On November 6, 2014, the Protecting Canadians from Unsafe Drugs Act (Vanessa's Law) received royal assent andbecame law in Canada.  This new legislation is intended to further protect Canadians from the risks related to drugs and medical devices by substantially increasing Health Canada's pre and post-market powers over industry stakeholders, and radically changing the consequences for violating the Food and Drugs Act and its regulations.  Vanessa's Law introduces the most significant amendments to the Food and Drugs Act in 50 years, and represents a new chapter in Canadian drug and medical device regulatory enforcement.

The new powers granted to Health Canada include:

  • The power to order any person to provide information related to a drug or medical device where Health Canada believes that the product may present a serious risk of injury to human health;
  • The power to order a manufacturer to conduct an assessment of a drug or medical device and to provide Health Canada with the results;
  • The power to order a manufacturer to conduct additional tests or studies, or monitor experience, in relation to a drug or medical device for the purpose of obtaining additional information about the product's effects on health or safety, and to provide Health Canada with the results;
  • The power to order a manufacturer to modify the label of a drug or medical device or to replace its packaging, where Health Canada believes that doing so is necessary to prevent injury to health; and
  • The power to order any person who sells a drug or medical device to recall the product where Health Canada believes that a drug presents a serious risk of injury to health.

The Minister of Health also has the power to make new regulations:

  • Requiring the holders of drug clinical trial authorizations or medical device investigational testing authorizations to disclose safety information about the product to Health Canada when the study is completed or discontinued, and to make the results of clinical studies public within a prescribed period of time; and
  • Requiring manufacturers to provide Health Canada with information they receive or become aware of regarding serious risks related to a drug or medical device that have been communicated outside of Canada (beyond what is currently required under the regulations), changes to a drug's or medical device's labelling that have taken place outside of Canada, and reassessments, suspensions or revocations of a drug's or medical device's market authorizations outside of Canada.

Note that Health Canada's power to order a person to provide information about a drug or medical device under these new provisions includes the power to compel the production of confidential business information.  Vanessa's Law also expressly authorizes Health Canada to disclose such confidential business information without notice in the following circumstances:

  • To any person, if Health Canada believes that the drug or medical device presents a serious risk of injury to human health; or
  • To a government, a person from whom Health Canada seeks advice, or a person who carries out functions relating to the protection or promotion of human health, if the disclosure by Health Canada is related to the protection or promotion of human health or the safety of the public.

Vanessa's Law also requires Health Canada to ensure that an order against a stakeholder under any of these new legislative powers is made publically available.

The amendments to the Food and Drugs Act contained in Vanessa's Law also include a number of miscellaneous, but equally significant, new provisions, such as:

  • The mandatory reporting of serious adverse drug reactions and medical device incidents by prescribed health care institutions;
  • Making it an offence to knowingly make a false or misleading statement to Health Canada, or knowingly providing false or misleading information to Health Canada in relation to a drug or medical device;
  • Amending the definition of "device" to exclude combination products where the medical purpose is achieved solely by pharmacological, immunological or metabolic means or by chemical means in or on the body.

To complement all of the new powers granted to Health Canada, Vanessa's Law drastically increases the consequences of non-compliance with the Food and Drugs Act and its regulations.  More specifically:

  • The maximum monetary penalty for a violation of the Food and Drugs Act or its regulations in relation to drugs and medical devices has been increased from $5,000 to $5,000,000 per day upon conviction,; the same penalty applies for violations of an order to provide information, modify a label or conduct a recall in respect of a drug or medical device. Monetary penalties are  and to an unlimited, amount at the discretion of the court, where the violation involved false or misleading statements to Health Canada or a person knowingly or recklessly caused a serious risk of injury to human health; and
  • Corporate officers, directors, agents and mandataries who direct, authorize, assent to, participate in or other otherwise acquiesce in the commission of thean offence relating to drugs or medical devices are now individually liable and subject to the same punishment upon the conviction of the company, even if the person is not prosecuted for the offence.

To balance the substantial increase in potential punishment, the new legislation introduces due diligence as a defence to a prosecution under the Food and Drugs Act.  In other words, if an offence is committed, sufficient evidence of the exercise of due diligence may excuse liability (except where, in relation to a drug or medical device, a person made a false or misleading statement or knowingly or recklessly caused a serious risk of injury). 

The new powers to be granted to Health Canada and the substantial new sanctions in Vanessa's Law are squarely aimed at drug and medical device companies.  How Health Canada will wield these new powers remains to be seen, but the fact remains that a violation of the Food and Drugs Act or its regulations may now have immense consequences, bringing the enforcement framework in Canada more in line with the United States and other advanced jurisdictions. 

In this context, the importance of the statutory due diligence defence in Bill C-17 cannot be overlooked.  Drug and medical device companies are well advised to audit their current compliance programs to identify and address any exposure to regulatory liability.  Among other things:

  • Written policies should be updated or put in place addressing all activities regulated by the Food and Drugs Act and its regulations, including GMP, advertising and promotion, sales and distribution, and post-market surveillance and reporting;
  • A compliance training program for company employees should be implemented and properly documented; and
  • To the extent not in place, a responsible person (e.g. Compliance Officer) should be appointed to manage the company's compliance activities, including ongoing monitoring and detection, compliance audits, internal investigations and corrective actions. 

Although a properly implemented and documented compliance program cannot alone prevent a violation of the Food and Drugs Act or its regulations, it reflects a responsible approach to compliance and can be used as evidence of the exercise of due diligence in the event that a violation occurs. 

The new powers granted to Health Canada in Vanessa's Law, and the regulations that will follow, reflect a significant change in the drug and medical device regulatory landscape in Canada.  These powers are backed by tough new enforcement provisions.  Drug and medical device companies cannot ignore this development, and should take immediate steps to assess their state of compliance.