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The federal government has again delayed new regulations designed to lower the price of drugs in Canada, after pressure from industry over concerns the rules would affect access to new vaccines.

The new regulations on drug pricing were set to come into force on Friday. On Wednesday, Health Canada informed industry stakeholders it would delay implementing the new rules until July 1, 2021. The department cited the COVID-19 pandemic as a challenge for pharmaceutical companies, and said the longer runway would give them more time to adapt.

It is the second time the implementation has been delayed. It was originally scheduled to come into force on July 1, 2020.

Innovative Medicines Canada, a lobby group that represents drug makers, welcomed the delay.

“The middle of a global pandemic is not the time to implement measures that will distract from the fight against COVID-19,” the group said in a statement, adding that the changes “will also have a negative impact on patients’ access to potentially life-saving medicines and vaccines.”

When asked by The Globe and Mail whether the group was suggesting that pharmaceutical companies would delay bringing COVID-19 vaccines into Canada because of the new regulations, Innovative Medicines Canada said: “If the amended regulations come into force there is no question that companies will be required to evaluate their impact on all new medicines and vaccines, which could in turn lead to more drugs not launching, or delaying their launch in Canada.”

Innovative Medicines Canada said it put forward a counterproposal to the government in October that would lower prices and commit $1-billion to domestic drug manufacturing and rare-disease research, as long as the new regulations do not go through.

A copy of the proposal, which the group shared with The Globe, argues the impact of the new rules on COVID-19 vaccines is “unpredictable” and says a “collaborative path forward” would be for the regulations to be delayed until after the pandemic is over. On a page labelled “next steps to address stakeholder concerns,” the industry group says the government should “continue to collaborate on bringing COVID-19 treatments and vaccines to Canada as rapidly as possible.”

Health Minister Patty Hajdu’s office would not respond on the record to the industry group’s statement. Cole Davidson, press secretary to Ms. Hajdu, said the new regulations will be the most significant reforms to drug pricing in more than 30 years.

Canada has some of the highest prices for prescription drugs in the world, about 25-per-cent more than the median of other Organization for Economic Co-operation and Development countries.

The new rules seek to lower the price of drugs by allowing the regulator, the Patented Medicine Prices Review Board, to adjust which other countries it uses to set a benchmark on prices and to take into account the drug’s cost-effectiveness for patients.

NDP MP Don Davies, his party’s health critic, said he was deeply disappointed by the delay and accused the Liberal government of “caving” to industry pressure.

“This lack of political courage has resulted in millions of Canadians being unable to afford the medication they need, and in many cases patients being unable to access life-saving medication due to pharmaceutical companies withholding access to drugs as a pressure tactic on government,” Mr. Davies said.

The pharmaceutical industry has fought the new rules since they were published in August, 2019, including through a court challenge. In June, a Federal Court judge ruled most of the regulations could go ahead, but struck down a section that would force companies to disclose confidential pricing information. The government and industry groups have appealed and cross-appealed the parts of the decision they disagree with.

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