ARCHIVED — Vol. 146, No. 51 — December 22, 2012

Regulations Amending the Fees in Respect of Drugs and Medical Devices Regulations

Statutory authority

Financial Administration Act

Sponsoring department

Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue and objectives

There are activities conducted by Health Canada (the Department) that should not be subject to the Fees in Respect of Drugs and Medical Devices Regulations (Canada Gazette, Part Ⅱ, April 13, 2011, SOR/2011-79). These activities relate to Extraordinary Use New Drugs (EUND) and Active Pharmaceutical Ingredients (API).

The objective of this proposal is to ensure that activities outside of the intended scope of the User Fees Proposal presented by Health Canada to stakeholders and Parliament are not inadvertently subject to the Fees in Respect of Drugs and Medical Devices Regulations.

Several other technical clarifications are also planned in this amendment.

Description and rationale

Extraordinary Use New Drugs

Extraordinary Use New Drugs are drugs that are used in emergency response situations, such as military medical countermeasures and public health emergencies, for which traditional studies conducted on human subjects cannot be completed (Canada Gazette, Part Ⅱ, April 13, 2011, SOR/2011-88).

Currently, an EUND submission is subject to the same fee as a regular drug submission. As a matter of policy, the Department does not intend to charge fees for drug activities in support of emergency measures. This proposal would exempt drugs that are the subject of EUND submissions from fees associated with the examination of such submissions, the right to sell, and the examination of an application for or the amendment of an establishment licence — or the annual review of an establishment licence — that deal exclusively with EUND. The proposed exemptions mean that the Department would absorb all costs for activities related to EUND. For establishment licences related to both EUND and non-EUND activities, the applicable fees would still apply.

Active Pharmaceutical Ingredients

Forthcoming Regulations Amending the Food and Drug Regulations(1475 — Good Manufacturing Practices) are intended to introduce more oversight for activities associated with API, specifically the requirement to hold an establishment licence. During the development of the User Fees Proposal, the Department did not contemplate establishment licensing fees for API-related activities. Such fees would be considered to be a new fee according to the User Fees Act, and any revenue collected would subsequently need to be remitted, which would come with administrative costs to both the Government and the affected parties. To prevent this, Health Canada is proposing to exempt API from fees associated with the examination of an application for or the amendment of an establishment licence — or the annual review of an establishment licence — that deal exclusively with API. An establishment licence dealing with an API as well as with a drug in dosage form or a bulk process intermediate would be subject to the applicable fees. In accordance with the User Fees Act, Health Canada intends to introduce a fee for the examination of establishment licences in respect of API under a subsequent proposal. It is likely that such a proposal would be made following the three-year review of the Fees in Respect of Drugs and Medical Devices Regulations.

Miscellaneous changes

A number of technical clarifications are proposed in the amendment to the Regulations and its schedules. These include

  • — improvement to the definition of “fee verification period” in subsection 37(1) of the Regulations to clarify the start of the fee verification period for medical device licence amendments to better reflect the intended policy; and
  • — correction of a typographical error in the basic fee set out in Schedule 3 (Establishment Licence Fees — Packaging/ Labelling of Drugs) of the Regulations so that it reflects the fee established in the User Fees Proposal.

Consultation

Extraordinary Use New Drugs

On November 13, 2011, proposed Regulations entitled Fees in Respect of Drugs and Medical Devices Regulations were pre-published in the Canada Gazette, Part Ⅰ, and a 75-day comment period followed. Although EUND were not explicitly mentioned in the Regulatory Impact Analysis Statement or the proposed regulatory text, one respondent expressed concerns about charging user fees for EUND submissions. The respondent pointed out that any user fees paid by industry would be recouped by adjusting the price charged to Government purchasers of EUND. Health Canada agreed to exempt EUND-related activities as a separate amendment once the fees Regulations and EUND Regulations both come into force.

Active Pharmaceutical Ingredients

During the 2007 consultation for the proposed Cost Recovery Framework, some stakeholders enquired whether fees would be charged in connection with the proposed establishment licensing of API sites. Health Canada responded that no fees were then being contemplated. No other stakeholder comments were received.

Implementation, enforcement and service standards

Once the amendments are made, guidance documents for stakeholders will be updated as required.

Contact

Lyne McVeigh
Policy, Planning and International Affairs Directorate
Health Products and Food Branch
Health Canada
Holland Cross, Tower B, 5th Floor
1600 Scott Street
Ottawa, Ontario
K1A 0K9
Fax: 613-941-7104
Email: LRM_MLR_consultations@hc-sc.gc.ca

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to subsection 19(1) (see footnote a) and section 19.1 (see footnote b) of the Financial Administration Act (see footnote c) and, considering that it is otherwise in the public interest, subsection 23(2.1) (see footnote d) of that Act, proposes to make the annexed Regulations Amending the Fees in Respect of Drugs and Medical Devices Regulations.

