Officials with the federal health agency will discuss the proposal in a conference call Friday with top health bureaucrats from all the provinces and territories.
"It will clarify that every facility needs to be clearly identified as being under oversight of one of the jurisdictions, be it provincial or federal or pharmacists and so on," a government source said.
The goal is to close the gap between provincial and federal responsibilities over facilities that mix chemotherapy drugs for hospitals, like the one that provided the watered down drugs to five hospitals in Ontario and New Brunswick.
"The proposal would ensure that every facility would fall under a clear oversight — be it federal or provincial — and obviously that's important for patient care," the source said.
Both the Ontario and federal governments have acknowledged that they don't know how many companies like Marchese Hospital Solutions are mixing cancer drugs for hospitals with no oversight.
Too much saline was added to the bags containing cyclophosphamide and gemcitabine, in effect watering down the prescribed drug concentrations by up to 20 per cent. Some patients were taking the drugs for as long as a year.
Health Minister Leona Aglukkaq and Ontario Health Minister Deb Matthews spoke over the phone Thursday about the drug scare, which has raised red flags about the lack of oversight.
Marchese Hospital Solutions fell into a jurisdictional grey area, with Health Canada and the Ontario College of Pharmacists unable to agree on which was responsible for the facility.
Hospitals are responsible for the purchase and security of their drugs. Health Canada regulates and inspects drug manufacturers, while the college is responsible for pharmacists in Ontario, including those who may have been working independently for the company.
But Marchese Hospital Solutions, which was federally incorporated, wasn't considered to be a pharmacy or a drug manufacturer.
The diluted drugs were only discovered when a pharmacy technician at a hospital in Peterborough, Ont., — which had just switched over to Marchese — noticed that the bags were overfilled.
Marchese has said its products weren't defective, and suggested that the problem wasn't how the drugs were prepared but how they were administered at the hospitals.
Matthews has said that she wants to work collaboratively with the federal government to close that gap and she's willing to give the college the authority to oversee companies like Marchese.
But behind closed doors the minister has said she wants the federal government to oversee facilities like Marchese, the source said. But there are major risks to that, since it's still unclear how many there are in Canada.
Before issuing a manufacturing licence, Health Canada would have to stop production at all these facilities while their final products underwent clinical trials.
"You could inadvertently trigger a massive drug shortage across the province," the source said.
"If this is left as a federal-only solution, then it's going to have a real adverse impact on patient care."
Agluqqak is frustrated because companies like Marchese were created under the province's watch as hospitals signed contracts for compounding chemo drugs, the source said.
It's created a market where, to keep costs down, these companies are compounding drugs on a larger scale and selling it to hospitals.
A spokeswoman for Matthews said they'll wait to hear more about any solutions Health Canada offers.
"But we hope that as part of their solution, the federal government will choose to exercise the extensive powers they already currently have under the Food and Drug Act to take action and resolve the current issue," Zita Astravas said in an email Thursday night.
The need for clarity over who's responsible for overseeing companies that are mixing drugs for hospitals is an issue Health Canada has been dealing with for at least a decade.
A 2009 policy paper cited "a need to develop a Canada-wide consistency in approach to ensure that drug compounding and manufacturing are each regulated by the appropriate authorities."
The Conservatives should have moved sooner to close the gap, said Opposition health critic Libby Davies.
"Seventeen months ago the auditor general alerted the Conservatives to problems with drug safety," she said in a statement.
"Why did the minister allow these companies to run with no oversight for so long? Why did it take a crisis impacting cancer patients for the government to take action?"
Matthews has warned that this is an international problem.
Last year, the improper sterilization of steroid shots at a compounding facility in Massachusetts led to an outbreak of fungal meningitis in 20 states that sickened 720 people — 48 of them died.