Pharmaceutical Advertising 2024 Comparisons

Laws

In Canada, the sale and advertising of drugs (both prescription and non-prescription) and natural health products (NHPs) is regulated federally under the Food and Drugs Act (FDA), Food and Drug Regulations (FDR) and Natural Health Product Regulations.

The advertising of opioids and other controlled substances is regulated under the federal Controlled Drugs and Substances Act (CDSA), the Narcotic Control Regulations and the Benzodiazepines and Other Targeted Substances Regulations.

Health Canada is the national regulatory body for all health product advertising, including drugs, and is responsible for administering the FDA, the CDSA and their related regulations. Within Health Canada is the Health Products and Food Branch (HPFB), whose mandate is to manage the risks and benefits of health products. Various directorates are subsumed under HPFB, including the Marketed Health Products Directorate, the Medical Devices Directorate and the Natural and Non-prescription Drug Products Directorate.

General consumer advertising laws, including the federal Competition Act, also apply to the advertising and promotion of drugs.

Self-Regulation

There are several professional and industry associations with codes that regulate the advertisement and promotion of drugs. These codes are administered by advertising preclearance agencies (APAs), industry organisations and professional regulatory bodies.

Self-regulatory bodies and their respective codes include:

• Ad Standards Canada (Ad Standards): Canadian Code of Advertising Standards and Guidelines for Consumer Advertising of Health Products;
• Pharmaceutical Advertising Advisory Board (PAAB): Code of Advertising Acceptance (PAAB Code);
• Innovative Medicines Canada (IMC): Code of Ethical Practices (IMC Code); and
• Canadian Generic Pharmaceutical Association (CGPA): Code of Marketing Conduct Governing the Sale of Generic Pharmaceutical Products in Canada (CGPA Code).

Each province also has a College of Physicians and Surgeons and a College of Pharmacists, which regulate the professions and practice of medicine and pharmacy in their respective province. The Colleges set standards of ethical practice and rules of professional conduct by which their regulated members are required to abide, and they often include sections on advertising.

Ad Standards

Ad Standards is a national, not-for-profit advertising self-regulatory organisation responsible for administering the Canadian Code of Advertising Standards. Ad Standards is an APA and provides advertising preclearance for consumer-directed drug advertising and direct-to-consumer information. It also offers consultation and opinions on new product launches, advertising concepts and advertising copy.

Pharmaceutical Advertising Advisory Board

PAAB is an independent, not-for-profit organisation, responsible for administering the PAAB Code. It is the only APA whose preclearance service is recognised by Health Canada for advertising directed toward healthcare professionals.

Innovative Medicines Canada

IMC represents many of Canada’s brand name, research-based pharmaceutical companies. Members of IMC are required to abide by the IMC Code.

Canadian Generic Pharmaceutical Association

CGPA represents suppliers and manufacturers in Canada’s generic pharmaceutical industry. CGPA member companies are subject to the CGPA Code.

Provincial Colleges of Physicians and Surgeons

Each province has a College of Physicians and Surgeons, which regulates the profession and practice of medicine in that province. Physicians are required to follow the standards of ethical practice and rules of professional conduct set out by their respective College.

Provincial Colleges of Pharmacists

Each province has a College of Pharmacists, which regulates the profession and practice of pharmacy in that province. Pharmacists are required to follow the standards of ethical practice and rules of professional conduct set out by their respective College.

An “advertisement” is broadly defined in Section 2 of the FDA as including “any representation by any means whatever for the purpose of promoting, directly or indirectly the sale or disposal of any food, drug, cosmetic or device”.

A “drug” is broadly defined in Section 2 of the FDA to include “any substance or mixture of substances that is sold or represented for use in”, among other things, “the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, in human beings or animals” or the “restoring, correcting or modifying organic functions in human beings or animals”.

NHPs fall within the above definition of a drug. Section 1(1) of the Natural Health Product Regulations defines a “natural health product” as “a substance set out in Schedule 1 or a combination of substances in which all the medicinal ingredients are substances set out in Schedule 1, a homeopathic medicine or a traditional medicine, that is manufactured, sold or represented for use in”, among other things, “the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state or its symptoms in humans” or the “restoring or correcting organic functions in humans”.

Based on the breadth of the definition of a drug, a substance can be regulated as a drug under the FDA by reason of the representations made.

“Advertising” is regulated and as set out herein is subject to restrictions. By contrast, “information” – which does not directly or indirectly promote a drug – is not subject to the same restrictions. To assist industry in distinguishing between advertising and non-promotional information, Health Canada issued a long-awaited update to a document called “Guidance on distinction between advertising and other activities for health products” (Guidance on Advertising/Information) on 31 July 2023. This Guidance replaced its predecessor document, called “The Distinction Between Advertising and Other Activities”, which had not been updated since 2005.

The Guidance on Advertising/Information applies to messages and activities involving medical conditions or health-related matters, regardless of the target audience, and to any means of communicative media (including television, radio, print, websites and digital platforms) or setting.

To determine whether a message or activity is promotional, each message is to be evaluated on its own merit, in its entirety, with consideration of the context in which the message is given. Links to related materials are also considered, as are any other factors that provide insight as to whether the purpose of the message or activity is to promote the sale of a drug.

