Canada: A Comment on Canada’s New Natural Health Product Regulations

Last Updated: September 22 2004

Published in Journal of Biolaw & Business, vol. 7, no. 3.

Canada’s Natural Health Product Regulations came into force on January 1, 2004. The extent to which these new regulations will alter Canada’s health regulatory and patent law regime remains to be seen. However, as outlined in this article, regulatory pathway, data protection, patent register and pricing review are a few of the issues that may need to be freshly considered by manufacturers seeking to market medicinal products in Canada.

Introduction

Canada’s framework for the regulation of food and drugs underwent significant change recently, with the introduction, on January 1, 2004, of the Natural Health Product Regulations. These regulations, which were promulgated under Canada’s Food and Drugs Act, introduce to Canadian law the concept of natural health products (NHPs), which have the potential to encompass a wide array of products, including some not typically associated with legislation of this nature.

Although NHPs are "drugs" for the purposes of the Food and Drug Act, they also have a chameleon-like quality, with the potential to demonstrate all, some or none of a drug’s regulatory features. Moreover, the new regime creates the possibility of alternative classification of certain identical products, imposing an additional layer of uncertainty onto the regulatory process.

This article outlines these variable features and discusses the likely behavior of NHPs in four areas that are important to businesses involved in the development, manufacture or sale of drugs: (i) the new drug approval process; (ii) the data exclusivity regime for new drug submissions, which operates to prevent the data submitted to health regulatory authorities from being relied upon by a competitor; (iii) the patent/regulatory law linkage regulations (which provide for a patent register, Canada’s equivalent to the Orange Book), under which generic drug approval can be delayed and potentially refused where certain patents relevant to the drug are registered with Health Canada; and (iv) Canada’s price control regime.

Background

In 1997, the federal Minister of Health directed the House of Commons Standing Committee on Health to, among other things, "consult, analyze and make recommendations regarding the legislative and regulatory regime governing traditional medicines (including, but not limited to, traditional herbal remedies, traditional Chinese, Ayurvedic and Native North American medicines), homeopathic preparations and vitamin and mineral supplements." The Natural Health Product Regulations are, ostensibly, a codification of the Committee’s recommendations. However, to completely understand the new law, we must first look at the framework within which NHPs have been placed.

In Canada, drug approvals and drug prices are governed largely by two separate federal statutes: the Food and Drugs Act and the Patent Act. The Food and Drugs Act is the umbrella legislation that covers foods, drugs, medical devices and cosmetics, and regulates the importation, advertising, use and sale of these items.

The approval to market drugs is the responsibility of Health Canada’s Therapeutic Products Directorate (TPD). Price regulation, however, is governed in part by the Patented Medicine Prices Review Board (PMPRB), which is an entity authorized under the Patent Act and is completely independent of Health Canada.

Moreover, since the Patent Act applies only to patented medicines (the definition of "medicine" adopted by the PMPRB is set out later in this article, under Price Control Implications); drugs without patent protection are beyond the scope of the PMPRB.

Although the Food and Drugs Act sets out important definitions, prohibitions and governing principles regarding use and sale, a significant part of the law on these topics is found in the statute’s subsidiary regulations. For instance, the definition of "medical device" is set out in the Food and Drugs Act, but a large number of the regulatory requirements for medical devices are set out under the Medical Devices Regulations. Similarly, "food" and "drug" are defined in the main statute, but are governed largely by the Food and Drug Regulations.

These legislative definitions serve important gatekeeping functions because the identification of a product as, for example, a food or a drug will subject it to wholly different regulatory considerations. Under the Food and Drugs Act,

"drug" includes any substance or mixture of substances manufactured, sold or represented for use in

(a) the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, in human beings or animals,

(b) restoring, correcting or modifying organic functions in human beings or animals, or

(c) disinfection in premises in which food is manufactured, prepared or kept.

