Proposed fees for natural health products: Framework

On this page

• Introduction
• Cost recovery for natural health products
• CESD report on natural health products
• Natural health product regulatory program

Introduction

Health Canada relies solely on public funding to fund our regulatory activities relating to natural health products (NHPs). Regulatory services for other health products are funded through a mix of service fees and public funding.

We have been charging fees for other health products such as drugs and medical devices since the 1990s. The fee structure has 3 main categories:

• Pre-market evaluation (EVAL) fees to assess and license new products entering the Canadian market or to amend existing products
• Site licence (SL) fees to assess and license facilities that manufacture, import, label or package health products
• referred to as establishment licences in the regulation of drugs and medical devices (the framework upon which NHP fees are based)
• Right to sell (RTS) fees to allow companies to sell their products in Canada and help recover some of the costs for post-market surveillance and regulatory compliance and enforcement activities

In 2017, the Government of Canada introduced the Service Fees Act(SFA), which replaced the 2004 User Fees Act. The SFA established a requirement for an annual fee report to be tabled in Parliament and introduced mandatory fee remissions, annual fee adjustments and fee performance standards. This act also increased transparency, accountability and predictability for the fees charged by the federal government.

At the same time, the Minister of Health was granted authority to fix fees under the FDA. These fees are exempt from the SFA, but mirror many of its provisions. In 2020, the Minister exercised this authority to update most fees for drugs and medical devices.

The current fee proposal expands on that fee framework to include NHPs. This is the only health product line for which we do not charge fees.

Cost recovery for natural health products

Health Canada is proposing fees for NHP regulatory activities to recover a portion of the costs of our regulatory activities and to support improvements to the NHP program. These improvements include:

• limiting applications for hypothetical NHPs
• for instance, those that are unlikely to be marketed
• increasing predictability of regulatory services for industry

Health Canada will be accountable via fee remissions for unmet performance standards.

The fee revenues will allow us to strengthen our oversight of NHPs, monitor labelling and advertising, and put in place a permanent inspection program. The increased resources provided by fees will also help us improve our ability to:

• detect and respond to quality issues
• address issues of non-compliance for unlicensed products
• prevent harmful products from making their way into the marketplace

CESD report on natural health products

In 2021, the Commissioner of the Environment and Sustainable Development (CESD) tabled an audit on Health Canada's NHP program. The audit focused on whether NHPs available for sale in Canada are safe, effective and represented accurately to consumers. The audit's recommendations in Annex A validated key gaps that Health Canada had identified and worked to address in recent years. The study report issued by the Standing Committee on Public Accounts in 2022 also reinforced these findings.

Health Canada is committed to addressing all the audit's recommendations and to strengthening the NHP program by:

• improving labelling
• increasing oversight of the quality of NHPs
• increasing monitoring of labels and advertising, including online advertising
• strengthening compliance and enforcement activities, such as:
• an inspection program
• new tools to protect the health and safety of people in Canada when serious health risks arise

We are also looking at introducing fees to regulate NHPs, make program improvements and strengthen regulatory oversight.

Natural health product regulatory program

The NHP regulatory program consists of pre-market (product and site licensing) and post-market (monitoring, compliance and enforcement) activities.

Pre-market activities

Product licensing

To sell NHPs in Canada, a company must apply for and obtain a product licence from Health Canada. Applicants must give detailed information about their product, including medicinal and non-medicinal ingredients, manufacturing processes, sourcing, dosage, potency and recommended usage.

The safety, quality and efficacy of NHPs and their health claims requires appropriate evidence so that Health Canada and consumers know that the products are safe and effective. Evidence may include clinical trial data or references to published studies, journals, pharmacopoeias and traditional resources. The type and amount of supporting evidence required depends on the proposed health claim and the product's overall risks.

NHPs must also meet specific labelling requirements to help consumers make safe and informed choices about the products they use.

Once we assess a product and determine that it is safe, effective and of high quality, we will issue a product licence.

We will also issue an 8-digit natural product number (NPN) or homeopathic medicine number (DIN-HM). This number must appear on the label, as it indicates that Health Canada has reviewed and approved the product.

Site licensing

Companies that manufacture, package, label or import NHPs must follow the good manufacturing practices (GMP) requirements outlined in Part 3 of the Natural Health Products Regulations (NHPR). GMP requirements cover the following:

• product specifications
• premises
• equipment
• personnel
• sanitation
• operations
• quality assurance
• stability
• records
• product sterilization
• lot or batch samples
• recall processes and reporting

Companies must provide evidence of compliance with GMPs to be issued a site licence by Health Canada.

Post-market activities

Surveillance, Compliance and Enforcement

Health Canada also conducts post-market activities, including surveillance and compliance and enforcement oversight activities on NHPs for sale in Canada.

We identify potential product compliance or safety issues by analyzing adverse reaction reports from industry, hospitals, and health professionals and consumers.

We also conduct literature searches, data scans and communications with foreign regulatory agencies.

Compliance verification also includes assessing selected products at the border in collaboration with the Canada Border Services Agency before they are admitted into Canada. Where necessary, laboratory analyses on samples are conducted to assess product safety, quality and/or efficacy.

Complaints from the public, industry, international partners and other sources also inform our compliance verification activities. When a compliance or safety issue is established or where the potential for harm exists, Health Canada takes appropriate risk mitigation steps, including:

• mandating changes in product safety information
• issuing public warnings or advisories
• recalling a product
• requesting that products be withdrawn from the market

Health Canada also oversees and enforces the regulatory requirements related to health product advertising. We assess advertising complaints that we receive and the promotional claims for NHPs against the Food and Drugs Act, the NHPR and the terms of the product's authorization. When we find non-compliance, we may take action.

Note that Health Canada has advertising-specific policies and guidance and conducts stakeholder awareness activities to help prevent non-compliant advertising. In 2021-22, we completed an inspection pilot program to promote and verify industry compliance with GMPs. The results from this pilot are being used to help us transition to a permanent risk-based inspection program.