Where the primary purpose of a message or activity is unclear, Health Canada encourages stakeholders to consider the following questions to determine whether their message is promotional or informational.

• What is the context in which the message is disseminated?
• Who are the primary and secondary audiences?
• Who delivers the message?
• Who sponsors the message and how?
• What influence does a drug manufacturer have on the message?
• What is the content of the message?
• How frequently is the message delivered?

The Guidance on Advertising/Information provides examples of materials and the circumstances under which they would be considered informational or promotional. For example, patient-facing information materials such as leaflets or patient support programmes may be considered promotional if they:

• are mainly product-focused;
• emphasise the benefit of a drug or minimise its risks;
• are presented in a layout or design associated with a specific drug;
• are disseminated with other promotional messages or activities; or
• include comparative therapeutic claims.

Health Canada recommends that pharmaceutical companies consult with APAs to determine whether a proposed message or activity is advertising or non-promotional information.

Press releases and press conferences for pharmaceutical drugs are not prohibited. Pharmaceutical companies may choose to issue a press release or disseminate information at a press conference, for example, when a new drug is launched, a notice of compliance is issued by Health Canada or a new indication for use is incorporated into the terms of market authorisation for an existing drug.

However, press releases should be informational in nature and avoid the promotion of a drug. Pharmaceutical companies should avoid making non-factual statements about the safety or efficacy of a drug or comparisons to other treatments, using a brand name excessively or describing the drug as a “breakthrough”, as this may bring the message or activity within the scope of promotion. Furthermore, pharmaceutical companies should not influence third parties to pick-up or place the announcement.

Comparative advertising of medicinal products is permissible, but comparative claims must be based on conclusive, definite and validated evidence. Comparative claims may fall into one of three categories:

• claims of comparative efficacy;
• claims of onset or duration of action; or
• claims comparing side effect profiles and other safety parameters.

Health Canada’s Therapeutic Comparative Advertising: Directive and Guidance Document outlines the standards of evidence required to support each of the categories of comparative claims. For example, statements comparing one drug product to another drug product that make an equivalence, parity or superior efficacy claim must be supported by at least two independent, controlled, blinded and randomised clinical studies.

Ad Standards also publishes guidance information to help advertisers ensure their claims are compliant with Health Canada requirements. Advertisers may also consult with Ad Standards for preclearance on therapeutic comparative advertising.

Other risks to comparative advertising are not addressed here. For example, Section 22 of the Trademarks Act prohibits the use of another's registered trade mark in a manner that is likely to have the effect of depreciating the value of the goodwill attaching to the registered trade mark. This section is often invoked in comparative advertising cases.

The FDA and FDR prohibit the advertisement of any drug that is not approved for sale in Canada; this authority is found in Section C.08.002 of the FDR. Section 9 of the FDA prohibits the advertisement of any drug “in a manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety”, including the advertisement of off-label use of a drug. Section 70 of the Narcotic Control Regulations establishes additional restrictions for advertising narcotics, both directly and indirectly.

The Guidance on Advertising/Information also provides direction for messages or activities that may be promotional and captured by the restriction set out above. However, if the communication is non-promotional in nature, it could potentially include statements about unauthorised medicines or indications.

The following examples could also potentially include statements about unauthorised medicines or indications if they are non-promotional in nature, and the messaging highlights that the safety and efficacy of the unauthorised product(s) is still under investigation and that it does not have official market authorisation:

• press releases;
• clinical trial and investigational testing recruitment material;
• corporate messages;
• medical condition and treatment awareness materials;
• electronic tools and technology;
• formulary kits or packages;
• educational activities;
• publication supplements;
• medical procedure and health service messages;
• patient information materials;
• patient support group activities and literature;
• risk management plans;
• reference texts and peer-reviewed journal articles; and
• responses to inquiries.

While unapproved or unauthorised drugs may not be advertised, information that is not promotional in nature is not subject to the FDA or FDR. Thus, information that is provided in a non-promotional manner at Canadian and international medical and scientific conferences is permissible.

Pharmaceutical companies should, therefore, exercise caution to ensure their messaging or activities at scientific conferences are not promotional. Health Canada’s Guidance on Advertising/Information suggests that information regarding unauthorised drugs or unauthorised uses of drugs should be accompanied by messaging stating that:

• safety and effectiveness have not been established by Health Canada; and
• market authorisation has not been granted in Canada.

The display of a drug product prior to market authorisation without prominently identifying it as not being authorised for sale may be considered promotional.

Furthermore, these messages or activities should not be intended to target the general public, whether directly or indirectly.

Health Canada’s Guidance on Advertising/Information sets out that information relating to a drug may be provided by a pharmaceutical company in response to an unsolicited inquiry from a healthcare professional. However, if the response to an inquiry regarding unauthorised products or off-label indications is communicated by sales or marketing personnel, the information may be considered promotional.

The IMC Code explicitly prohibits IMC members from proactively discussing off-label indications, uses, dosages or populations with healthcare professionals.

Health Canada’s Guidance on Advertising/Information notes that formulary kits may be prepared for review by both public and private formulary committees, which determine whether a drug will be included in a public or private drug plan, respectively. However, formulary kits or information disseminated through the kits may be considered promotional if:

• the information exceeds what would normally be required to support such an application;
• the kits are disseminated to a wider audience at the same time or at a later date; or
• the kits involve the distribution of samples not required by the committee.

