The move reverses a 16-year-old Health Canada policy that prevented the unregulated drugs from being used to combat rare illnesses, or slowed their availability.
"Too often, Canadians dealing with rare diseases are faced with difficulties in accessing the information and medication they need," said Health Minister Leona Aglukkaq in announcing the changes.
"Our government will introduce a new approach that will better support the development and authorization of drugs for rare diseases."
Patients in the United States have had access to medications that treat rare disorders since passage of the U.S. Orphan Drug Act in 1983. Since then there have been more than 300 new drugs developed.
But Canadians could access only about half of those drugs, and in many cases several years later than in the U.S.
That means that only about two per cent of the population suffering from such rare disorders received treatments, said Dr. Kym Boycott, a neurogeneticist at the Children's Hospital of Eastern Ontario (CHEO).
Rare disorders are those considered to be seriously debilitating, chronic or even life-threatening that affect very small numbers of people.
There have been some 7,000 rare disorders identified in Canada, affecting anywhere from 1.8 to 2.8 million people.
To aid both patients and researchers in obtaining and sharing information, Health Canada is also launching a database called Orphanet to provide information about where patients can find treatments for rare diseases.
Dr. Paul Lasko with the CIHR Institute of Genetics says the database will help families get the treatments that they are often denied.
"Through this one user-friendly site, these families will now benefit from services such as specialized clinics, medical laboratories, clinical trials, and registries," said Lasko.
Under current policy, doctors can apply through a special access program to get drugs that aren't available in Canada to their patients. But the process is very time consuming.
The Canadian Organization for Rare Disorders (CORD) welcomed Wednesday's announcement, predicting that it will lead to new drug research and encourage provincial drug plans to pay for drugs that treat rare disorders.
"We hope this announcement will stimulate the provinces to work together to develop a national program to review and fund drugs for rare diseases," said the organization's secretary Maureen Smith, who is also a patient with a rare disorder.
Currently, most provinces won't pay for drugs that treat rare diseases, even after they are approved by Health Canada.
The Association of PNH Patients, which advocates for patients with a rare blood disease, calls that "inhumane."
"Our very small group of Canadians living with PNH (paroxysmal nocturnal hemoglobinuria) and their families had to advocate at the most difficult time in our lives for improved access to treatment funding from the provinces," the group said in a statement.
"When patients with a rare disease are extremely ill, it is inhumane that their only choice of action is to plead louder to government than those patients living with more common diseases."
Application of health policy is also inconsistent from one part of the country to another. Ontario, Alberta and British Columbia, for example, have "special pathways" for rare disease drugs while other provinces do not.
New Democrat health critic Libby Davies says that sort of inconsistency is a result of Ottawa moving away from the issue of accessible drug coverage.
"This was a commitment that was made in the 2004 Health Accord, but basically no progress has been made on that because the federal government has just completely fallen off the file," she said.
The new regulations will also open the doors for researchers like those working at CHEO to get drugs to patients more quickly, and to report on the results of treatment, Dr. Boycott predicted.
"The regulatory framework designed to support the development and authorization of drugs to treat rare disorders is a vital addition to our efforts," she said.