And

"food" includes any article manufactured, sold or represented for use as food or drink for human beings, chewing gum, and any ingredient that may be mixed with food for any purpose whatever.

These definitions make only tangential reference to the intrinsic physical characteristics of a substance or article. Rather, the classification exercise focuses on the product’s purpose or use. Unfortunately, the definition of food is self-referential (a food is a food if it is represented as food) and therefore somewhat unhelpful in this process. Some products can have dual features. Green tea, for instance, can be a food in some circumstances, but can be a drug if it is represented for use (or used) for health-related purposes other than nourishment.

In addition to the definition of drug, there are also drug subclasses. For instance, there are "new drugs," which are defined in the Food and Drug Regulations essentially as drugs that contain a substance or combination of substances that have not been sold in Canada for sufficient time and in sufficient quantity to establish, in Canada, their safety and efficacy for a particular indication, dosage form or route of administration. The Food and Drug Regulations further provide, at C.08.002(1), that "no person shall sell or advertise a new drug unless (a) the manufacturer of the new drug has filed with the Minister a new drug submission or an abbreviated new drug submission relating to the new drug that is satisfactory to the Minister; and (b) the Minister has issued a notice of compliance [i.e., regulatory approval] to the manufacturer of the new drug in respect of the new drug submission or abbreviated new drug submission." A new drug submission is known as an NDS, Canada's equivalent of a U.S. new drug application (NDA).

Finally, the features of certain definitions are not consistent across the regulatory landscape. In particular, the definition of "drug" in the Food and Drug Regulations is not the same as the definition under the Patent Act, which refers to both "drug" and "medicine." The PMPRB also uses the term "medicine," but ascribes its own meaning to that term.

Regarding these different definitions, the Federal Court declared in Novartis v. Minister of Health and the Attorney General that "the regime set out in the Food and Drugs Act and the accompanying Food and Drug Regulations is distinct from, and serves a different purpose than, the regime set out in the Patented Medicines (Notice of Compliance) Regulations [issued under the Patent Act]."1 On the same topic, the Court further declared that the "PMPRB was established pursuant to s-s. 91(1) of the Patent Act. The regime there set out is distinct from, and serves a different purpose than, the regime set out in the Patented Medicines (Notice of Compliance) Regulations." In that case, the Court determined that a drug patch that was regulated by Health Canada as a drug under the Food and Drugs Act, and that was also regulated by the PMPRB could simultaneously be determined not to be a medicine by Health Canada for the purposes of the patent register.

Natural Health Products

It is to this mix that NHPs have been added. Unlike medical devices, cosmetics, foods and drugs, however, NHPs are not mentioned in the Food and Drugs Act. Instead, the operation of NHPs are left entirely to the Natural Health Product Regulations, which are issued under the authority of the Food and Drugs Act. NHPs are the responsibility of a new Health Canada agency, the Natural Health Products Directorate (NHPD).

The definition of "natural health product," like those of "food" and "drug," has a functional component but, uniquely, also has an important substance component (described in more detail below) that serves to limit the choice of materials that may be NHPs. The functional component is very similar to that for drugs, but is limited to humans, and applies to specified substances that are

manufactured, sold or represented for use in

(a) the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state or its symptoms in humans;

(b) restoring or correcting organic functions in humans; or

(c) modifying organic functions in humans, such as modifying those functions in a manner that maintains or promotes health.

The physical component of an NHP must include a substance set out in Schedule 1 to the Natural Health Products Regulations (or a combination of substances in which all the medicinal ingredients are substances set out in Schedule 1), a homeopathic medicine or a traditional medicine. Schedule 1 comprises the following:

  • A plant or a plant material, an alga, a bacterium, a fungus or a non-human animal material;
  • An extract or isolate of any of the above substances, the primary molecular structure of which is identical to that which it had prior to its extraction or isolation; along with synthetic duplicates of these extracts or isolates;
  • Certain vitamins, amino acids and essential fatty acids. along with their synthetic duplicates;
  • Minerals; or
  • Probiotics.

