Canada Accelerates Regulatory Modernization

In 2025, the Government of Canada launched a Red Tape Review across all federal departments and agencies. The Red Tape Review initiative was aimed at reducing regulatory burdens, streamlining processes and improving efficiency across federal departments and agencies. Following the Red Tape Review, Health Canada and the Public Agency of Health released a report identifying initiatives and actions to remove red tape. One key initiative focused on aligning Health Canada with international regulators and reducing trade barriers for Health Canada regulated products. Draft guidance documents and proposed legislative changes have been introduced to implement this initiative. In this update, we review these guidance documents and proposed legislative changes, looking ahead to 2026.

Key Takeaways

New developments at Health Canada signal a shift toward a more efficient and globally harmonized regulatory regime, focused on scientific rigor, reduced duplication and faster patient access. The following developments have important implications for life science companies seeking timely market access of drug and medical device products in Canada, with the proposed changes likely to reduce the burden on these companies, lead to costs savings in seeking regulatory approvals, and alter how these companies develop, file and obtain approval in 2026 and beyond:

• Health Canada has released a draft guidance document proposing to change the submission requirements for biosimilar drugs. The proposed changes would no longer require sponsors to provide safety and efficacy data from comparative phase III clinical trials absent "exceptional circumstances".
• Health Canada proposed a Ministerial Reliance Order which would expedite approval of certain drug submissions based on foreign approvals.
• Canada published draft amendments to the Medical Devices Regulations which includes, among other amendments, changes to permit Canadian importers who hold a Medical Devices Establishment Licence (MDEL) to import from other foreign distributors irrespective of whether that foreign distributor holds a MDEL, reducing redundancy in the current law which requires both the Canadian importer and foreign distributor hold a MDEL

Guidance Document Released Intending to Modernize and Expedite Biosimilar Drug Approvals

In June 2025, Health Canada released a guidance document proposing to change the submission requirements for biosimilar drugs. The draft guidance reflects Health Canada's intent to align its drug review process with other jurisdictions and to support more efficient reviews. The consultation period for the draft guidance has now closed and it has not yet been implemented.

The draft guidance applies to "sponsors" who are seeking marketing authorization in Canada for a biosimilar drug based on a "high degree of similarity" to a "Canadian Reference Biologic Drug".

The draft guidance will no longer require sponsors to provide safety and efficacy data from comparative phase III clinical trials absent "exceptional circumstances". Under the existing regulatory framework, sponsors are typically expected to provide data from phase III clinical trials in their submission packages. Phase III clinical trials are costly and time consuming, with a US study finding that phase III clinical trials for biosimilar drugs cost an average of US$20.8 million, have a median treatment duration for enrolled patients of 52 weeks and took 26 months from study start date to completion date.

The draft guidance provides that a sponsor must still establish a "high degree" of similarity to the reference biologic drug in terms of (1) physicochemical characteristics; (2) functional properties; and (3) stability profiles which can "support a possible conclusion of a high degree of similarity for safety and efficacy". The draft guidance provides that the clinical studies included in a biosimilar drug submission "should primarily include a comparative pharmacokinetic study, and if feasible, a comparative evaluation of pharmacodynamics".

This change in the regulatory scheme for biosimilar drug submissions aligns Canada with other jurisdictions such as Europe and the United States which have, recently, reviewed biosimilar products without comparative clinical trial data.

The draft guidance aligns with Health Canada's initiatives to harmonize its regulatory framework. The implementation of the draft guidance is likely to reduce the risk that Canda becomes an outlier jurisdiction with slower and costlier biosimilar development and approval. Additionally, implementation of the draft guidance would accelerate biosimilar regulatory filings and reviews, while reducing the costs and time required for biosimilar development.

New Initiative to Expedite Drug Approval Through Reliance on Trusted Foreign Authorities

In December 2025, Health Canada proposed a Ministerial Reliance Order which would allow Health Canada to expedite review of certain drug submissions by allowing the Minister to deem certain aspects met based on the approval of another trusted jurisdiction.

