Learning how to classify your product correctly is one of the most important first steps when entering the Canadian market. Before you can sell or import any health, beauty, or personal care product, you need to know how it will be regulated. Whether it falls under OTC drugs, natural health products (NHPs), or cosmetics, each category comes with its own set of rules, from licensing and labelling to marketing claims and supporting evidence.

Misclassifying a product can delay your launch, result in costly recalls, or even trigger enforcement action. For example, products classified as drugs may require a Drug Identification Number (DIN) and robust clinical data, while cosmetics typically follow a lighter notification process.

Knowing what counts as a therapeutic claim, how ingredients are evaluated, and which format triggers more scrutiny can save you time and money. Keep reading to learn how to make confident classification decisions and set your product up for success.

Key decision-making criteria

Before determining whether your product is a drug, NHP, or cosmetic, it’s important to assess a few critical factors. These decision points help identify how Health Canada is likely to classify your product. 

1. Intended use and claims

What is the purpose of the product? If you’re making a therapeutic claim such as treating acne or preventing cavities, the product will likely be classified as a drug or NHP. If your claims are limited to enhancing appearance, such as “moisturizes skin,” it may be classified as a cosmetic. 

2. Ingredients and composition

Are there active pharmaceutical or medicinal ingredients involved? Health Canada considers not just the function of an ingredient, but also its concentration and whether it aligns with established monographs or requires evaluation as an active pharmaceutical ingredient (API).

3. Format and route of administration

Is the product a cream, capsule, spray, or tablet? Products taken orally or applied to mucous membranes typically fall under drugs or NHPs. Topical products may span all three categories, depending on use and claims. 

4. Site of action and target audience

Where and how the product works on the body can influence its classification. Intended use in sensitive populations like children, or long-term therapeutic use, often signals the need for drug-level review. 

Over-the-counter (OTC) drug classification in Canada

OTC Drugs are non-prescription products that help consumers manage or prevent common health conditions. These products are regulated by Health Canada as drugs under the Food and Drugs Act and must demonstrate safety, efficacy, and quality. While they do not require a prescription, they must still meet rigorous standards and be supported by solid scientific evidence. 

Key features of OTC drugs 

• Contain active pharmaceutical ingredients (APIs) with known safety profiles 
• Make therapeutic claims such as “relieves pain,” “reduces fever,” or “prevents cavities” 
• Require a Drug Identification Number (DIN) prior to sale in Canada 
• Must comply with Good Manufacturing Practices (GMP) and labelling standards 

Examples of OTC drugs

• Toothpastes with fluoride that prevent cavities 
• Anti-dandruff shampoos with medicated ingredients 
• Antiperspirants that use aluminum-based compounds to reduce sweat 

Natural health product (NHP) classification

NHPs are a distinct category regulated under the Natural Health Products Regulations in Canada. These products contain naturally sourced ingredients and are typically used to maintain or improve health, rather than treat serious diseases. They are available without a prescription and are commonly found in health food stores, pharmacies, and online. 

Each NHP must be approved by Health Canada and receive a Natural Product Number (NPN) before being sold. Claims must reflect general health maintenance or symptom relief, and the product must meet quality, safety, and efficacy standards.  

While the regulatory pathway may be more streamlined than for drugs, NHPs still require proper documentation, compliant labelling, and evidence that supports any health claims. 

Key features of NHPs 

• Contain medicinal ingredients like vitamins, minerals, amino acids, or herbal extracts 
• Claims are limited to general health maintenance, symptom relief, or risk reduction 
• Must obtain a Natural Product Number (NPN) before being sold 
• Regulated under the Natural Health Products Regulations 

Examples

• Melatonin tablets for sleep support 
• Herbal creams for muscle relief 
• Skin-lightening creams with plant-based actives 

Cosmetic classification

Cosmetics are products used to clean, beautify, or enhance appearance without offering any therapeutic benefits. Unlike drugs or NHPs, they are not intended to treat, prevent, or modify bodily functions. Although cosmetics are the least regulated among the three categories, they still need to meet specific safety, labelling, and ingredient standards before being sold in Canada. 

Health Canada requires that all cosmetic products be notified through the Cosmetic Notification Form and comply with the Cosmetic Ingredient Hotlist, which identifies prohibited or restricted substances. While these products do not require a pre-market approval, they must still be safe for use and properly labelled to avoid misleading claims.  

Failing to comply with these requirements can result in enforcement actions, especially if the product inadvertently crosses into therapeutic territory.

Key features of cosmetics 

• Intended for external use on skin, hair, nails, teeth, or mucous membranes 
• Make non-therapeutic claims such as “moisturizes skin” or “freshens breath” 
• Do not require a license or approval before sale, but must be notified to Health Canada 
• Must follow the Cosmetic Ingredient Hotlist for banned or restricted substances 

Examples

• Lipsticks, moisturizers, shampoos, and perfumes 
• Skin creams with cosmetic claims only, depending on ingredients 
• Whitening toothpastes with no therapeutic claims 

Borderline product examples

Some products appear to fit multiple categories depending on their ingredients, claims, and intended use. These are known as borderline products and can be particularly challenging to classify without expert support. A product might seem like a cosmetic based on its format or appearance but could fall into the drug or NHP category if it makes a therapeutic claim or contains active ingredients. 

In these cases, even small changes in wording or formulation can significantly impact regulatory requirements. That’s why it’s essential to understand how Health Canada interprets product intent, composition, and claims when making a classification decision. 

• Sunscreens: Cosmetic in some countries, but classified as drugs or NHPs in Canada due to their active ingredient components and disease-prevention role.
• Anti-dandruff shampoos: Often regulated as drugs because they treat a medical condition.
• Skin-lightening creams: May fall under NHP or drug classification depending on the active ingredient and strength.
• Antiperspirants: Typically classified as drugs due to their effect on body functions.
• Fluoride toothpastes: Considered drugs when cavity prevention is claimed.

What to do if your product is borderline

If you’re unsure how to classify your product, start by reviewing official monographs and guidance documents. You can also submit a Product Classification Request (PCR) to Health Canada for an official ruling.

A regulatory expert can help review your formula and marketing claims to ensure proper classification and avoid delays during the submission process.

Need help classifying your product? 

Quality Smart Solutions helps companies navigate Health Canada’s classification rules for drugs, NHPs, and cosmetics. Whether you are developing a new formula or reviewing existing claims, our regulatory experts are here to help. 

Contact us or fill out the form below to get the guidance you need and ensure your product meets all regulatory requirements in Canada.  

You can also learn more about classification rules directly from Health Canada’s official guidance.