Health Canada’s Special Access Programme (SAP) allows healthcare professionals to request access to drugs that are currently unavailable for sale in Canada where patients have serious or life-threatening conditions. Access to SAP is limited to compassionate or emergency situations where conventional therapies have failed or are unsuitable or unavailable. When requesting a drug through SAP, healthcare professionals must:

• ensure their patients are well informed of the possible risks and benefits of the drug being requested and its development status;
• provide a report to Health Canada on the results of the use of the drug, including any adverse reactions;
• maintain accurate and accessible records; and
• ensure that the decision to prescribe the drug is supported by credible evidence available in relevant medical literature or provided by the drug manufacturer.

SAP cannot be used to promote or encourage early access to drugs, nor to bypass the traditional drug review process. As the drug products involved in SAP are not available for sale in Canada, the products themselves cannot be promoted or advertised.

In all cases, irrespective of the audience, Section 9 of the FDA states that “no person shall label, package, treat, process, sell or advertise any drug in a manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety”.

There are restrictions on advertising drugs to the “general public”, which Health Canada’s Guidance on Advertising/Information defines as “[o]rdinary people, especially all the people who are not members of a particular medical, pharmaceutical, or scientific organisation or who do not have any special type of medical or scientific knowledge”. Persons who have been prescribed a drug by a healthcare professional are excluded from the definition of “general public”.

Section C.01.044 of the FDR restricts the information that may be contained in advertising of prescription drugs directed to the general public, stating: “If a person advertises a prescription drug to the general public, the person shall not make any representation other than with respect to the brand name, the proper name, the common name and the price and quantity of the drug.” The type of “advertising” permitted under this section has been called “reminder advertising”, which is limited to the name, price and quantity of a prescription drug, and does not include reference to any disease state (eg, “VIAGRA. Talk to your doctor.”).

The restriction only applies to “advertising”, and not to non-promotional information. Accordingly, messages such as “help-seeking messages” are permitted. These messages discuss a disease state but make no reference to a specific prescription drug product, and meet the criteria outlined in Health Canada’s Guidance on Advertising/Information.

Section 3(1) of the FDA states that no person shall advertise, among others, any drug to the general public as a treatment, preventative or cure for any of the diseases, disorders or abnormal physical states referred to in Schedule A.1 of the FDA – namely, the following diseases:

• acute alcoholism;
• acute anxiety state;
• acute infectious respiratory syndromes;
• acute, inflammatory and debilitating arthritis;
• acute psychotic conditions;
• addiction (except nicotine addiction);
• appendicitis;
• arteriosclerosis;
• asthma;
• cancer;
• congestive heart failure;
• convulsions;
• dementia;
• depression;
• diabetes;
• gangrene;
• glaucoma;
• haematologic bleeding disorders;
• hepatitis;
• hypertension;
• nausea and vomiting in pregnancy;
• obesity;
• rheumatic fever;
• septicaemia;
• sexually transmitted diseases;
• strangulated hernia;
• thrombotic and embolic disorders;
• thyroid disease; and
• ulcer of the gastro-intestinal tract.

Section 3(3) prohibits advertising to the general public of any drug manufactured, sold or represented for use in the prevention of conception, unless authorised by regulation.

However, the FDR allows non-prescription drugs (via an exemption to the restrictions under Section 3(1) referenced above) to be advertised only as preventatives for the above Schedule A.1 conditions. These claims should not exaggerate the degree to which risk will be reduced nor imply that the risk of developing a condition will be eliminated by using the drug.

Non-prescription drugs that have received market authorisation from Health Canada may be advertised to the general public. The Terms of Market Authorisation (TMA) sets out the intended use(s) of the drug as authorised by Health Canada. The TMA is known as a product licence in the case of NHPs, and a product monograph or product label in the case of non-prescription drug. All promotional claims must be consistent with the scope of the product licence or product label, or product monograph, as applicable.

Health Canada, in consultation with Ad Standards, has published Guidelines for Consumer Advertising of Health Products, which sets out best practices for industry when advertising NHPs and non-prescription drugs to the public.

Pharmaceutical advertisements directed at the general public must clearly communicate at least one of the drug’s indications or recommended uses, consistent with the drug’s TMA.

The following messages and activities are prohibited in pharmaceutical advertisements to the general public:

• offers for samples;
• therapeutic guarantees;
• claims that are inconsistent with the drug’s TMA;
• claims or comparisons that create an erroneous impression about the drug;
• claims or comparisons that create an erroneous impression about a competitor’s drug;
• reference to the FDA or FDR; and
• representation that states or implies the endorsement, approval or recommendation of a drug by Health Canada.

As discussed in 4.1 Main Restrictions on Advertising Pharmaceuticals to the General Public, advertising prescription drugs directly to the general public is restricted to the name, price and quantity of the drug. All other information is prohibited.

The IMC Code includes industry guidance on interacting with patient organisations. It sets out that members may provide grants to “groups or associations of Stakeholders to organise bona fide activities such as medical research, public policy research, continuing professional education, and training or to support any project that will enhance patient outcomes or relates to, patient or community education or community projects that promote better health care”.