Manufacturers could only use this pathway if:

• The submission concerns a drug belonging to an identified class of drugs;
• The drug submitted under this pathway has the same medical ingredient(s), strength, dosage form and route of administration as the foreign reference drug; and
• Any differences in the drug related to the part of the submission that the manufacturer seeks to have deemed in comparison to the drug authorized by the trusted foreign authority would not negatively impact its safety or effectiveness.

The order suggests that examples of drug classes that could be added to the list of drugs eligible to use this new regulatory pathway include:

• "drugs that include pediatric conditions of use that are not currently authorized in Canada and/or drugs where a child-friendly format is not authorized in Canada that include pediatric conditions of use;
• drugs for non-food-producing (companion) animal use that are not currently authorized in Canada; and
• drugs for food-producing animals where a product is not authorized in Canada and there is unmet medical need".

The order clarifies that Health Canada will still be involved in examining any differences in the drug submission compared to the foreign approval and explicitly seeks to leverage international collaboration and remove red tape to encourage more efficient reviews. The consultation on the order is now closed.

The order specifies that Health Canada will continue to review and conduct brand name assessments, which cannot be misleading or likely to cause confusion with an existing product authorized for use in Canada. However, outside of Health Canada's brand name assessment, sponsors should also be aware of trademark considerations when selecting a brand name. Recent appellate jurisprudence has confirmed that the brand name of a biosimilar must not be confusing with that of existing products.

In Samsung Bioepis v Novartis AG, 2025 FCA 212, the Federal Court of Appeal held that the brand name of a biosimilar drug (BYOOVIZ) was confusing in view of the brand name of a biologic drug (BEOVU). These products have different active ingredients but are indicated for the same therapy. Although trademark analysis is a fact-specific exercise, this decision offers useful guidance for sponsors in the process of selecting a brand name.

Specifically, the Federal Court of Appeal upheld the lower court's findings that the products had confusing names as they were "indicated for the treatment of the same disease, prescribed to the same patients, and administered in the same manner; would be prescribed and administered by the same doctors; would be sold by the same pharmaceutical wholesalers, distributed by the same pharmacists, stored in the same manner, and handled by the same clinical or hospital staff" and had a degree of resemblance of sound.

Sponsors should therefore be mindful of the brand names of competitive products, both in terms of those with the same active ingredient and those that are for use in treating the same indications.

Canada Amends Medical Device Regulations to Harmonize with Other Jurisdictions and Reduce Redundancy

In November 2025, Canada published draft amendments to the Medical Device Regulations with particular focus on changes to the medical device establishment licence regulatory framework (the MDR Amendments). The proposed amendments will align Canada with other jurisdictions.

The Medical Device Regulations currently requires both foreign distributors and their Canadian importers to hold MDELs, which has been criticized as "creat[ing] a redundancy, an unnecessary burden, and costs, and is not aligned with other jurisdictions". The MDR Amendments would remove the requirement that a Canadian importer who holds a MDEL also import from a foreign distributor who holds a MDEL. With these amendments, Canadian importers who hold a MDEL can import from other foreign distributors irrespective of whether that foreign distributor holds a MDEL and Canadian importers without a MDEL would be required to verify that they are importing from a foreign distributor who holds a MDEL. The draft amendments include other proposed changes such as:

• The requirement that all MDEL applicants provide supplier information with their MDEL application and update this information annually through their annual licence review;
• Importers with an MDEL would no longer need to verify the MDEL status of subsidiary foreign distributors; and
• The number of attestations required by MDEL holders would be reduced as the draft regulation would include explicit provisions reinforcing the existing requirements to maintain documented procedures for safety management activities.

The consultation period for the draft amendments closed on January 17, 2026. The amendments are not yet in force.

If you have further questions about this update or life sciences issues more generally, please contact the authors or a member of the Life Sciences Group.