If you have been involved in the NHP sector in any capacity over the years since the Natural Health Product Regulations came into force (2004), you’re likely aware that all NHPs must be approved by Health Canada before they can be sold legally in Canada.
To gain approval, companies must submit a Product Licence Application (PLA). Historically, there was no fee associated with this application, nor were there fees for site license holders to maintain the right to import/manufacture these products. Companies, or the stakeholders submitting on their behalf, could submit their PLA for free.
According to recent talks, this is about to change.
What is cost recovery, and why impose it on the NHP industry?
Health Canada has been imposing fees for manufacturers of products that are classified and regulated as drugs since 1995. This is a strategy known as cost recovery.
Currently are 3 types of fees that apply to drug products:
- Annual fee, Authority to Sell Drug Fees, applicable for all products for which the manufacturer holds a DIN (Drug Identification Number)
- Drug Evaluation Fees to process DIN applications, which must be paid before products are sold
- Annual Establishment Licensing Fees for not just manufacturers but packagers, labellers, importers, distributors, wholesalers, and testing laboratories that respect GMP standards (not retailers)
According to a report by the HESA, the Standing Committee on Health of the House of Commons of Canada, the Committee recommended that Health Canada review and amend the above fees order to include NHP Product Licence Applications.
The committee stated that the NHP industry “must participate in the cost of public services to enhance the safety, quality, and image of its products on the market.”
On Friday, May 12, Health Canada released an overview of the proposed fees. They have set a proposed implementation date of April 1, 2025 and the policy includes mandatory fees for NHP Product License Applications, Annual Right to Sell NHPs, and NHP Site License Applications.
What are the concerns with cost recovery for NHPs?
The biggest concerns with the possibility of NHP cost recovery are:
1.
That NHPs will be less readily available (due to the higher barrier of entry for industry)
2.
That cost recovery could cause small companies to go out of business
3.
That potentially higher prices will being passed on to consumers, limiting the access to NHPs
How much could it cost companies submitting PLAs (Product Licence Applications)?
The proposed fees for NHP cost recovery are causing quite the stir within industry members. The timelines to review have also been proposed and they are longer than the current service standards.
Here is a summary of proposed product license fees and performance standards.
| Fee line/category | Proposed fee amount (2025) ($CAD) | Existing performance standard (calendar days) | Proposed performance standard (calendar days) |
|---|---|---|---|
| Class I application or amendment | $1,124 | 60 | 60 to review application/amendment |
| Class II application or amendment | $2,761 | 90 | 120 to review application/amendment |
| Class III application or amendment | $7,209 | 210 | 210 to review application/amendment |
| Class III novel application | $58,332 | 210 (if treated as a Class III) | 300 to review application |
| Class III novel safety and efficacy amendment | $23,333 | 210 (if treated as a Class III) | 210 to review amendment |
| Class III novel quality amendment | $8,750 | 210 (if treated as a Class III) | 210 to review amendment |
| Annual NHP right to sell (per NPN or DIN-HM) |
$542 for each NPN | - | 60 days to update the Licensed NHP database |
In addition to this, there are proposed fees for site license applications, amendments and renewals, summarized below.
| Fee line/category | Proposed fee amount (2025) ($CAD) | Existing performance standard (calendar days) | Proposed performance standard (calendar days) |
|---|---|---|---|
| SL application or amendment | $4,784 | 30 to 90 | 180 to review application/amendment |
| Annual SL – manufacturing – sterile dosage form |
$40,071 | 30 to 90 (for renewals) | 90 to review licence renewal application or confirm licence information |
| Annual SL – manufacturing – non-sterile dosage form |
$23,071 | ||
| Annual SL - importation | $20,035 | ||
| Annual SL - packaging | $7,650 | ||
| Annual SL - labelling | $6,921 |
How are brands responding?
Members of the NHP sector are concerned that these fees put them at a disadvantage compared to American dietary supplement companies who do not have any fees.
Some industry members pointed out the DIN fees for pharmaceuticals as being a percentage of gross sales. The preference among industry seems to be that they would prefer fees based on certain services, not gross sales, if this change is implemented for NHPs.
The proposed fees are significant, and we anticipate quite a pushback from industry over the consultation period which is open from now until July 26, 2023. Small and mediums-sized businesses may not be able to manage these costs and stay viable in the Canadian market.
What’s the impact on the NHP industry?
The key point NHP brands and manufacturers should know is that until action is taken by Health Canada, there are currently no fees required to submit your PLA.
Therefore, the sooner you can submit your PLA, the more likely you can avoid paying a fee to do so!
Our team has in-depth expertise in NHP regulatory consulting and are tapped in to the latest changes in legislation. Let us take the burden off your team so we can help you launch your NHP in Canada quickly and compliantly!
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