Updated October 2019
Current Market Trends
Procurement & Tenders
GDP: USD 1.598 trillion (est. 2016)
Currency: Canadian Dollar (CAD)
Language: English and French
Canada’s mixed public-private healthcare system is comprised of the public sector, which finances healthcare services, and the private sector, which delivers these services. The Canadian healthcare system falls under the jurisdiction of each province and territory. While funding is subsidized through federal transfer payments, the delivery and management of healthcare services are controlled by the provincial governments. As a result, the healthcare system differs by province in terms of structure and operation.
Canada’s healthcare industry is experiencing demand increases resulting from the advance of chronic diseases and an aging population. In 2016, total healthcare expenditures were valued at approximately CDN$228 billion. Healthcare spending in Canada is projected to increase from 2.7 percent to 7.5 percent by 2020. Much of this spending will be toward the three leading causes of death: cardiovascular, cancer and respiratory diseases.
The top five clusters of the Canadian medical industry are based in Alberta, Manitoba, Ontario, Quebec and British Colombia, with specific emphasis on the latter three. Over 80 percent of the medical device industry resides in the provinces of Ontario and Quebec.
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Healthcare Policy Issues
On January 1, 2019, Health Canada transitioned from the Canadian Medical Devices Conformity Assessment System (CMDCAS) to the Medical Device Single Audit Program (MDSAP) for quality management system compliance. All manufacturers of class II, III and IV medical devices sold in Canada are impacted by this change. For manufacturers intending to sell only in Canada, the regulatory requirements of the other MDSAP participant countries (Australia, Brazil, Japan, and the United States) will not be taken into account.
Canada is a leading market for U.S. pharmaceutical exporters and among the top ten pharmaceutical markets globally due to a growing elderly population, high per capita pharmaceutical spending, and an advanced regulatory system. However, the government has proposed new regulations that would lower prices for patented medicines by revising its reference pricing system by, for example, using pharmacoeconomic evaluations, and that would require disclosure of non-public and sensitive pricing agreements. If put in place, these regulations could severely limit patient access to innovative medicine and discourage investment in the market.
Prime Minister Trudeau has said his government is committed to move forward with a national program to extend prescription drug coverage to all Canadians. The 2019 budget earmarked $35 million over four years to create the Canadian Drug Agency that would create a national list for medications that are covered, and it will use its buying power to negotiate lower prices for those drugs on behalf of coverage plans.
Canada's Medical Device Sector
The medical device industry consists of firms that produce a wide range of products used for diagnosis and treatment of ailments, which include the following: medical, surgical and dental equipment (including electro-medical equipment and related software), furniture, supplies and consumables, orthopedic appliances, prosthetics and diagnostic kits, reagent and equipment.
The Canadian medical device industry is highly diversified, making it the ninth largest in the world. The market is sophisticated and mature, with developments in science and healthcare expected to contribute to the industry’s growth in the years ahead. The Canadian medical device industry employs over 35,000 people and is home to approximately 1500 corporate facilities. The industry is comprised of small, medium and large sized facilities. Large companies (100+ employees) represent 43 percent of the industry’s employment.
Health Canada, under the authority of the Food and Drugs Act, regulates the sale of medical devices in Canada. Health Canada is an equivalent regulatory agency to the U.S. Food and Drug Administration (FDA). Medical equipment imports must comply with marking, labeling, and packaging requirements as described in the Food and Drug Act. Instructions (operator’s manual) accompanying the equipment must be in both of Canada’s official languages (English and French).
Medical device manufacturers should develop partnerships with Canadian distributors to sell their products. To do this, they must obtain an establishment license and, if necessary, a device license. Imported medical devices are subject to Canadian safety and effectiveness regulations and packaging requirements. Few other barriers exist for U.S. businesses looking to sell in Canada. Per BMI’s Medical Device Risk/Reward Index (RRI), Canada is one of the most attractive markets in the Americas for commercializing a medical device.