Furthermore, members are permitted to provide service-oriented items that aid in a patient’s understanding of, or adaptation to, their condition, or for encouraging adherence with a recommended therapy – eg, agendas, calendars, diaries, fridge magnets and kit folders.

Members are discouraged from creating patient organisations whose sole purpose is to further market access in an area of therapeutic interest.

Under the PAAB Code, all pharmaceutical advertising directed at healthcare professionals must contain:

• the brand or trade name of the drug;
• the non-proprietary or generic name of the drug; and
• the federal drug schedule of the drug.

Furthermore, all advertising must be truthful and consistent with the drug’s TMA, offer a balanced view of risks and be supported by relevant evidence. Advertisements cannot include promotional content based on information that has not been authorised by Health Canada. Advertisements cannot imitate the layout, text or visual representation of another pharmaceutical company’s advertisements in a manner that is likely to confuse or mislead the reader.

Product names may be used in company price lists provided to healthcare professionals and are exempt from PAAB preclearance, so long as the price list does not contain therapeutic claims, price comparisons or claims of company or product merit, statutes or issues.

The Product Monograph is the Canadian equivalent to the Summary of Product Characteristics (SmPC).

The PAAB Code sets out that advertised claims of drugs must be consistent with and fall within the limitations of the drug’s TMA. Any advertisement making product claims or containing quotes from scientific literature must include a complete listing of the scientific references. It is possible that data not included in the product monograph may be referred to in advertisements to healthcare professionals, subject to compliance with the following restrictions:

• clinical or therapeutic claims must be based on published, peer-reviewed, controlled and well-designed studies, with clinical and statistical significance clearly indicated;
• unpublished data is regarded as having received independent review when there is evidence that an editor of a peer-reviewed journal has accepted this data for future publication, or when the data has been reviewed as part of a submission to Health Canada and there is evidence of acceptance indicated by inclusion in the TMA;
• non-evidence-based statements such as testimonials regarding adverse drug reactions are not acceptable;
• claims based upon laboratory or animal testing reports should be separated and cannot be used to imply clinical significance, unless there is evidence of a valid clinical correlation; and
• claims or quotations that are out of context or inconsistent with the conclusions of the cited author(s) will not be accepted.

The IMC Code states that a member’s promotional activities must never involve proactive or solicited discussion of off-label indications, uses, dosages or populations, and must be consistent with the approved prescribing information in the product monograph. If a product’s indications differ from those contained in the product monograph, material information provided at scientific conferences should be labelled with the following disclaimer: “The information contained herein does not necessarily reflect the content of the approved Canadian product monograph” or similar text, legible and in proportionate size to the material displayed or presented.

Drugs may only be advertised in a manner that is consistent with their TMA. Combination products may only be advertised as such if this would be consistent with each of the product’s TMA.

Drugs may only be advertised in a manner that is consistent with their TMA.

Pharmaceutical companies are not prohibited from providing reprints of journal articles concerning their pharmaceutical drugs, but must follow the general rules regarding the promotion and advertisement of drugs. The PAAB Code notes that information that has been published independent of a manufacturer, including clinical reprints, may be considered advertising if it is communicated with the intent to influence the choice, opinion or behaviour of those addressed by commercial messages.

The IMC Code permits members to distribute reprints of scientific and medical papers to healthcare professionals at conferences, provided that the papers are reprinted verbatim and are not presented in a manner that differs in any way from the approved product monograph.

Medical science liaisons (MSLs) hold customer-facing, non-promotional roles within pharmaceutical and biotechnology organisations, and are generally responsible for engaging in scientific exchange with healthcare professionals and other external stakeholders and supporting research and scientific initiatives within their organisation. MSLs are subject to the same rules and regulations as any other employee of a pharmaceutical company.

Advertising preclearance is voluntary for all drugs except opioids: all advertisements for opioids must be precleared by an APA.

APAs follow Health Canada’s criteria for the preclearance of advertising material. Currently, Ad Standards and PAAB provide advisory opinions on messages directed to consumers for prescription drugs. Ad Standards and Extreme Reach are recognised by Health Canada to preclear advertising material for non-prescription drugs and NHPs directed to consumers. PAAB is recognised by Health Canada to preclear advertising material for all drugs directed to healthcare professionals.

Health Canada strongly encourages all pharmaceutical advertisers to have their advertising materials precleared prior to dissemination.

Pharmaceutical companies may achieve compliance with the rules concerning the advertisement of drugs by voluntarily engaging with APAs to have their advertisements precleared. Furthermore, members of industry associations such as IMC and CGPA are required to abide by their respective organisation’s ethical codes.

In general, the restrictions on advertising under the FDA and FDR, as well as the CDSA and its regulations, apply equally to online messages.

Electronic advertising is also subject to Canada’s anti-spam legislation (CASL), which requires businesses and advertisers to obtain consent from customers before sending them commercial electronic messages such as emails or text messages.

Federal and provincial privacy laws also apply to the collection, use and disclosure of personal information.

The PAAB Code suggests that the sponsor of a website containing pharmaceutical advertising material should “provide adequate and sufficient mechanisms to determine the regulatory category of the person requesting the information”. PAAB notes that websites directed at healthcare professionals should contain a “well-controlled entry system”.

