Sales of medical devices and supplies to the Canadian market can mean big business for U.S. manufacturers. Consider for example, that 75% of medical devices used in Canada are imported. Of that amount, 44% come from the United States. Similarly, U.S. companies account for almost 70% of reagents used in laboratories across Canada, and nearly 30% of pharmaceutical imports.
U.S. manufacturers will find demand for just about every type of medical product. This is especially true as Canada faces a trio of healthcare-related realities that include:
- An aging population that is driving demand for healthcare services. A 2021 report by the Fraser Institute found the country’s seniors (aged 65+) will account for 23.4% of the overall population by 2040. This population shift will come at a cost, with the typical senior citizen accruing health care costs of roughly $12,000 per year, versus $2,700 for non-seniors.
- A continued impact from COVID-19. This includes not only the virus itself which is still prevalent, but an increase in the number of adult Canadians who have developed chronic conditions as the result of unhealthy lifestyle choices made during pandemic-related lockdowns.
- A concerted effort by the Canadian government to shift procurement away from offshore manufacturers and suppliers in favor of companies located closer to home. This initiative is a “lesson learned” from the country’s experience during the pandemic. Canada’s reliance on China as a single-source supplier of critical medical supplies proved vulnerable to unexpected disruptions, and the government was unable to meet demand for personal protective equipment, ventilators, oximeters, and other supplies in the early stages of the pandemic.
As welcoming and as potentially lucrative as the Canadian market may be, U.S. companies must understand that operating in Canada is not the same as selling within the United States. A company must do its homework and appreciate the nuances of operating in the Canadian market. For one thing, selling medical supplies to Canadian hospitals and healthcare facilities essentially means selling to 13 different health systems. That’s because each province and territory (10 provinces and 3 territories) manages its own health insurance program, health system, and procurement practices. Policies and procedures vary from one province/territory to the next which can be a challenge for businesses that supply multiple entities.
There is also a different regulatory body, of course, with Health Canada having primary responsibility for regulating medical supplies sold in Canada. And a U.S. business must successfully navigate the customs clearance process which includes U.S. export requirements as well as Canadian import protocols.
Beyond these core requirements, businesses must also understand the differences in Canada’s logistics processes, and the limitations of many transportation providers. Shippers of medical devices and related products must pay close attention, since their shipments often require special handling, precise delivery requirements, and even dangerous goods processing. Failure to take these differences into account can seriously affect a company’s ability to succeed in the Canadian market.
Which is why a bit of due diligence can go a long way to ensure medical shipments arrive safely, on-time, and in full compliance with all Canadian customs and medical compliance requirements. Below are 4 best practices tips that can help you ship medical devices and supplies with confidence.
1. Understand the unique characteristics of Canadian logistics practices.
Canada is a very large country in terms of geographic size, but relatively small based on its population. Canada is the second largest country in the world based on area (Russia is first, the United States is third), and its population of 38 million people make it the world’s 40th largest. To put this in perspective, imagine the population of California as the sole inhabitants of the United States.
Most of Canada’s population, about 70% — live within 100 kilometres of the border, and are serviced by multiple ground transportation providers, air services, and even rail companies. But residents and businesses located in rural and remote regions of the country can be quite difficult to reach for some logistics providers. In some instances, communities are not accessible via highway, and rely on air service, local maritime companies, off-road vehicles, and weather permitting – ice roads.
Most Canadian logistics companies limit service to geographic regions, rather than providing a comprehensive nationwide service. This can present challenges for U.S. companies with customers located throughout the country. A medical device company with shipments heading to say 6 or 8 different provinces may need to enlist 6 or 8 different transportation providers such as 3PLs or small, minimal asset-owned courier companies to deliver those shipments. Relying on a patchwork of local companies opens the door to several unwelcome scenarios including:
- Loss of overall visibility.
- Inconsistency of service from one provider to the next.
- Uncertainty about each provider’s capabilities.
- Increased risk of damage and theft. Shipment transfers increase the number of shipment touches, which in turn increases opportunities for damage or theft.
- Overall chaos and inefficiency.
Choose a logistics company that services all of Canada. Enlist a trusted logistics company that does provide comprehensive service across Canada. Purolator for example, provides in-network coverage to all provinces and territories, with guaranteed service to 100% of all Canadian postal codes. By entrusting all Canadian shipments to a single company, businesses achieve clear benefits that include:
- Enhanced visibility. Since shipments remain within the single logistics provider’s network, businesses have uninterrupted visibility and tracking capability as shipments move through their transit cycle. Businesses often lose this critical capability when shipments are transferred from one logistics provider to another.
