Just a little background information first before I talk about the business aspect of capitalizing on your NPN. NPN stands for Natural Product Number. It is a license that is issued by Health Canada and required for a dietary supplement (the term used in Canada is Natural Health Product) to legally be sold in Canada. The NPN is required to have at least one health claim associated with the license. Obtaining a license can take 10 days to 210 days depending on the product ingredients and whether they are within the scope of Natural Health Product (NHP) Monographs (class 1 or 2 NHPs) or not (Class 3).
Timing is crucial to get the highest ROI and timely return for your NPN. This will depend on when your business generates the most revenue for the desired NPN. For example, sunscreen products would typically generate most of their revenue between the summer months, May to September. Retail stores (particularly food, drug, mass stores) set their planograms and orders much earlier to ensure on-shelf presence in advance of the season start so preplanning is important, starting with a timeline when to apply for an NPN. In this example of natural sunscreen products (those with titanium dioxide and zinc oxide) these are class 1 NPNs so license is issued in 10 days. Based on lead times of various other factors (label print run, manufacturing) a reasonable time should be considered to start the process to deliver on time and not miss those key selling months. Why is this so important? If an NPN were prepared late, packaging completed mid season and delivery of packaged goods late in the summer, in this example, there could be inventory sitting that becomes short dated (in this sunscreens example, shelf life is1 to 2 years) or worse, doesn’t sell, possibly delisting or repeat orders not placed for the next season thereby depreciating your ROI for your NPN!
In the case with a class 3 NPN, that could take up to 210 days (7 months) after submission acknowledgement, a more long term planning launch strategy is needed. Some retailers, for example, won’t begin dialogue with a branded company until they have an NPN. Most natural health products see most of their sales between September to February. Diet and Sports Nutrition companies see a significant portion of new business in the “new years resolution period” between December to February. Let’s look at a hypothetical example, of a class 3 NHP that would start in 2016. Here’s how a Canadian launch planning could be mapped out to gain the most revenue and the soonest to NPN issuance:
- August 2016 – begin on a class 3 NHP application
- Mid August/early September 2016 – submit class 3 NHP application
- mid September/Early October 2016 – acknowledgement letter of class 3 NHP submission indicating that it will take up to 180 days, 30 days after the date of the letter (total 210 days) to meet the performance target to obtain an NPN
- April 2017 – if you are a foreign company and manufacturing, shipping finished product from outside of Canada your manufacturer, labeller and packager have to be annexed to a Canadian importer. This process can take 30 to 90 days for approval
- May 2017 – latest when the class 3 NHP will be issued an NPN (based on an October acknowledgement letter receipt). Safe now to schedule the manufacturing of approved NPN product.
- Mid May/early June 2017 – bilingual compliant NHP label ready to print
- Late June/early July 2017 – printed packaging ready
- June to August 2017 – manufacturing of approved NPN product (based on manufacturer lead time which is dependent on raw material availability, seasonality peaks, line time queue from other manufacturer clients). Typical lead time of manufacturers is 4 to 12 weeks.
- Mid August – ship to retail or warehouse
- September 2017 – Product launch
This scenario is a best case situation. There are many factors that come into play upstream such as ingredient safety and efficacy substantiation, formula feasibility, researching substitute ingredients if one or more ingredient in the original formula aren’t meeting safety parameters and other considerations (these are some areas we look at with our clients applying for NPNs).
Here are general rules of thumb when to begin the NPN license process prior to launch date:
Class 1 – at least 6 months
Class 2 – at least 7 months
Class 3 – at least 13 months
In each of these cases, if annexing your manufacturer to a Canadian importer site license is required, this should start at least 5 months before product launch.
If you have any questions we are happy to help. Feel free to contact us.
Quality Smart Solutions is an end-to-end compliance solutions expert helping clients for 10 years in the areas of Dietary Supplements/NHPs, Foods, Cosmetics, Medical Devices and OTC drugs.
Our business development solution division, Quality IMPORT Solutions, can act as your Dietary Supplement Importer into the Canadian market and connect you with reputable brokers and distributors that cover the Canadian market from coast-to-coast. Ask us for details or visit our website at www.qualitysmartsolutions.com
