Drug shortages across Canada may have been caused by the bulk purchasing of pharmaceutical products in an attempt to save money, according to Health Canada doctors.

Canada-based pharmaceutical company Sandoz has been forced to stop production of drugs including morphine, hydromorphone and fentanyl while it upgraded its production facility after US Food and Drug Administration safety concerns.

Whilst the company knew about the slump in production late last year, Alberta Health Services was not informed until mid-February 2012, and now doctors across Canada have been forced to find drug supplies elsewhere.

A fire at the Sandoz plant on Sunday exacerbated the situation, closing the plant for at least one week.

Health Canada biologic and genetic therapies director general Dr Robert Cushman told the Edmonton Journal that the problems have arisen because of bulk contracts awarded to Sandoz, causing a national problem now that its supply line has been disrupted.

"One of the problems is the industry is so concentrated in Canada with a small market – much smaller than in Europe and the United States – that companies leave the market because, in these bulk purchasing arrangements, one company, in this case Sandoz, gets pretty much all the contracts for the country," said Cushman.

Health Canada is in daily talks with Sandoz and provincial health departments in order to find a solution, with the Canadian federal government and Sandoz contacting companies in Germany about the possibility of increasing production to meet demand in Canada.