The Health Protection Branch (hpb) of Health Canada has recently undergone considerable policy and organizational renewal, with numerous and broad-ranging implications for the evaluation of drug product safety and efficacy. From a public-health perspective, however, the criteria used to develop organizational and policy change at the hpb have provided a sub-optimal basis for reform, due primarily to the many forms of market failure to which the regulation of pharmaceuticals is subject. For example, thepartnership andefficiency criteria that guided policy renewal have led to the transfer of important responsibilities to partners, with the potential for either a conflict of interest or inadequate information, for which the legal basis is not always clear. The resulting realignment of the hpb's roles and responsibilities may be characterized as leading to a shift from a comprehensive approach to public-health protection to one based on strategic risk management, with responsibilities dispersed among government, industry, academia and consumers. The rebalancing of goals in the redesign of the regulatory process suggests a change in the role of the state in the context of public-health protection and highlights issues of concern to the public interest that may not be fully recognized as deregulation occurs in other sectors of the economy.