- Greater accountability. With one company in charge of all shipments, that company will be fully accountable for ensuring shipments arrive on time, according to plan.
- Improved efficiency. A single-source provider will allow peace of mind that shipments will arrive on-time, undamaged, and in accordance with specific delivery requirements.
- Flexibility. A single-source provider will have a “big picture” understanding of a medical device company’s overall operations in the Canadian market and be able to recommend options to improve productivity. It might make sense, for example, to fly shipments from Ontario to British Columbia, rather than move them by truck. A premium single-source provider would have the resources to offer multiple, flexible shipping options and healthcare shipping solutions, whereas regional providers are often severely limited in their capabilities.
2. Transit time is a critical differentiator. Insist on a cross-border delivery solution that guarantees on-time deliveries.
- Excessive transit time. U.S. companies can be shocked to receive estimates of 7-10 days for deliveries to the Canadian market. Given the close proximity of the two countries, it’s not unreasonable for a shipping manager to assume that transit times to Canada will mirror those of shipments traveling within the United States. For U.S. medical device companies competing against Canadian counterparts, and trying to meet strict delivery windows, a 7–10-day window is simply unworkable.
- Most U.S. logistics companies have limited capabilities in Canada. The 7–10-day transit time estimate stems from the fact that most U.S. transportation companies do not offer extensive services in the Canadian market. Instead, shipments are transported to the Canadian border and then handed off to a Canadian provider. And, as mentioned above, if shipments are headed to different regions of Canada, chances are shipments will be farmed out to multiple providers.
- Time-wasting hand-offs and downtime. These transfers take time. In many instances, shipments are diverted to distribution centres located hundreds of miles off-route and sit idle until a scheduled truck can continue on its route.
- Insist on a logistics provider that offers end-to-end cross-border service. This is another core Purolator offering that allows several large U.S. medical device companies to meet Canadian shipping expectations. Shipments enter the Purolator network in the United States and remain in network until final delivery in Canada.
- Consolidated ground service. Shipment consolidation can be a very effective solution for improving transit time, managing costs, and achieving all-around enhanced efficiency. Here’s how it works:
- After pickup in the United States, Canada-bound shipments are combined into a single unit and travel directly to the border. Since no additional pickups or distribution centre stopovers are scheduled, the consolidated shipment often arrives at the border on the same day as its U.S. pickup.
- Shipments clear customs as a single entry, which allows shippers to benefit from reduced filing fees, and a faster clearance process.
- Once in Canada, shipments are broken down and immediately enter Purolator’s courier network for final delivery.
- Shippers can choose from a range of delivery options, including time-specific next-day services, and other options for less urgent delivery needs.
- Mission Critical solutions. As the name implies, Mission Critical capabilities ensure the fastest service possible for time-sensitive or highly fragile shipments. Different air options include “next flight out,” air charter, or transport via a regularly scheduled flight. In many instances, companies build a “hybrid” solution in which shipments travel via air into Canada, and then rely on courier service for final delivery. The hybrid approach is particularly helpful for deliveries to rural and remote hospitals and healthcare facilities, not accessible via major highways. Mission critical services also include ground options, whereby shipments travel non-stop with two drivers working in shifts.
3. Beyond fast service, medical shipments have specific delivery needs. Make sure your logistics company has the required capabilities.
- Pressure to reduce costs. Similar to the United States, Canada’s healthcare system is under significant pressure to reduce costs and has implemented fundamental changes in all sectors, including procurement practices and supplier requirements. This includes a shift to leaner inventories and fundamental changes in where healthcare services are provided.
- Facility-specific delivery requirements. As a result, medical device suppliers must accommodate strict requirements imposed by hospitals, surgical centres, physicians’ offices, long-term care facilities, pharmacies, and other facilities that treat patients. This means suppliers servicing the Canadian market must have core logistics competencies that include:
- Reliable and consistent service. Shipments are often required to arrive within a narrow window of time. Hospitals, surgical centres, and long-term care facilities no longer maintain inventory stockpiles, and instead rely on regular replenishments to meet each day’s requirements. In some instances, multiple deliveries are required each day.
- Omni-channel capabilities that accommodate both B2B deliveries to health facilities, and deliveries to consumers’ homes. Advanced device capabilities now allow many patients to manage chronic conditions and surgical rehabilitations from their homes, thereby avoiding costly in-patient stays and doctor’s office visits. This means deliveries to patients’ homes, including apartments, rehab centres, and other types of multi-unit facilities.