Hospitals and public health institutions are principle buyers of medical equipment and supplies. In 2016, hospitals alone accounted for an estimated 18.2 percent of total sales. However, as more hospitals continue to use Group Purchasing Organizations (GPOs), this will intensify price-based competition. This growing trend will give hospitals sufficient purchasing power to directly source products from manufacturers. Other significant buyers include medical professionals, such as dentists, eye care and other professionals in the nursing homes and residential care facilities. Private clinics and outpatient’s facilities are also experiencing a growing demand for medical equipment including devices, instruments and supplies.
Trade in the medical device market presents several advantages to U.S. firms. U.S. firms benefit from similarities between U.S. and Canadian regulations concerning the safety and quality of medical devices. Other advantages include: the similarity between general business practices, the established reputation of U.S. firms in Canada, and the close geographic proximity to Canada. Partnerships with the provincial and territorial health authorities responsible for the delivery of healthcare services are essential for the importing success of medical devices.
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Rising demand and associated spending are caused by an aging population, the growing incidence of chronic diseases, development of costly clinical innovations, increasing patient awareness, knowledge, and expectations and continued economic uncertainty despite regional pockets of recovery. Industry experts report that the number of adults aged 65 and older, is expected to increase at an annual rate of 3.8 percent over the next five years. By 2021, seniors will comprise 18.7 percent of Canada’s population up from 16.5 percent in 2016. Devices that support the older population, including neurological and cardiovascular products are expected to experience strong sales over the next five years. Industry revenue is expected to grow at an annual rate of 1.8 percent for a total of approximately CDN$21 billion. In addition, the Canadian government is investing in innovations such as precision medicine, artificial intelligence, and data and analytics, to improve care, improve health and reduce spending.
The United States is by far the biggest exporter of medical devices to Canada, accounting for approximately 45 percent of the country’s medical device imports. Other key import sources include Switzerland (13 percent), Germany (8.6 percent), and United Kingdom (5.3 percent).
The Canadian medical device market depends upon imports for about 80 percent of its consumption. The import market is expected to grow at a 4.4 percent rate through 2017. Diagnostic apparatus, orthopedic, prosthetic, patient monitoring and dental equipment are Canada’s top five largest import categories. In 2016, the value of U.S. exports to Canada in these categories were valued at CDN$2.3 billion and Canadian exports to the U.S. were valued at CDN$70 million. The United States is the biggest exporter of medical devices to Canada, with the top five clusters for medical devices in the United States located in Minnesota, Florida, Pennsylvania, New York and California.
Canadian authorities have worked at harmonizing regulations with those of the United States and Europe by listing medical devices in the Medical Device Active License Listing (MDALL). In keeping with international trends, medical devices are regulated under the Food and Drugs Act as Class I (low risk), II, III or IV (high risk) devices, subject to Health Canada approval. All medical devices require an establishment license, and Class II, III and IV devices require a device license. All products are subject to safety and effectiveness requirements, including Class I devices, and these requirements must be satisfied with objective and documented evidence. It is important to conduct regular verification when considering the purchase of a medical device since medical device licenses can be suspended by Health Canada, cancelled during the annual renewal of licenses by Health Canada, or discontinued by the manufacturer.
Pricing & Reimbursement
Pricing and reimbursement decisions in Canada are highly decentralized. Per the International Society for Pharmacoeconomic and Outcomes Research (Ispor), most decisions are made by hospitals, which typically receive global funding for their services. Budgets are allocated to hospitals via geographic or operational health regions or authority in most provinces, and are bound by provincial law.
Regional or national consensus among physicians through professional networks can have a strong influence on decisions to reimburse medical technology.
The Canadian Medical Association maintains a database of around 1,200 Canadian clinical practice guidelines. Further information can be accessed at http://www.cma.ca/cpgs
Health Canada as part of its engagement with the International Medical Devices Regulators Forum is working to align its information requirements for quality management systems with other regulators participating in the forum, in anticipation of one unified set of requirements recognized by Health Canada in late 2017.
