Canada: Pharmacapsules - February 2005

Last Updated: March 14 2005

Edited by Adrienne Blanchard and Jennifer Wilkie


  • Changes To Compliance Policy For Natural Health Products
  • Unable To Relitigate Issues In Proceeding To Determine Damages
  • Harvard Study Suggests Medical Bills Trigger 46% Of U.S. Personal Bankruptcies
  • Saskatchewan Announces New Plan To Monitor Prescription Drug Use
  • Internet Pharmacies Are Taking Their Business Overseas

Changes To Compliance Policy For Natural Health Products

Recent changes to the compliance policy for natural health products have created a new window of opportunity for industry members. Industry members who missed the priority deadlines can now take steps to avoid enforcement without having to wait for the issuance of a product licence.

The Natural Health Product Regulations (NHP Regulations) require that all natural health products have a product licence to be sold in Canada. However, the Natural Health Products Directorate (NHPD), responsible for administering the NHP Regulations, has issued policies to phase in enforcement against natural health products without a product licence on a priority basis. In a practical sense, this means that certain natural health products without product licences may be sold in the Canadian marketplace without fear of enforcement provided certain steps are taken.

The initial policy divided the enforcement process into six priority categories. The NHPD has indicated that they will not focus on the enforcement of natural health products in a particular category if a product licence application for that product was filed by the fixed deadline for that category. For example, natural health products in the Priority 1 category, which include ingredients listed on the Therapeutic Products Directorate's New Drugs List (available at newdrugs_e.html), can no longer be sold in Canada without a product licence, unless a product licence application was filed prior to July 1, 2004. This marked the implementation of the first phase of compliance procedures.

The Priority 2 category, which had a January 1, 2005 deadline, includes products that contain isolates, amino acids, fatty acids, concentrated volatile (essential) oils indicated for internal use, and extracts other than those prepared by traditional methods, requiring product licences to be filed by that date.

Under the initial enforcement approach, where an industry member missed a priority deadline without submitting a product licence application, they would risk enforcement for having a non-compliant product until they obtained a product licence. This means that if the priority deadline were missed, there would be no opportunity to sell the natural health product until a product licence has been issued by the NHPD, which could take a substantial amount of time.

The revised policy now indicates that the NHPD will not focus on the enforcement of natural health products for which a submission number has been provided. The NHPD issues a submission number to the product licence applicant as confirmation that the NHPD received a full product licence application. This confirmation currently takes several weeks and receipt of the submission number provides no indication as to whether a product licence application will be accepted or rejected by the NHPD. For example, the NHPD will now focus on the enforcement of Priority 1 and Priority 2 products currently on the Canadian market for which no product licence applications have been submitted. However, once a product licence application has been submitted for such a product and the NHPD issues a submission number confirming receipt of a full product licence application, the NHPD will no longer focus on the enforcement of such a product.

The practical result of the policy change is that even following the expiry of an applicable priority deadline, industry members can take steps to avoid the focus of enforcement with respect to a non-compliant product and prior to obtaining a product licence. This is a window of opportunity for members of the industry to work towards bringing their products into compliance with the NHP Regulations and maintaining their position on retail shelves. It should be noted that natural health products that the NHPD deems as posing an unacceptable risk level will be subject to enforcement regardless of their priority listing or whether a product licence application has been submitted.

For more information and advice on regulatory or commercial issues relating to food, drugs, or natural health products, contact Lewis Retik at Gowlings.

Unable To Relitigate Issues In Proceeding To Determine Damages

In a recent decision, the Federal Court of Appeal unanimously held that a generic manufacturer was not allowed to have discovery relating to the alleged "tenuous nature" of a patent during the damages phase of a court proceeding where that patent had already been held valid. The generic company argued that the innovator was not entitled to an accounting of the generic's profits due to the "tenuous nature" of the patent. The Court of Appeal held that this was not relevant to the issue of entitlement to an accounting of profits, and that the generic company was attempting to conduct "wasteful and costly discovery amounting to a fishing expedition."

The innovator argued for increased costs, due to the generic company's abuse of the Court's process. The Court of Appeal stated, "We cannot overlook the delay created by all these proceedings, the lack of merit of the appellant's contentions and the element of defiance involved in the attempt to relitigate conclusively decided issues." The innovator was awarded $12,000 in costs.

Decision available at:

Harvard Study Suggests Medical Bills Trigger 46% Of U.S. Personal Bankruptcies

Based on interviews of 931 of 1,771 people who had declared personal bankruptcy in federal courts in five American states in 2001, a Harvard University study has reported that in 46.2 per cent of cases, illness or medical bills were either the main or a contributing cause. About 75 per cent of those who said medical bills triggered their bankruptcy had insurance coverage at the beginning of their illness.

Further information may be found at:\medical-bankrupt 050202.html

Saskatchewan Announces New Plan To Monitor Prescription Drug Use

Saskatchewan Health recently announced that it has implemented changes to the province's Prescription Drug Plan to help prevent dangerous or inappropriate use of prescription drugs. The revised Plan was modified in response to the recommendations from a coroner's inquest into the death of Darcy Dean Ironchild—a Saskatoon man who died in February 2000 from an overdose of prescription medications. Under the Plan, Saskatchewan Health will collect information for all drug prescriptions filled in the province.

Previously Saskatchewan Health only collected information on prescriptions for those drugs and people covered under the Prescription Drug Plan. Consequently, no information was collected on drugs that are not covered, or on prescriptions for residents whose drugs are paid for by the federal government, such as First Nations residents and veterans.

For more information, please see:

Internet Pharmacies Are Taking Their Business Overseas

Health Minister Ujjal Dosanjh is considering changes to the Food and Drugs Act that will ban "unethical and unprofessional" business practices of Internet pharmacies. The changes could forbid Canadian doctors from cosigning American drug prescriptions without actually seeing the patients, keep pharmacies from accepting those prescriptions, ban prescriptions for certain foreigners, or allow officials to place certain drugs on a "protected list" in case of shortages. In response, Canada's largest Internet pharmacies are taking their business overseas, where countries including Israel, Britain, Ireland and Germany are poised to take a piece from Canada's $1-billion-a-year industry.

For more information, see: BNStory/Technology

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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