- Special delivery accommodations. Medical facilities increasingly require deliveries to specific locations, including use of a specific door, or to a specific area within a hospital or care facility.
- Technology-based solutions that ensure real-time visibility and tracking.
- Hold for Pick up locations/regional access points. Healthcare professionals who provide in-home visits, or who rotate among various community clinics must have daily access to the materials they will need for each day’s scheduled visits.
Special services within Canada for medical device shipments
Once in Canada, shipments benefit from customized Purolator capabilities that include:
- Dangerous Goods (DG) Protocols: Specially-trained DG specialists follow Purolator’s strict set of procedures designed to prevent shipment damage and attrition.
- Chain of Signature: Packages that require multiple signatures are closely monitored as they move through their transportation routes.
- Adult Signature Requirements. Necessary adult signatures are obtained for packages requiring this extra level of care.
- Mobile App Tracking. Shippers can monitor pickups and shipment tracking from the convenience of a mobile device.
- Special Handling: Products that require unique packaging solutions receive the same high level of care and processing as shipments that meet standard specifications. In addition, Purolator specialists can inspect, install, and configure specific products.
4. Don’t overlook medical device packaging and shipping requirements.
According to the World Health Organization (WHO), more than 2 million different types of medical devices are produced worldwide, and categorized into more than 7,000 generic device groups.
Naturally, not all medical devices will have the same shipping requirements. Many products – bandages and surgical gloves — will trigger few if any special handling requirements. Others though, may need to travel in a temperature-sensitive environment, require special shock absorbent packaging, or qualify as a “dangerous good” subject to Transport Canada requirements.
In building a “best practice,” key considerations must include:
- Labeling requirements. Medical devices sold in Canada must meet specific labeling requirements as required by Health Canada’s Food and Drugs Act, and Medical Devices Regulations. While many of these provisions mirror U.S. Food and Drug Administration regulations for sales within the United States, there are several that are unique to the Canadian market. A few examples include:
- Language requirements: Certain information, including labels and directions for use, must be supplied in both English and French. This is to accommodate Canada’s status as a bilingual country, with both English and French recognized as official languages.
- Temperature information. Temperature-sensitive devices must provide storage requirements, with temperatures listed in degrees Celsius.
- Dangerous goods. Certain medical devices qualify as “dangerous goods,” and must comply with Transport Canada requirements for safe and efficient handling and transport. This includes medical equipment powered by batteries, oxygen cylinders, medical thermometers that contain mercury, and biological samples and specimens, to name a few. Among other requirements, a device company must ensure that its logistics company is certified by the Canadian government to transport dangerous goods.
- Packaging integrity. Although it may sound obvious, it’s important to ensure that products are placed in or packaged on pallets appropriately to ensure stability and safety throughout transit. This can range from the use of peel packs to prevent dust and dirt from affecting products such as surgical instruments, to customized packaging for complex machinery and weather-resistant packaging for deliveries left at patients’ homes.
- Technology-Based Temperature Control and Damage Prevention. New technology-based tools help ensure shipment safety by providing regular updates about key metrics including shipment temperature, or the impact of prolonged vibration or sudden impacts. An innovative logistics provider will ensure that “state of the art” technology is in place including:
- Impact sensors which are placed inside of a package or carton and send an alert if a package is exposed to a potentially damaging impact during transit. The sensor will record the time and date the incident occurred, and signal the violation either via a flashing alarm or by turning bright red.
- Shock loggers are “the next step up” in shipment monitoring and offer accurate event data recording (EDR) with shock, vibration, tilt & roll and temperature and humidity recording.
- Special handling. Certain products require special services including chain of custody with all hand-offs carefully recorded and documented. Establishing a careful chain of signature is important in determining accountability should a problem arise, including shipment damage or theft. The easiest way to establish a chain of custody is to ensure shipments remain in the control of a single transportation provider for the entire duration of the shipping cycle. This ensures consistency of handling and minimizes the number of touches that occur during the transit process.
Optimistic Outlook for Canadian Device Market – But Logistics Planning is Essential!
According to the U.S. International Trade Administration, imports account for nearly 75% of Canada’s medical device market. U.S. manufacturers account for 45% of total imports. While 45% is certainly impressive, it’s an amount that is likely to increase in coming years as Canada looks to bring its supplier network closer to home, while also accommodating an aging population and a resulting demand for more healthcare services.
U.S. manufacturers will, of course, be ready. But integral to their success will be an understanding of the fundamentals of the Canadian market, and the need for a best practices-based, Canada-specific logistics strategy.