manufacturing processes and certain types of therapies.

“This study gives Canadian policy makers who are trying to balance cost with drug supply security a number of red flags to look out for in order to avoid drug shortages,” said Dr. Zhang.

The research, published in CMAJ Open, was supported by a Project Grant from the Canadian Institutes of Health Research and includes co-authors from the University of Calgary and the University of Toronto.

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