Canada’s new reliance rule for foreign drug approvals may not fix pediatric shortages

Canada has taken a step that pediatricians have awaited for decades: a Ministerial Order, brought into force on 15 July 2026, that allows Health Canada to approve certain drugs by relying on reviews already conducted by comparable foreign regulatory agencies. Pediatric drugs and age-appropriate pediatric formulations were selected as the first pilot category under the new framework, a choice that reflects the scale of an enduring problem. For years, Canadian children have faced a shortage of approved pediatric indications, a lack of formulations suited to their age and weight, quality-control concerns around locally compounded medicines, and fragmented reimbursement for pediatric treatments. The Order, published in the Canada Gazette in December 2025 and finalized in February 2026, is intended to make Health Canada’s review process more efficient by drawing on decisions and documents produced abroad. Yet according to a new analysis published in the Journal of Pharmacy and Pharmaceutical Sciences, the reform may fall short of solving the crisis it is meant to address.

The analysis, written by independent consultant Catherine Y. Lau, examines whether the reliance pathway will actually compel manufacturers to bring pediatric medicines to Canada. Her conclusion is cautious. The Order may ease some regulatory complexity and shorten approval timelines, but it introduces no mandatory requirements and no new incentives. Without those levers, Lau argues, the submission fees and labor involved in filing a pediatric application will probably outweigh the commercial return in most cases, making participation unattractive to sponsors and leaving the desired outcomes unrealized. The question she poses is pointed: is this sufficient to persuade companies to submit pediatric data packages when nothing obliges them to do so?

The contrast with the United States and the European Union is central to the argument. Both jurisdictions pair enforceable obligations with meaningful rewards in what regulators describe as a stick-and-carrot approach. In the United States, the Pediatric Research Equity Act requires pediatric studies for new drugs, with the FDA communicating study expectations to sponsors through a Written Request and requiring a Pediatric Study Plan by the end of phase 2. The voluntary Best Pharmaceuticals for Children Act complements this mandate with six months of marketing exclusivity for completing requested studies, and more recently a voucher program has been added that has been reported to be highly valuable to companies. Non-compliance can affect the approval of a new drug submission and delay its review.

The European Union initiates pediatric development even earlier. Companies must prepare a Pediatric Investigation Plan, which sets out the pediatric studies to be conducted and must be assessed and approved by the Paediatric Committee before a marketing authorization application proceeds. Incentives include a six-month extension of supplementary protection certificate, fee waivers, and up to ten years of market protection for certain off-patent medicines. The results of these frameworks are substantial. Publications from 2000 to 2020 report that nearly 70 percent of drugs approved in the United States include pediatric indications or labeling. More than 1,000 pediatric indications were added in the United States between 1998 and 2022, and more than 260 were added in the European Union between 2007 and 2016.

Canada, by contrast, has no mandatory requirement compelling sponsors to conduct pediatric studies or submit pediatric data to Health Canada. Its principal incentive is comparatively modest: six months of data protection added to the eight years already available for new chemical entities, and only if the pediatric application is submitted within five years of first approval. There is no incentive for older drugs already on the market or lacking pediatric formulations. A review of Canadian Product Monographs from 2007 to 2016 found that among 270 approved products, only 75 included pediatric indications, while 125 contained some pediatric information. An examination of Health Canada’s Submission Under Review database showed that between 2017 and 2026, 716 submissions were approved and 37 were rejected, with only three of the rejections pertaining to pediatric patients. Rejections, in other words, do not explain the low number of pediatric approvals in Canada; the submissions themselves are simply not being made.

The consequences for patients are well documented in the pediatric literature. Without approved indications, clinicians resort to off-label use that is not always supported by robust evidence. Without age-appropriate formulations, pharmacies and hospitals turn to local compounding, where variable quality control can compromise both efficacy and safety. Lau points to specific examples that illustrate the gap. Belimumab, tofacitinib, abatacept and anakinra all demonstrated adequate pediatric efficacy and safety with sufficient data to support approval of pediatric indications in the United States, yet none received Health Canada approvals for either the label or the formulation. A 2025 publication on tofacitinib summarized positive patient-reported outcomes from a post-hoc analysis of a randomized phase 3 study in juvenile idiopathic arthritis, but a pediatric-friendly liquid formulation remains unavailable in Canada. The Regulatory Decision Summary for a pediatric indication in 2026 noted that the company decided not to develop the liquid formulation in Canada for business reasons, not for safety.