Shortcomings in intellectual property protection, particularly a “heightened” utility standard for pharmaceutical products that has led to dozens of patent revocations, is causing operational difficulties for U.S. companies. New regulatory proposals to lower ceiling prices for patented medicines, such as reshuffling the basket of countries that Canada uses for price referencing, using pharmacoeconomic evaluations, and forcing companies to disclose confidential pricing agreements could dramatically shift the market access landscape in Canada.
The Canadian healthcare system falls under the jurisdiction of each province and territory. While funding is subsidized through federal transfer payments, the delivery and management of healthcare services are controlled by the provincial governments. Healthcare systems in Canada use various competitive tendering processes for the procurement of medical devices and diagnostics technologies. These procurement processes depend on the individual province, but are generally conducted by each hospital and depend on the need and resources available to the hospital.
U.S. suppliers looking to export to Canada should refer to the following websites for more information concerning procurement opportunities available in each province:
Provincial Procurement Authorities
Newfoundland and Labrador
Prince Edward Island
Health Canada (https://www.canada.ca/en/health-canada.html)
Federal Healthcare Procurement
Merx: Canadian Public Tenders (http://www.merx.com/)
Canada’s Healthcare Procurement Services Organization
HealthPro Link http://portal.healthprocanada.com/
Government Health Plans (by province)
Québec: Régie de l’Assurance Maladie du Québec
Ontario: Ministry of Health and Long-Term Care
British Columbia: B.C. Health
Manitoba: Manitoba Health, Healthy Living and Seniors
Saskatchewan: eHealth Saskatchewan
Alberta: Alberta Health
New Brunswick: New Brunswick Health
Nova Scotia: Nova Scotia Department of Wellness
Prince Edward Island: Health PEI
Newfoundland & Labrador: Department of Health and Community Services
Yukon: Health & Social Services
Nunavut: Department of Health
Northwest Territories: Health & Social Services
November 6-7, 2017 Location: Toronto, Ontario
The largest healthcare gathering in Canada. It provides a conference program with educational sessions along with an exhibition floor hosting 350 exhibitors showcasing health products, services and technologies. HealthAchieve attracts around 9,000 delegates annually.
For more information, visit: http://www.healthachieve.com/
Pharmed Manufacturing & Outsourcing 2017
November 15, 2017 Location: Mississauga, Ontario
The only Canadian conference dedicated to manufacturing and outsourcing for the pharmaceutical and healthcare industries
For more information, visit: https://www.pharmedoutsourcing.ca/
May 27-30, 2018 Location: Vancouver, Canada
e-Health offers proactive top-quality learning, opportunities to network directly with organizations members of the health informatics community that value quality health information as well as effective integrated system solutions. Since its inception, the Conference has attracted a steadily increasing attendance, now upwards of 1,500+ delegates.
For more information, visit: http://www.e-healthconference.com
Q: What are the distribution channels in Canada for medical devices?
A:Once the product is approved by Health Canada, distributors and Group Purchasing Organizations (GPOs) are the recommended distribution channels for the Canadian market.
Q: Do I need to hire a consultant to expedite the registration process with Health Canada?
A: No, the registration process highlighted on the Health Canada website (https://www.canada.ca/en/health-canada/services/drugs-health-products/medical-devices/application-information.html) is self-explanatory and easy to follow. However, if there are complications, U.S. companies may wish to hire a consultant.
Q: Does my documentation need to be in English and in French for the Canadian market?
A: Yes, Canada is a bilingual country. So, the labeling and packaging information must be in both official languages with special attention given to the Province of Quebec (https://www.canada.ca/en/health-canada/services/drugs-health-products/medical-devices/application-information/guidance-documents/guidance-labelling-medical-devices-including-vitro-diagnostic-devices-appendices.html#a24
Canada's top five largest import categories:
Industry sources indicate that in 2017 the Canadian medical device market will be valued at approximately USD$3.6 billion. Average growth rate is expected to be between 1.5-2 percent in the coming year.
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14% increase each year
U.S. Commercial Service Contact Information
Name: Connie Irrera
Position: Health Sector Specialist
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