In December 2025, Health Canada published new draft guidance documents detailing when and how terms and conditions (T&Cs) may be imposed on drugs pursuant to amendments to the Food and Drug Regulations (FDR). The related FDR amendments will take effect on April 1, 2027. T&Cs can potentially apply to any drug with a drug identification number (DIN) at any point in its lifecycle. In particular, T&Cs can be used to approve promising new drugs for serious diseases that are currently approved under the Notice of Compliance with Conditions policy (NOC/c). The current draft T&C guidance “substantially revised” and replaces a previous draft T&C guidance published in 2022. Health Canada is accepting feedback on the new draft T&C guidance documents until February 10, 2026.

Background

In 2024, Health Canada made wide-ranging amendments to the FDR (our report here). The amendments are intended to reduce regulatory roadblocks as well as make Canada’s regulatory system more agile and consistent with international approaches. The 2024 amendments include provisions that will come into force on April 1, 2027, and will give Health Canada new authorities to impose T&Cs as follows:

  • Broad authority: to impose T&Cs on any drug with a DIN (pursuant to FDR C.01.014.21); and
  • Promising efficacy: to consider T&Cs to approve a new drug for a serious disease where there is an unmet medical need but significant uncertainties about the drug’s efficacy (pursuant to FDR C.08.003.2).

To inform how it will exercise these new T&C authorities, Health Canada announced two new draft guidance documents on December 12, 2025, one applying to each authority: (1) Draft guidance on terms and conditions for human and veterinary drugs (substantially revised over the 2022 draft version); and (2) Draft guidance on human and veterinary drug submissions based on promising evidence and terms and conditions (intended to replace the NOC/c guidance document).

Draft guidance on T&Cs for all drugs

The Draft guidance on terms and conditions for human and veterinary drugs applies to all drugs assigned a DIN, including pharmaceuticals, biologics, and radiopharmaceuticals. It does not apply to natural health products. The draft guidance sets out when and how T&Cs can be imposed.

Applicability: T&Cs can be imposed at any time in a drug’s lifecycle, starting during the review of a new drug submission (NDS) or supplemental NDS (SNDS). Examples of T&Cs include conducting additional studies, verifying impurities, and requiring ongoing risk mitigation or monitoring programs. T&Cs may be imposed to:

  • optimize benefits and manage risks or significant uncertainties (e.g., how clinical trial data relates to the real world);
  • collect information to reduce uncertainties, identify changes (e.g., increased frequency of adverse events), and continually assess risks and benefits; and
  • support manufacturer compliance with pharmacovigilance or risk minimization activities.

For generic or biosimilar drugs whose reference product has T&Cs, Health Canada will determine, on a case-by-case basis, which T&Cs to impose on the generic or biosimilar drug.

Process:  Health Canada will inform the drug’s manufacturer about its intention to impose T&Cs by issuing an anticipatory T&C letter. The manufacturer will generally have 30 days to respond. The manufacturer can object to the proposed T&Cs, including by suggesting different approaches. Alternatively, the manufacturer can accept the T&Cs and propose how they will be met (e.g., study designs). Health Canada will then issue a final T&C letter.  

Health Canada will post information about the T&Cs to its website and may also request progress reports.

Draft guidance on T&Cs for new drugs with promising efficacy

The Draft guidance on human and veterinary drug submissions based on promising evidence and terms and conditions applies to NDSs and SNDSs that address a serious and unmet medical need and that have promising, but uncertain, efficacy evidence. Examples of such evidence include: surrogate markers from clinical studies, phase II clinical studies, and small phase III clinical studies. The draft guidance sets out when and how Health Canada will impose T&Cs to require an additional clinical trial(s) verifying the drug’s efficacy. The guidance, once finalized, will replace Health Canada’s NOC/c guidance document and Policy on terms and conditions for veterinary drugs.

Applicability: The draft guidance applies to an NDS or SNDS for a new drug that (i) treats or prevents a disease that poses “a serious risk of injury to human or animal health,” and (ii) addresses an unmet medical need.  

  • For criterion (i), the draft guidance states that such diseases are “generally associated with morbidity that causes a substantial impact on day-to-day functioning” and does not include conditions that are self-limiting or of short duration.
  • For criterion (ii), the draft guidance states that the new drug should have an indication for which “no drug has been assigned a DIN in Canada” or, where there are drugs approved for the same indication, there should be promising evidence that the new drug is comparatively more effective, less toxic, and/or otherwise benefits patients unable to tolerate or respond to available drugs.

Process: Either Health Canada or the manufacturer can propose that a new drug be approved on the basis of promising efficacy with T&Cs.

If pursued at the manufacturer’s initiative, the manufacturer requests a pre-submission meeting and advance consideration of promising evidence (ACPE) status.  If ACPE status is granted, the manufacturer should file its NDS or SNDS within 60 days and provide the additional information listed in the draft guidance (e.g., complete listing of ongoing clinical trials). Health Canada will then review the NDS or SNDS with accelerated targets, including 200 days for submission review. If ACPE status is denied, the standard 300-day review target will apply.

The process for imposing T&Cs to conduct a confirmatory clinical trial(s) is generally the same as for the broad T&C guidance discussed above. The final T&C letter is issued to the manufacturer with the NOC at the end of review. Health Canada will ask the manufacturer to report on the progress of ongoing confirmatory trials on an annual basis. Human drugs approved with T&Cs must also comply with certain advertising requirements.

Once T&Cs are fulfilled based on results submitted on confirmatory trials, an NOC will issue to confirm removal of the T&Cs.

Manufacturers who fail to fulfill T&Cs, including failure to submit confirmatory trials on time, can be held criminally liable or be required to cease sales.

Consultation on draft guidance documents

Health Canada is accepting feedback on the two draft guidance documents (links here and here) until February 10, 2026.

Links

Health Canada website (December 12, 2025):