Where a website contains content relating to prescription drugs or products promoting the treatment or cure of a Schedule A disease, the mechanism must pose a barrier that restricts consumers from accessing the sponsored site.

Companies may provide disease awareness information that is accessible to the general public online. In general, the same rules that apply to traditional means of information dissemination apply to online means.

Pharmaceutical companies are not prohibited from sponsoring virtual scientific meetings. In general, the same rules that apply to traditional scientific meetings apply to virtual meetings.

The rules applicable to pharmaceutical advertising in general apply to advertising via social media. In its Guidance on Advertising/Information, Health Canada notes that information disseminated through social media may be considered promotional if:

• the social media page uses a pharmaceutical company’s branding;
• the content, hyperlinks or interactive features emphasise a specific drug and its benefits;
• sharing options, such as likes and comments, could change the context in which the content is disseminated; or
• the user responsible for the social media activity engages in communications beyond general monitoring.

Anti-bribery and anti-corruption are enforced under the Criminal Code and the Corruption of Foreign Public Officials Act.

The IMC Code prohibits members from hiring healthcare professionals to provide services as an inducement for prescribing, supplying, recommending, buying, selling, access, reimbursement or favouring a member’s products. Furthermore, members are not to offer patient support programmes to healthcare professionals as an obligation or undue inducement to prescribe a member’s products.

The CGPA Code similarly restricts CGPA members from offering scholarships, bursaries or other payments, directly or indirectly, that would bring the generic pharmaceutical industry into disrepute, reduce public confidence in the industry or constitute an inducement to influence the present or future professional practice of recipients.

The IMC Code allows members to provide “service-oriented items” whose primary goal is to enhance a healthcare professional’s understanding of a condition or its treatment, or to assist stakeholders to better perform their professional activities. Members are prohibited from offering any gifts, in cash or in kind, to a healthcare professional or any member of a healthcare professional’s clinical or administrative staff or family as an incentive or reward for prescribing, administering, recommending, purchasing, paying for, reimbursing, authorising, approving or supplying any product or service sold or provided by the member.

Under the CGPA Code, gifts or items of material value for healthcare professionals are generally prohibited. However, gifts or items of material value may be provided to healthcare professionals on occasion, but only if the gift or item is modest in nature and expense and does not interfere with the healthcare professional’s independence or contravene applicable laws and regulations. Appropriate records of any such gifts should be maintained.

The provision of samples of medicinal products to healthcare professionals is permitted by the FDR, subject to the following restrictions:

• the healthcare professional must sign an order specifying the proper name or common name, the brand name and the quantity of a drug;
• the drug cannot be a narcotic as defined in the Narcotic Control Regulations, a controlled drug or a prescription drug as defined in the Cannabis Regulations; and
• a prescription drug sample may only be distributed to a practitioner or pharmacist who is entitled to prescribe or dispense that drug.

Under the IMC Code, members may distribute “clinical evaluation packages” (CEPs) to healthcare professionals to determine a patient’s clinical response to drug therapy before a full course of therapy is prescribed. CEPs cannot be distributed at conventions, clinic displays, business meetings, events or learning programmes.

The CGPA Code prohibits the provision of samples to customers and healthcare professionals, except where samples are provided to physicians in accordance with the applicable laws and regulations, and where such provision is in the best interest of patients.

The IMC Code allows members to sponsor Canadian third-party educational or professional conferences and congresses, subject to restrictions, including:

• the primary purpose of the event must be scientific, medical and/or educational in nature;
• the responsibility for and control over the selection of content, faculty, educational methods, materials and venue belongs to the organisers of the conference; and
• the request for sponsorship must be received in writing and must include all details (such as a budget) of the funding requested.

IMC members are permitted to sponsor healthcare professionals to attend international events under the following conditions:

• there is a legitimate educational purpose fulfilled in sponsoring the healthcare professional;
• the venue must be appropriate for scientific or educational communications;
• the primary purpose of the event must be scientific, medical or educational in nature; and
• the international event involves participants from many countries.

IMC’s Note for Guidance on Events and Meetings Organized or Sponsored by Companies states that meetings or events should not be planned to coincide with local or internationally recognised sporting or cultural events taking place in the same location at or around the same time. Furthermore, members should not provide financial support for entertainment organised in connection with the event, nor should healthcare professionals be remunerated for attending events and meetings held in Canada. When promoting events, language about the event being located at, for example, a “world-renowned resort” with “beautiful beaches nearby” or other similar language is an indicator that the primary purpose may not be educational, and the location and venue may not be appropriate.

IMC members are allowed to provide financial or non-financial support to registered charities and not-for-profit organisations through the sponsorship of a fundraising activity, which may include the purchase of a table or tables at a dinner or other social event, the purchase of a foursome at a golf tournament, or other sporting or cultural activity.

The CGPA Code permits manufacturers to sponsor events involving the participation of customers, such as conventions and trade shows, on the condition that the sponsorship amount provided is for visibility and the services offered as part of the sponsorship are consistent with fair market value. A manufacturer may also provide financial support to a charitable event organised in collaboration with a customer, including by the purchase of visibility, a table or participation in a social or sporting event.

