Cost recovery by Health Canada and drug safety: a time-series analysis

In 1995, Health Canada started collecting fees from pharmaceutical companies for various drug regulatory activities. This study investigated whether this change in the source of revenue affected the postmarket safety of drugs.

A list of all new active substances approved in the 5 years before (1990-1994) and after (1995-1999) the introduction of cost recovery was compiled. Drug safety warnings and market withdrawals due to safety reasons were identified from the Health Canada Web site and other sources. Information about total funding for Health Canada's drug regulatory program came from a report by KPMG, a global professional service company providing financial audit, tax and advisory services. Time-series analyses and Kaplan-Meier curves were used to determine whether cost recovery affected postmarket safety.

The introduction of cost recovery made no difference in the proportion of new active substances that received a safety warning, the number of safety warnings per new active substance or the time until the first safety warning or the likelihood that a drug would have a safety problem. Median drug review times decreased significantly after cost recovery was implemented (p = 0.02).

The introduction of cost recovery and the associated reduction in review times did not affect the postmarket safety of drugs. Further changes to cost recovery, as are currently being proposed by Health Canada, need to be evaluated for any potential effects on the approval process that might influence decisions that Health Canada makes about the safety and efficacy of new drugs.