Some products are not classified as NHPs—notably, substances that are administered by puncturing the dermis; prescription drugs;2 and such specific substances as blood and blood derivatives, insulin, interferon and monoclonal antibodies.3

This list of exclusions, and particularly the catch-all prescription exclusion, are intended as safety checks on the new system. According to the Regulatory Impact Statement published with the Natural Health Product Regulations, the original policy intent of these Regulations was "to regulate substances that are safe for over-the-counter use. It was not the intent of the Regulations to take substances off Schedule F [i.e., prescription drugs] or to regulate substances that require a prescription or have a narrow margin of safety."

Finally, note that for the purposes of the Food and Drugs Act, all NHPs are necessarily drugs. The Food and Drug Act applies only to drugs, food, medical devices and cosmetics. Given their specific functional limitation, NHPs cannot be foods (or cosmetics or medical devices).

Selection of Submission Process for New Products

With the introduction of the new natural health products regime, applicants seeking approval for a new health product must consider the above definitions to make sure their application is reviewed by the right agency. In general, it should not be difficult to determine whether a particular drug product should be regulated by the novel NHP regime (managed by the NHPD) or the incumbent "drug" regime (managed by the TPD). For example, it is clear that products expressly excluded from the definition of NHP (such as monoclonal antibodies, or drugs that puncture the dermis) are to be regulated by the TPD. Similarly, certain other products have been specifically identified in the regulations as NHPs (such as folate, niacin and vitamin A)—a clear signal that they are to be regulated by the NHPD.

In other circumstances, however, the proper choice will be less clear. In particular, it may be difficult to know how to proceed with a new application for a product that fits the basic definition of an NHP but that may be subjected to a prescription requirement. It may be also be difficult to know how to proceed with a pending application or for a product that is already on the market.

Consider the hypothetical discovery of a new plant extract or isolate with medicinal properties for which Canadian marketing approval is sought. Should the regulatory application be filed with the NHPD or the TPD?

The NHPD might seem the proper agency with which to file the application if the sole active ingredient is a plant extract or isolate (or synthetic thereof). However, one could simultaneously assert that the TPD is the proper authority, especially if a prescription requirement might be appropriate (drugs sold by prescription cannot generally be NHPs, according to the Natural Health Product Regulations). If during the license application process, regulators decide that the products require a prescription, it is conceivable that the application would be switched, mid-stream, from one agency to the other. Yet the exclusion of prescription drugs under the Natural Health Products Regulations does not refer to a drug that is likely to require a prescription, but to a product that is subject to a prescription. Furthermore, the Natural Health Products Regulations dictate that the Food and Drug Regulations do not apply, except in limited part, to NHPs.4 Prior to the imposition of a prescription requirement, therefore, the applicant may encounter resistance to filing with the TPD, on the grounds that the "new drug" provisions of the Food and Drug Regulations do not apply. In the face of this uncertainty, an applicant may wish to seek a classification ruling from the TPD and the NHPD. However, the extent of the collaboration between the TPD and the NHPD on classification decisions remains to be seen.

Effect of NHP Classification on Data Exclusivity

Canada's Food and Drug Regulations contain a provision for data exclusivity, similar to that contained in U.S. legislation, granting data protection for five years.5 However, since these Regulations do not apply to natural health products, this exclusivity grant might not be triggered by a natural health product application.

Admittedly, this result may be of limited consequence in the ordinary course, given the Federal Court of Canada’s narrow interpretation of the provision. The data exclusivity provision stipulates that where the Minister of Health relies upon data filed by an innovator to support a submission filed by a generic company for an equivalent drug, regulatory approval may not be granted to the generic until five years have elapsed from (i) the date the innovator was granted market approval or (ii) the date the innovator filed the information. The Court has constrained this operation to circumstances in which the Minister of Health physically relies on the innovator’s materials.