The IMC Code allows for the sponsorship of organisations involved in educational, health-related, scientific or medical activities. Furthermore, IMC permits its members to loan out medical equipment in order to improve the prevention, diagnosis or treatment of diseases in a specific therapeutic area. A loan of equipment cannot be for an indefinite period, and all equipment must be returned to the member at the end of an agreed term.

Healthcare professionals are prohibited from invoicing any payer (including provincial governments, patients or insurance companies) for the use of loaned equipment.

Drug pricing in Canada is complex, involving various agencies and federal, provincial and territorial public drug plans, as well as private drug plans.

Pharmaceutical companies may provide pharmacies with rebates or “professional allowances” for drugs dispensed by the pharmacies, typically in the form of volume discounts and arguably to cover certain types of professional pharmacy services. These rebates are not factored into a drug’s established list price. Two provinces (Ontario and Québec) have generally prohibited such rebates.

For example, in Ontario, the Ontario Drug Benefit Act (ODBA) and the Drug Interchangeability and Dispensing Fee Act (DIDFA) prohibit rebates between manufacturers, wholesalers and operators of pharmacies. Under both pieces of legislation, a rebate includes “currency, a discount, refund, trip, free goods or any other prescribed benefit”, but does not include “something provided in accordance with ordinary commercial terms”. The General Regulation under the ODBA excludes from the definition of “rebate” the value of a benefit that is provided in accordance with ordinary commercial terms with respect to a listed drug product that is not interchangeable where the ordinary commercial terms are a discount for prompt payment. The General Regulation under the DIDFA excludes the value of a benefit that is provided in accordance with ordinary commercial terms from the definition of “rebate”, as long as it meets all of the following conditions:

• the benefit must be provided in the ordinary course of business in the supply chain system of interchangeable products between any of a manufacturer, a wholesaler, an operator of a pharmacy or a company that owns, operates or franchises pharmacies;
• the value of the benefit must be set out in a written agreement between any of a manufacturer, a wholesaler, an operator of a pharmacy or a company that owns, operates or franchises pharmacies;
• the benefit must relate to an ordinary commercial relationship that is any of a prompt payment discount, a volume discount or a distribution service fee; and
• a person who receives the benefit reports the net selling price of the drug products representing the price of the product less the value of the benefits received, to the executive officer of the Ontario public drug programs if required by the executive officer to do so.

In Québec, patient support programmes are restricted under the Regulation respecting exceptions to the prohibition against paying or reimbursing the price of a medication or supply covered by the basic prescription drug insurance plan. With limited exceptions, drug manufacturers, wholesalers and their intermediaries are prohibited from paying or reimbursing all or part of the price of a drug that is covered by the basic public health plan in that province.

Furthermore, healthcare professionals may be restricted from accepting industry rebates or discounts by their respective regulatory College. For example, the Alberta College of Pharmacy allows its members to accept manufacturers’ coupons, subject to consideration of the College’s ethical principles, but prohibits its members from providing manufacturers’ coupons to persons to obtain drug products and services, unless exceptional compassionate circumstances apply.

The IMC Code and IMC’s Note for Guidance on Patient Support Programs and Medical Practice Activities outline the parameters under which members may offer rebates or discounts on their products. Members may offer patient support programmes, including financial assistance, to increase or facilitate patients’ understanding of a disease or treatment, improve patients’ health outcomes or improve patients’ adherence to treatment. Members are prohibited from offering patient support programmes under the following circumstances:

• to gain access to a medical practice or hospital formulary listing;
• as an obligation or undue inducement to prescribe a prescription drug;
• in exchange for recommending for use; or
• in a manner that could be construed as a gift.

The CGPA Code prohibits manufacturers from providing discounts on the purchase price of generic drugs to customers, which include healthcare professionals, federal or provincial government departments, Crown corporations and public institutions, such as public healthcare facilities and health authorities. The CGPA Code further sets out that manufacturers may not grant allowances or rebates to customers if the manufacturer knows the customer will use the allowance or rebate “in a manner that is prohibited by applicable laws and regulations”.

For greater certainty, “rebates” can also refer to the practice whereby the government and the patient pay the established list price for a drug at the time it is dispensed. Thereafter, the pharmaceutical company makes a lump sum payment (a “rebate”) to the government’s general revenue. When the price is set through rebates (rather than a transparent price reduction), the patient may pay more than the actual price of the drug, depending on various factors including the patient’s drug plan.

The IMC Code and IMC’s Note for Guidance on Retaining the Services of Stakeholders apply where healthcare professionals are paid to provide services to member pharmaceutical companies. IMC members are permitted to retain the services of stakeholders, including healthcare professionals, and to compensate them for their services, travel and other expenses in connection with activities such as speaking at or chairing meetings, involvement in medical or scientific studies, clinical trials or training services, participation at advisory board meetings, participation in market research, development of material, or other related services.

In all such cases, an agreement between the member and the healthcare professional must be in writing, and must fulfil the following criteria.

