Canada's health care system faces growing concerns over potential trade tensions that could disrupt critical supplies. With its dependency on international markets, especially the United States, India, and Europe, for medication ingredients and medical devices, Canada's health care sector is vulnerable to supply chain disturbances. From 2017 to 2022, Canadian medical device exports surged from $3.8 billion to $5.1 billion, highlighting the country's growing role in global markets. However, the looming threat of tariffs between Canada and key trading partners could hinder market access and impact the affordability and accessibility of health care services.
Canada manufactures 44% of its medications but relies heavily on imported ingredients from various countries. Likewise, while its medical device exports have increased, Canada still imports a significant portion of its medical devices from the US, China, Mexico, and Germany. The United States alone accounts for about 40% of these imports. This reliance underscores the intricacies of the North American supply chain for medical technologies, which remains integrated yet susceptible to disruptions from trade wars.
The country's small market size, which represents just 2% of global drug and medical sales, further exacerbates its vulnerability to such disruptions. The "just-in-time" inventory strategy, developed by Toyota and adopted by hospitals to save costs, can lead to stockouts and shortages if supply chains falter. Anthony Dale remarked that the era of hospitals maintaining vast warehouses is over, highlighting the efficiency-focused approach that now risks supply stability.
“Gone are the days of hospitals having massive warehouses.” – Anthony Dale
Health Minister Mark Holland has expressed significant concern about potential shortages in health products and their implications for public health care. The Canadian government plans to address these shortages by requiring manufacturers to report potential shortages in advance. The plan aims to enhance monitoring of crucial supplies and streamline regulatory frameworks, facilitating new manufacturers' entry into the market over the next four years.
“I am concerned about health product shortages and the impact that shortages can have on Canada’s public health care, including for children and families.” – Mark Holland
The post-pandemic period has seen persistent supply chain challenges, with issues becoming more frequent in recent years. The integrated nature of the North American supply chain makes it particularly vulnerable to tariffs from both sides, as Nicole DeKort pointed out. These tariffs could significantly affect market access and healthcare affordability in both Canada and the US.
“The integrated nature of the North American supply chain of medical technologies means that tariffs from both sides of the border will reduce market access and impact the affordability and accessibility of health care in both Canada and the US.” – Nicole DeKort
Raghu Venugopal, a concerned emergency room doctor, voiced his apprehensions over potential trade conflicts. He stressed how detrimental a trade war could be for Canada's publicly funded health care system.
“If Ontarians do not believe a trade war will be bad for our publicly funded health care system, I am here to tell you I am worried sick as an hallway ER doctor.” – Raghu Venugopal
Mina Tadrous also expressed concerns about the repercussions of tariffs on the supply chain, emphasizing the widespread impact such economic measures could provoke.
“There’s a concern here that any sort of tariff war on this space could send ripples throughout the supply chain.” – Mina Tadrous
In response to these challenges, Health Canada's strategic plan seeks to ensure a steady supply of health products through improved regulations and advance warnings from manufacturers about potential shortages. This proactive approach aims to mitigate disruptions and safeguard public health care services.
