Health Canada has the authority to set and charge health product fees under the Food and Drugs Act (FDA). On May 12th, 2023, Health Canada published a proposal with a massive mandatory cost impact for the industry and consumers in the following areas:
- NHPs Annual Right to Sell (RTS)
- NHP Product License Applications (PLA)
- NHP Site License Applications (SLA)
In a CHFA meeting today, industry leaders spoke about how the cost recovery program for NHPs had been pushed out suddenly. The pharmaceutical industry stands to be the major beneficiary so they can sell more drug products. If fewer NHPs can be licensed there will be a greater need for pharmaceuticals. This is because these traditional/non-traditional NHPs are a great way to cut down on the need for the OTC drugs that pharmaceutical companies want to sell by helping consumers’ overall health. In this blog, we’ll break down the proposal’s key points, the industry’s impact, the marketing of NHPs, and NHP approval payments. To fully understand each fee and the new Novel Class III for NHPs buckle up as we dive into the proposal.
As of today, there are 71 days to submit your feedback to Health Canada regarding their proposal.
Pre-market evaluation (EVAL) Fees:
A business must have a current product license to sell NHPs in Canada. There will be three classes of NHPs in Canada for which product licenses can be obtained under this fee plan. The degree to which these classes adhere to pre-approved material (product monographs) distinguishes them.
Health Canada can evaluate a product’s quality, safety, effectiveness, and particular usage requirements thanks to fees for product evaluation. Since the amount of work required to review applications and changes is comparable, we will charge the same rate. Notifications (defined as modifications to NHPs that do not materially affect the product’s safety, effectiveness, or quality, following section 12 of the NHPR) shall not be subject to a fee.
What will be the impact of the cost recovery proposal for small or medium-sized businesses?
As it stands, small and medium-sized Canadian businesses will likely need help to afford the fees. This result may lead to consumers having to purchase non-compliant products from outside of Canada due to the difficulties in licensing. The companies that can continue with Canadian compliance will likely increase their prices for NHPs due to increased costs and a decline in demand.
Annual Right to Sell (NHPs fee)
Companies must pay a yearly fee of $542 per NPN or DIN-HM to be granted the exclusive right to sell their NHPs in Canada. Updating the licensed NHP database can take up to 60 days, according to the specified performance criteria.
The below video provides some insights from the CHFA regarding this proposal.
Health Canada’s Small Businesses slight business fee reduction:
This is an effort by Health Canada to reduce the financial toll on businesses that meet the eligibility criteria:
- One hundred percent for pre-market evaluation fees for the business’s first-ever NHP product submission.
- Fifty percent for pre-market evaluation fees for all subsequent product submissions.
- Twenty-five percent for site license fees and the annual right-to-sell fee.
According to Health Canada, any branch of the federal, provincial, or territory governments and healthcare organizations that receive public financing are exempt from paying a charge for NHPs. This includes any facility that has been granted a license, approval, or designation by a province or territory to treat sick or injured people or animals.
Fee waivers would be possible if performance standards weren’t reached, but they would be limited to 25% of the application fees regardless of how long the delay lasted. A “pause-the-clock” option for regulatory assessments would be available, allowing the performance standard to be suspended under certain conditions. Rejected or withheld applications would not be eligible for fee waivers.
What will be the impact on NHP product licenses in Canada? (Novel Class III)
This proposal is positioned to create a new class of NHPs (Novel Class III), a product with brand-new active substances, active ingredient combinations, uses or purposes, or physical forms. Health Canada’s guidelines suggest that every single NHP application for existing products will have a fee depending on the PLA class. The cost for this new category of NHP applications is $58,332. See Table 1 From Health Canada below.
What will be the impact of this new application class?
The new application suggests that all PLAs that use new health claims, innovative ingredients, or a combination of a unique formula of approved ingredients will be subject to the licensing fees above. Health Canada will clarify whether the price will only be applied to the initial product. After the initial Novel Class III application, the cost could be reduced significantly for subsequent NHPs using the same novel ingredient, health claim, or combo of ingredients. This will put some barriers and risks in place as the number of applications will decrease, with Health Canada expecting only 1% of applications to be categorized as “Novel Class III.”
How will the proposal impact the NHP site license?
NHP site license fees will be charged when reviewing applications and amendments per Table 2. Each new NHP site license application or amendment will also be a fee. The cost will correspond to the priciest category inspected on-site and doesn’t change depending on the number of sites or products. See Table 2 from Health Canada below for pricing information.
It is still being determined how this plan will achieve Health Canada’s stated objective of promoting Canadian consumers’ access to high-quality, safe, and effective NHPs because the proposed levies have the potential to have unexpected consequences. The proposed implementation date that Health Canada submitted is April 1st, 2025. We suggest that you take action on NHP Registration before the new fee goes into effect.
How Quality Smart Solutions can help
At Quality Smart Solutions, we have a team of experts who are skilled in NHP compliance. We offer several solutions to meet your needs like NHPID, Health Claims Substantiation, Clinical Trial Application (CTA), etc. Please contact us today or call us at 1-800-396-5144 to learn about how we can help you.