• A legitimate need for services must be clearly identified in advance of requesting the services and entering into an agreement with the prospective healthcare professional.
• The selection of the healthcare professional must be based solely on their qualifications to provide the service required.
• The number of healthcare professionals retained must not be greater than the number reasonably necessary to achieve the identified need.
• The hiring of the healthcare professional to provide the relevant service must not be an inducement for prescribing, supplying, recommending, buying, selling, access to, reimbursement of or favouring a member’s products.
• Compensation for the services must be reasonable and reflect the fair market value of the services provided. Reimbursement of reasonable out-of-pocket expenses, including travel and accommodation, may be provided where allowable under the IMC Code. Payments must never be in cash.
• Agreements must specify the nature of the services to be provided and the basis for payment of those services.

There are various codes of ethics governing the relationship between pharmaceutical companies and healthcare professionals. For example, the College of Physicians and Surgeons of Ontario (CPSO) notes that physicians who are asked by industry to serve as an adviser or consultant must “only accept remuneration at fair market value and commensurate with the services provided”. Similarly, the CPSO only allows physicians to accept compensation for participation in industry research at fair market value. It also prohibits physicians from accepting “finders fees”, where the sole activity performed by the physician is to disclose the names of potential research participants.

There is no provision under federal law requiring prior authorisation or notification for gifts, samples, sponsorship, grants, donations or payments provided to healthcare professionals. However, healthcare professionals are required to abide by the standards of ethical practice and rules of professional conduct applicable to their profession. In general, provincial Colleges restrict the conditions under which their regulated members may accept gifts or other benefits that could be perceived as or result in a conflict of interest.

Furthermore, provincial legislation may require healthcare professionals or healthcare organisations to notify a regulatory body in the case of benefits received; this is the case in Ontario and British Columbia. In Ontario, Section 1(11) of the General Regulation under the ODBA requires a person who receives a benefit in accordance with ordinary commercial terms to report – if required by an executive officer of the Ontario public drug programmes – the net selling price of the drug products representing the drug benefit price, less the value of the benefits received. In British Columbia, Section 21(3) of the Pharmaceutical Services Act requires healthcare professionals to report – if requested by the Minister of Health – the nature and value of any incentive received in relation to, among others, drugs listed on a formulary.

Rebates and Discounts

The regulatory landscape surrounding drug pricing, including rebates and discounts, is complex. In general, the following process is used to determine drug pricing:

• the drug manufacturer makes a submission to Health Canada for regulatory approval to sell and market their product;
• the manufacturer makes a submission to the Canadian Agency for Drugs and Technologies in Health (CADTH) and/or the relevant provincial, territorial or federal ministry to request public funding for the product;
• the product is reviewed, and a recommendation is issued on whether or not the product should be publicly funded;
• a pricing negotiation takes place, if applicable, for products that receive a positive recommendation; and
• the responsible provincial, territorial or federal authority makes the final funding decision.

Most newly approved drugs are reviewed under CADTH’s reimbursement review process. CADTH is an independent, not-for-profit organisation. It advises on whether a drug should be included for reimbursement within a public drug plan but does not negotiate on the drug’s price. On 18 December 2023, Health Canada announced the creation of the Canadian Drug Agency (CDA), which will be built from CADTH and in partnership with the provinces and territories. In Québec, the Institut national d’excellence en santé et en services sociaux (INESSS) plays a similar role for that province’s public drug plan.

After a recommendation has been published by CADTH or INESSS, the pan-Canadian Pharmaceutical Alliance (pCPA) negotiates with drug manufacturers on behalf of its member jurisdictions, which include all provincial and territorial public drug plans, as well as the federal Non-Insured Health Benefits, Correctional Services of Canada and Veterans Affairs Canada drug plans. Where negotiations are successful, the pCPA will issue a letter of intent setting out the terms of the agreement between the pCPA and the drug manufacturer.

However, the provincial, territorial or federal drug plan is ultimately responsible for making the final determination on whether a drug will be included in the drug plan. Public drug plans may also enter into a product listing agreement (PLA) with the drug manufacturer, which is a negotiated agreement for the drug plan to provide coverage for the drug at a reduced price, typically through a rebate. As such, drug manufacturers are required to work with provincial, territorial and federal drug plans when offering rebates on drugs.

There is currently no federal or provincial law that requires pharmaceutical companies to disclose transfers of value they make to healthcare professionals or healthcare institutions.

In December 2017, the Ontario government passed a law called the Health Sector Payment Transparency Act, which would require pharmaceutical companies to report all payments and gifts to healthcare professionals and healthcare institutions. The law is modelled on the US Physician Payments Sunshine Act. It has not yet come into force.

IMC has developed a Voluntary Framework on Disclosure of Payments made to healthcare professionals and organisations in exchange for services, and to fund charitable, educational and scientific activities. Since June 2017, ten Canadian pharmaceutical companies voluntarily publish aggregate sums of their payments to Canadian healthcare professionals and healthcare organisations.

There is currently no federal or provincial law requiring pharmaceutical companies, including foreign companies, to disclose transfers of value to healthcare professionals or healthcare institutions, nor is there any federal or provincial law requiring pharmaceutical companies that do not yet have products on the market to disclose such transfers.

Health Canada is responsible for compliance and enforcement activities related to the marketing of drugs. It assesses whether advertisements used to market drugs are false, deceptive or misleading through its Regulatory Operations and Enforcement Branch.