Effect of NHP Classification for the Purposes of the Patent Register

Historically, Canada’s patent laws and health regulatory laws have been linked in two ways: through the Patented Medicines (Notice of Compliance) Regulations and through a regulatory approval infringement exemption. Marketing authorization, for instance, cannot be given for a generic drug unless the generic company that seeks to rely on an innovator’s prior approval first demonstrates that the authorization will not result in the infringement of certain patents relevant to the innovator’s drug, which may be listed on the patent register (administered by Health Canada). If the generic company challenges the listing or validity of a patent, the innovator may initiate litigation, which will cause the regulatory application to be stayed for 24 months or until the Federal Court decides the matter, whichever is sooner.6 Now that the Natural Health Product Regulations are in force, manufacturers will need to assess whether the regulatory approval infringement exemption applies to NHPs and whether the filing of an NHP application provides a right to list patents on the patent register.

Price Control Implications

In Canada, patented medicines are subject to price control. Whether a product is regulated by the NHPD as an NHP or by the TPD as a new drug may be of little consequence to the government entity responsible for the prices of patented medicines, the PMBRB.

The applicability of the price control regime, administered by the PMPRB, depends on whether the product has a patent that "pertains to" the medicine. Since "medicine" is not defined in the Patent Act, the PMPRB has adopted the following position, as set out in its Compendium of Policies and Procedures (page 5):

1.5 A medicine is defined as any substance or mixture of substances made by any means—whether produced biologically, chemically or otherwise—that is applied or administered in vivo in humans or in animals to aid in the diagnosis, treatment, mitigation or prevention of disease, symptoms, disorders, abnormal physical states, or modifying organic functions in humans or animals, however administered.

1.6 For greater certainty, this definition includes vaccines, topical preparations, anaesthetics and diagnostic products used in vivo, regardless of delivery mechanism (e.g. transdermally, capsule form, injectable, inhaler, etc.). This definition excludes medical devices, in vitro diagnostic products and disinfectants that are not used in vivo.

Manufacturers of NHPs will need to assess whether NHPs will be regulated by the PMPRB. As an aside, readers unfamiliar with the workings of the PMPRB should be cautious in determining whether a patent pertains to a medicine and whether a particular patent will subject the product to price control. The phrase "pertains to" has been given broad scope, and the PMPRB considers only whether a given patent is "capable of being used," not whether it is in fact being worked. This means that, for example, the PMPRB will assert jurisdiction over a medicine with a Canadian patent for a production method that was never adopted in the making of the commercial product.

Key Points

In the final analysis, classifying a product as a drug regulated by the TPD or as an NHP regulated by the NHPD will usually be straightforward. However, companies seeking marketing authorization in Canada for a new medicinal product whose safety and efficacy has not been demonstrated in Canada should consider the effect of the product’s classification and whether to seek guidance in the form of a classification decision from the TPD and the NHPD.

Footnotes

1. 2002 FCT 1042, aff’d 2003 FCA 299.

2. Natural Health Product Regulations, section 2(2).

3. Also exempted are allergenic substances used for the treatment or diagnosis of allergic or immunological diseases; drugs obtained by recombinant DNA procedures; drugs other than antibiotics prepared from micro-organisms; immunizing agents; substances regulated under the Tobacco Act; substances regulated by the Controlled Drugs and Substances Act; antibiotics prepared from algae, bacterium or fungi, or synthetic duplicates of such an antibiotic. Schedule 2 of the Natural Health Product Regulations contains a precise definition.

4. Natural Health Product Regulations, section 3.

5. Food and Drug Regulations, C.08.004.1(1).

6. On the other hand, the manufacturer of a generic drug need not fear suits for patent infringement during the health regulatory approval process. Section 55.2(1) of the Patent Act provides: "It is not an infringement of a patent for any person to make, construct, use or sell the patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada, a province or country other than Canada that regulates the manufacture, construction, use or sale of any product."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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