Health Canada has not been idle. Since 2020 it has launched a Pediatric Drug Action Plan following extensive consultation, established a Pediatric External Reference Group co-chaired by Dr. Charlotte Hepburn and Dr. Catherine Litalien, and developed a National Priority List of Pediatric Drugs. In 2024 it published guidance advising sponsors to submit pediatric data packages, including Pediatric Study Plans from the United States or Pediatric Investigation Plans from Europe where available. A Pediatric Advisory Committee was created in collaboration with pediatric clinicians across the country. The Canadian Drug Agency, the national health technology assessment body responsible for reimbursement, published a health technology review in December 2025 summarizing federal initiatives and provincial reimbursement policies, which acknowledged the lack of pediatric indications, formulation shortages and reliance on off-label use. However, that review attributed the challenges primarily to small patient populations, low disease prevalence and the difficulty of conducting pediatric trials. Lau considers this explanation incomplete, noting that the United States and the European Union have already generated much of the relevant clinical evidence and that pediatric indications have been granted in other mid-sized countries comparable to Canada in population and gross domestic product.

Against this backdrop, the Ministerial Order creates a reliance pathway limited to specified drug classes through an incorporated-by-reference list for human and veterinary drugs. For human drugs, the list applies to new drug submissions, supplemental new drug submissions and abbreviated new drug submissions. Submissions may proceed through three mechanisms: general deeming for new and abbreviated submissions, 120-day filing for new drug submissions, and joint filing for new drug submissions. Supplemental and supplemental abbreviated submissions may qualify for general deeming, while only supplemental new drug submissions are eligible for 120-day filing and joint filing. The Order identifies potential benefits, including encouraging manufacturers to bring certain drugs to Canada and to file earlier, but it provides no additional incentives. The guidance list, despite complex qualifiers and restrictions on therapeutic classes such as cell and gene therapies, which are not allowed, partially follows the recommendations of the National Priority List for pediatric patients. The Order states that pediatric medicines were chosen because the area presents an urgent need for regulatory reform and an opportunity to gain experience with the reliance pathway.

Whether the pilot will translate into more approved pediatric medicines for Canadian children depends on sponsor behavior, and Lau’s assessment of the current proposal is skeptical. To strengthen the framework, she recommends extending the five-year window for submitting pediatric indications while allowing sponsors to retain the additional six months of data protection. The case of brentuximab vedotin, a drug on the National Priority List for pediatric high-risk Hodgkin lymphoma, illustrates the problem: it was approved in Canada on 1 February 2013, making the pediatric submission deadline February 2018, but the pediatric data were not available until 2021, missing the window for the six-month pediatric data exclusivity. She also proposes fee waivers or meaningful reductions, noting that a new drug submission currently costs 616,593 dollars and a supplemental new drug submission ranges from 127,668 to 319,282 dollars, along with data-protection incentives for older drugs, reduced administrative burdens where high-quality foreign reviews exist, priority status for pre-submission discussions, priority review for pediatric indications already prioritized in the United States or Europe, and an annual target for increasing pediatric submissions.

On the sponsor side, Lau recommends amending the pediatric guidance to make submission of a Canadian equivalent to a US Pediatric Study Plan or European Pediatric Investigation Plan mandatory, with delayed submissions potentially affecting review timelines for the associated new drug submission, and publicly listing delayed or failed submissions of required pediatric development plans, with annual updates to ensure accountability and transparency. Regulatory reliance itself has worked elsewhere: Australia’s Therapeutic Goods Administration uses assessment reports from comparable overseas regulators to shorten approval timelines, and reliance arrangements in Asia-Pacific countries have yielded positive outcomes. But the Canadian experience to date suggests that voluntary measures alone have not generated meaningful increases in pediatric submissions. Lau concludes that closing the gap will require urgent, coordinated action by policymakers, regulators, physicians, patient advocacy groups and manufacturers to remove the regulatory, commercial and practical barriers that continue to impede timely access to essential treatments for pediatric patients. Until mandatory requirements and meaningful incentives are added, the Ministerial Order, in its current form, is unlikely to deliver the pediatric medicines Canadian children have been waiting for.

Subject of Research: Regulatory reliance on foreign drug approvals and pediatric medication access in Canada

Article Title: Canada’s Ministerial Order for Reliance on decisions by foreign regulatory agencies for certain drugs: will it benefit pediatric patients?

Article References: Lau, C. Y. (2026). Canada’s Ministerial Order for Reliance on decisions by foreign regulatory agencies for certain drugs: will it benefit pediatric patients?. Journal of Pharmacy & Pharmaceutical Sciences, 29, Article 17612. https://doi.org/10.3389/jpps.2026.17612

Image Credits: AI Generated

DOI: 10.3389/jpps.2026.17612

Keywords: Canada, Health Canada, pediatric drugs, regulatory reliance, Ministerial Order, drug approval, pediatric formulations, off-label use, FDA, European Medicines Agency, drug incentives, health policy