Interested persons may make representations concerning the proposed Regulations within 75 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be addressed to Lyne McVeigh, Policy, Planning and International Affairs Directorate, Health Products and Food Branch, Health Canada, Address Locator: 3105A, Holland Cross, Tower B, 5th Floor, 1600 Scott Street, Ottawa, Ontario K1A 0K9 (fax: 613-941–7104; email: LRM_MLR_consultations@hc-sc.gc.ca).

Ottawa, December 13, 2012

JURICA ČAPKUN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE FEES IN RESPECT OF DRUGS
AND MEDICAL DEVICES REGULATIONS

AMENDMENTS

1. (1) Paragraph 3(a) of the English version of the Fees In Respect of Drugs and Medical Devices Regulations (see footnote 1) is replaced by the following:

  • (a) a drug that is for veterinary use only;

  • (d) a drug that is an active pharmaceutical ingredient as defined in subsection C.01A.001(1) of the Food and Drug Regulations.

(2) Section 3 of the Regulations is amended by adding the following after paragraph (b):

  • (c) a drug that is the subject of an extraordinary use new drug submission filed under section C.08.002.01 of the Food and Drug Regulations or of an abbreviated extraordinary use new drug submission filed under section C.08.002.1 of those Regulations; or

2. Subsection 10(1) of the French version of the Regulations is replaced by the following:

Paiement différé — avis de conformité

10. (1) Si la personne visée à l’article 6 a présenté la demande d’autorisation visée à l’article C.07.003 du Règlement sur les aliments et drogues avec la présentation, le supplément ou la demande d’identification numérique, le paiement est différé jusqu’à ce qu’un avis de conformité soit délivré au fabricant aux termes de l’article C.08.004 de ce règlement ou qu’un document soit remis au fabricant ou à l’importateur indiquant l’identification numérique attribuée à la drogue aux termes de l’article C.01.014.2 du même règlement.

3. Subsection 11(3) of the English version of the Regulations is replaced by the following:

Sales records

(3) Within 60 days after the end of the fee verification period, the person must provide the Minister with sales records in regard to the sales of the drug in Canada during the fee verification period, prepared in accordance with generally accepted accounting principles, and a document signed by the individual responsible for the person’s financial affairs certifying that the records were so prepared.

4. The definition “fee verification period” in subsection 37(1) of the Regulations is replaced by the following:

  • “fee verification period”
    « période de vérification du prix à payer »
  • “fee verification period”, in respect of a medical device that is the subject of a licence application, means
    • (a) for an application that is referred to in section 39 or 40, the period beginning on the day on which the medical device is first sold in Canada under the licence and ending two years after that day, and

    • (b) for an application that is referred to in section 41, the period beginning on the day on which the licence is amended and ending two years after that day.

5. (1) The portion of subsection 44(1) of the English version of the Regulations before paragraph (a) is replaced by the following:

Remission — anticipated gross revenue

44. (1) Subject to subsection (4) and subsection 46(2), remission is granted of the amount by which the fee payable under section 39, 40 or 41, as applicable, exceeds 2.5% of the actual gross revenue from the medical device in question if that revenue is $100,000 or less and if

(2) Subsection 44(3) of the English version of the Regulations is replaced by the following:

Sales records

(3) Within 60 days after the end of the fee verification period, the manufacturer must provide the Minister with sales records in regard to the sales of the medical device in Canada during the fee verification period, prepared in accordance with generally accepted accounting principles, and a document signed by the individual responsible for the manufacturer’s financial affairs certifying that the records were so prepared.

6. Subsection 49(1) of the Regulations is replaced by the following:

Audited sales records

49. (1) If the Minister determines, on the basis of any information available to the Minister, that the statement provided in accordance with paragraph 48(1)(a) is inaccurate, the Minister may require, for the purpose of determining the fee payable, the manufacturer to provide sales records that have been audited by a qualified independent auditor.

7. The portion of item 11 of Schedule 1 to the English version of the Regulations in column 2 is replaced by the following:

Item

Column 2

Description

11.

Applications attesting to compliance with a labelling standard or Category IV Monograph for a drug that do not include clinical or non-clinical data or chemistry and manufacturing data.

8. The portion of item 1 of Schedule 3 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Fee ($)

1.

10,300

COMING INTO FORCE

9. These Regulations come into force on the day on which they are registered.

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