This article first appeared in Update, Issue 3, May/June 2007.
Reprinted with permission of the Food and Drug Law Institute (FDLI) © 2007.
Canada’s Natural Health Products (NHPs) regime was implemented with the promulgation of the Natural Health Products Regulations (Regulations) on January 1, 2004. NHPs are Canada’s equivalent to dietary supplements in the United States, and include vitamins, minerals and herbs.
NHPs are considered a subset of drugs and were an addition to the scheme under the Canadian Food and Drugs Act, which governs food, drugs, medical devices and cosmetics. Previously, NHPs were not recognized under this legislation and were sold with the tacit approval of Health Canada. The intent behind the regime is to ensure that NHPs available to Canadian consumers were subjected to regulatory scrutiny and proven to be safe. The Natural Health Products Directorate (Directorate) maintains, "Our role is to ensure that Canadians have ready access to natural health products that are safe, effective and of high quality while respecting freedom of choice and philosophical and cultural diversity."
Under the Regulations, NHPs are materials, extracts or isolates of plants, algae, bacteria, fungus or animals; natural or synthetic amino acids, essential fatty acids or certain vitamins; minerals; probiotics; homeopathic or traditional medicines that are manufactured, sold or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state or its symptoms, or for restoring, modifying or correcting organic functions in humans.
The Regulations require that all NHPs be approved by the Directorate in order to receive an NHP license and an NHP number (NPN). No NHP may be sold without an NHP license. The holder of that license has a continuing obligation to monitor all adverse reactions with respect to the NHP, to document these reactions in an annual summary report, and to report to the Ministry of Health all serious adverse reactions in Canada or serious unexpected adverse reactions anywhere in the world. The holder of the NHP license is obligated to maintain records related to the ingredients contained in each lot or batch of the NHP and sufficient information to enable the recall of every lot or batch made available for sale.
Canadian importers must have a site license and they have the onus to provide evidence that imported products come from sites that meet the Canadian Good Manufacturing Practices or equivalent standards. The Canadian importer is responsible for submitting a Quality Assurance Report for each site. Site licenses are issued only to Canadian sites (none are issued to foreign sites). Foreign manufacturers will be covered under the Canadian importer’s site license. Site license holders are required to comply with the specifications submitted in an application for an NHP license, as well as requirements related to recordkeeping, recall reporting, personnel, premises, sanitation programs, quality assurance, stability, operations, sterile products, ophthalmic-use products and lot or batch samples.
A Backlog of Applications
The use of NHPs is steadily on the rise. In 2005, Health Canada reported that due to the ever-increasing interest in the potential health benefits of these products, the proportion of NHP users was 71 percent of the Canadian population, with about 77 percent of Canadians believing that NHPs can be used to maintain or support health.
The vast number of NHPs to be approved is posing a challenge to the relatively young Directorate, which must process thousands of product and site license applications.
In April 2006, the Directorate reported a backlog of over 10,000 product applications and notified industry stakeholders that it would be introducing backlog-reduction measures. It said that it would process only complete product license applications and refuse those deemed incomplete. The Directorate began issuing Notices of Refusal and about 1,900 were removed from the processing queues. The backlog of unprocessed site license applications was 330 in October 2006.
The Directorate makes it clear that manufacturers should not market their products without a valid market authorization (NHP license). A submission number is only proof of the receipt of a complete Product License Application and is not an authorization for sale. However, under the Directorate’s existing policy, Health Canada will focus its compliance efforts on NHPs that have not been issued a submission number or those that have been identified as posing an unacceptable health risk. The product-specific submission number issued by the Directorate is further required to facilitate border entry of imported products. If such information is not provided, products will be detained at Customs, and inspectors will recommend refusal of entry.
As a result, many NHPs are currently on the market in Canada with pending NHP license applications. For manufacturers and importers of NHPs in Canada, the current state of the regulatory process has resulted in a legal quagmire.
Manufacturers of products that were licensed as drugs before the Regulations were enacted have until December 31, 2009, to obtain NHP licenses. Products new to the market after January 1, 2004, require pre-approval before sale.
In the Natural Health Products Compliance Guide, Health Canada outlines its risk-based approach to the enforcement of the NHP regulations, and states that "all NHPs identified as posing an unacceptable risk to the health of Canadians will be removed from sale." An NHP is considered to be noncompliant if it has no valid market authorization (an NHP license) or has such authorization but is otherwise non-compliant with the Regulations. Although any NHP posing a health risk will be subject to enforcement measures, Health Canada has created a category-based compliance strategy. This strategy complements, but is superseded by, the riskbased approach. Compliance deadlines for each product class are staggered from June 1, 2004, to June 1, 2008.
Health Canada considers as its No. 1 priority concern NHPs whose substances and formulations lack any, or adequate, information on their safe use; such lack indicates that their safety and efficacy for medicinal purposes have not been established. Its No. 2 priority comprises isolates, amino acids, fatty acids, concentrated volatile (essential) oils indicated for internal use. Its No. 3 category of prioritization includes algae, bacterial, probiotic, fungal and non-human animal materials because although they generally present less risk than selective concentrates, problems may arise from the application of these products as a result of improper concentration, inadequate ingredient identification or lack of adherence to Good Manufacturing Practices. Its No. 4 priority covers plant, plant materials, extracts prepared by traditional methods and volatile (essential) oils other than those that are concentrated and indicated for internal use because they present less risk than extracts or isolates. Its No. 5 priority includes vitamins and minerals, which are mostly well-known with regard to safe conditions of use as dietary supplements. And its No. 6 and last category of prioritization comprises homeopathic medicines, which are considered to present low risk because most do not contain a material dose of a medicinal ingredient, and standards for product quality are well-established in pharmacopoeia.
For many companies based in Canada and companies based in the United States with products on the Canadian market, the Regulations represented a significant shift in the industry, creating a substantially increased regulatory burden and requiring several changes in company practices. The lengthy license-application processing times and Health Canada’s risk-based approach to compliance creates further challenges for companies seeking to comply with the law while maintaining their presence in the NHP arena in Canada.
For some smaller companies in the industry, the process of attaining a product license is too lengthy and expensive; they have decided, therefore, to ignore the Canadian market altogether. Other large companies have decided to embrace the Regulations and use them to their benefit by gaining market advantage over competitors. Commentators noted, "A perceived market advantage is gained because a company that obtains [an] NPN is able to sell the product with a new health claim before other companies." The NHP license is regarded as beneficial because consumers are likely to prefer a product with an NPN over a product without one. The NHP regime is thus viewed as providing a strategic advantage to larger companies because by complying with the Regulations, a company can maintain its position in the NHP industry and "squeeze others out of the market."
The regulatory landscape is, however, fraught with uncertainty for companies whose NHP license applications are pending. Depending on the type of NHP, the licensing process can take years, by which time a company may have lost its position in the market. Given Health Canada’s risk-based approach to enforcement of the Regulations, many companies decide to enter the Canadian market without an NHP license. Prudent companies attempt to comply as closely as possible with the standards adopted by similar products for which the Directorate has already issued a license. Once the product license application is in the queue and a submission number has been issued, the manufacturer proceeds to market the product in Canada. Some companies push the envelope with respect to new products that may not comply with the standards imposed by the Regulations but face no penalties; this is frustrating to others in the industry that take the high road by adhering to the requirements under the new regime (to the extent they can).
As the Directorate works its way through its seemingly endless backlog of product and site license applications and as enforcement policies become less flexible, it will be interesting to observe how the NHP industry reaction develops and shapes the marketplace for NHPs in Canada. Only then will it be possible to conduct a meaningful assessment of the NHP regime in Canada.
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