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 a timely return for your NPN.
This depends on when your business generates the most revenue for the desired NPN.
For example, sunscreen products typically generate most of their revenue between May and September.
Retail stores particularly food, drug, and mass stores set planograms and orders much earlier to ensure on-shelf presence before the season begins.
Because of this, preplanning is important, starting with a clear timeline for when to apply for an NPN.
In the example of natural sunscreen products (those with titanium dioxide and zinc oxide), these are Class 1 NPNs, so the license is issued in about 10 days.
However, lead times for other factors must be considered, such as label print runs and manufacturing.
Adequate planning ensures products are delivered on time and do not miss key selling months.
Why is this so important?
If an NPN is prepared late, packaging may be completed mid-season and delivery could occur late in the summer.
In this scenario, inventory may become short-dated (sunscreens typically have a shelf life of 1–2 years) or may not sell at all.
This could result in delisting or repeat orders not being placed for the next season, ultimately depreciating your ROI for your NPN.
In the case of a Class 3 NPN, the process can take up to 210 days (7 months) after submission acknowledgement.
This requires a more long-term launch planning strategy.
Some retailers will not begin discussions with a branded company until they have an NPN.
Most natural health products see the majority of their sales between September and February.
Diet and sports nutrition companies see a significant increase in new business during the “New Year’s resolution” period between December and February.
Let’s look at a hypothetical example of a Class 3 NHP starting in 2016.
Here’s how a Canadian launch plan could be mapped out to achieve the fastest NPN issuance and highest revenue:
- 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 represents a best-case situation.
Many upstream factors can impact timelines, such as ingredient safety and efficacy substantiation, formula feasibility, and researching substitute ingredients if one or more ingredients do not meet safety parameters.
These are some of the key areas we review with clients applying for NPNs.
Here are general rules of thumb for when to begin the NPN license process prior to launch:
Class 1 – at least 6 months
Class 2 – at least 7 months
Class 3 – at least 13 months
In each case, if annexing your manufacturer to a Canadian importer site license is required, this process should begin 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 across Canada. Ask us for details or visit our website at www.qualitysmartsolutions.com
FAQs
What is a Natural Product Number (NPN)?
An NPN is an 8-digit license number issued by Health Canada for approved natural health products (NHPs) that confirms the product’s safety, efficacy, and quality.
Why is an NPN required for selling natural health products in Canada?
An NPN is legally required to market and sell natural health products in Canada, ensuring compliance with federal regulations and consumer safety.
What are the key business considerations before applying for an NPN?
Important factors include regulatory compliance, cost of submission, product formulation, target market, manufacturing practices, and long-term business strategy.
How long does it take to receive an NPN from Health Canada?
Timelines vary, but it can typically take between 60 to 210 days depending on the class of submission and the completeness of your application.
What are the different classes of NPN submissions?
Health Canada categorizes submissions as Class I, II, or III, based on product complexity, risk, and the amount of supporting evidence required.
What documentation is needed for an NPN application?
Required documents include a product license application form, evidence for safety and efficacy, label text, and site license information (if applicable).
Can a U.S. or international company apply for an NPN?
Yes, but they must have a Canadian representative or importer and comply with Health Canada’s regulations for market authorization.
What role does a site license play in the NPN process?
A site license is mandatory for manufacturers, packagers, labelers, and importers of NHPs and must be in place before the product is sold.
What are the costs involved in applying for an NPN?
Costs may include regulatory consulting fees, preparation of safety/efficacy data, product testing, and post-licensing compliance costs.
How can Quality Smart Solutions help with the NPN application process?
They offer end-to-end regulatory consulting, including application preparation, submission, strategic planning, and ongoing compliance support.