In addition, PAAB, IMC, CGPA and Ad Standards each have their own processes for responding to complaints by members of the public and/or competitors.

Pharmaceutical companies can lodge a complaint against competitors for advertising infringements. Each of the regulatory bodies mentioned in 11.1 Pharmaceutical Advertising: Enforcement Bodies have a complaint investigation process whereby industry members, healthcare professionals or members of the public may initiate the complaint process.

Health Canada

As set out in Health Canada’s compliance and enforcement policy framework and marketing compliance and enforcement webpage, where a pharmaceutical company is found to be in breach of its obligations under federal legislation, Health Canada has four levels of enforcement in which it may take the following actions.

• Level 1:
1. require the involved party to immediately stop non-compliant activity;
2. speak with the regulated party to clarify issues and expectations; and
3. include the non-compliant activity in Health Canada’s Health Product Advertising Incidents table.
• Level 2:
1. publish a Health Product InfoWatch Article;
2. issue an information update, public warning and/or advisory; and
3. initiate a regulatory stop-sale, suspension, warning letter and/or seizure of the product.
• Level 3:
1. issue an injunction.
• Level 4:
1. apply its powers under the Protecting Canadians from Unsafe Drugs Act (Vanessa’s Law).

Depending on the specifics of the case, enforcement levels may be applied simultaneously, especially where there is a high degree of risk or widespread misinformation.

Vanessa’s Law enables Health Canada to take quick and appropriate action when a serious health risk is identified, such as ordering a product recall or requiring a label change or package modification to make new safety information available to patients and consumers. Vanessa’s Law also imposes strict penalties for unsafe products, including jail time and fines of up to CAD5 million per day.

Self-Regulation

PAAB may publish reports of notable violations, require remedial measures, refer complaints to Health Canada and impose penalties.

IMC may publish infraction notices on its website, require a compliance statement from a member in breach of the IMC Code, expel the member from IMC and impose fines of up to CAD100,000 per offence.

CGPA may require a respondent organisation to take immediate action to discontinue or modify the breaching behaviour, recall and destroy any offending material, issue a retraction, undertake a course of study or training, terminate the respondent organisation’s membership in the CGPA and impose fines of up to CAD100,000 per offence.

Decisions of Health Canada are subject to judicial review. Courts will presumptively apply the deferential administrative standard of reasonableness. Courts may apply a standard of correctness in some cases – for example, where there is a general question of law that is of central importance to the legal system as a whole.

As part of its Regulatory Transparency and Openness Framework, Health Canada publishes a table of “Health Product Advertising Incidents”, which sets out the date of a complaint about advertising, the name of the company, the product, product type, details of the complaint and a summary of whether enforcement action has been taken or whether Health Canada is assessing the complaint.

Between 1 October 2014 and 30 June 2022, Health Canada reported 2,309 health product advertising incidents that it was made aware of, including incidents related to drugs and veterinary health products. Health Canada became aware of 188 advertising incidents in 2018, 405 incidents in 2019, 961 incidents in 2020, 647 incidents in 2021, and 107 incidents in the first six months of 2022.

Many of the reported advertising incidents (1,003 between 27 March 2020 and 25 January 2024) related to unauthorised claims for the treatment of COVID-19. In addition, many concerns alleged unlawful direct-to-consumer advertising of BOTOX botulinum toxin, which is regulated as both a biologic and a prescription drug. Other incidents concern the making of unauthorised claims in advertising.

Veterinary Health Products

Veterinary health products (VHPs) and veterinary drugs are regulated under the FDA, FDR and Natural Health Products Regulations. The Veterinary Drugs Directorate within HPFB of Health Canada enforces the advertising of both.

VHPs are low-risk drugs in dosage form that are used to maintain or promote the health and wellness of companion and food-producing animals, and contain ingredients such as vitamins and minerals. They must conform to strict inclusion criteria (eg, limitations on ingredient concentration levels and mandatory cautions and/or warnings on product labels for active substances as well as non-medicinal (excipient) ingredients) and must contain only permitted substances. VHPs cannot claim to treat, cure or prevent disease. VHPs must be on a “List of Notified Products” and receive a “Notification Number” before they can be advertised. Advertisements of VHPs must be within the scope of the recommended use notified to Health Canada and must apply only to species listed in the intended species notified to Health Canada.

Veterinary Drugs

Veterinary drugs are used to specifically treat, cure or prevent a disease, and must receive a “Drug identification Number” before they can be advertised. Veterinary drugs are subject to the same restrictions on advertising as human drugs. For example, in accordance with Section C.08.002 of the FDR, drugs that are not approved for sale in Canada cannot be advertised, and there are restrictions on advertising veterinary drugs available only on prescription directly to consumers.

The enforcement landscape that Health Canada applies to human healthcare products is also available for veterinary drugs and VHPs.

CAHI

The Canadian Animal Health Institute (CAHI) is the trade association representing companies that develop, manufacture and distribute drugs, biologicals, feed additives, animal pesticides and VHPs. Membership includes the major firms that collectively manufacture approximately 95% of all animal health products marketed in Canada. CAHI publishes a Code of Marketing Practice, and has a Marketing Practices Review Committee to adjudicate allegations of a member acting contrary to the Code of Marketing Practices.