Canada Gazette, Part I, Volume 157, Number 15: Regulations Amending the Food and Drug Regulations and the Medical Devices Regulations (Recalls, Establishment Licences and Finished Product Testing)

April 15, 2023

Statutory authority
Food and Drugs Act

Sponsoring department
Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The Food and Drugs Act (the Act) governs the sale of therapeutic products (i.e. drugs and medical devices) in Canada and has undergone significant change and modernization in the last decade to increase oversight of public safety. The health technology sector continues to evolve through rapid innovation and increasingly globalized supply chains, challenging existing oversight mechanisms. Modernizing elements of Canada’s regulatory frameworks respecting compliance and enforcement activities for therapeutic products would improve alignment with key foreign regulators.

Assessing the effectiveness of therapeutic product recalls

Health Canada expects responsible parties to voluntarily recall a drug or medical device when the product contravenes the Act or the Food and Drug Regulations (FDR) or the Medical Devices Regulations (MDR), or when the product presents a risk to human health. Health Canada relies on policy and guidance to request certain information to assess non-compliant products and their risks to health, and to set out timelines for industry to report recalls to the Department. However, requests for voluntary information that are set out in guidance do not have force of law and are not enforceable. This can challenge Health Canada’s ability to effectively monitor and oversee recalls of therapeutic products and verify that the actions taken are adequate to mitigate and manage risks to health in a timely manner.

When manufacturers and importers conduct a recall of a medical device, the MDR requires that they report the recall to Health Canada, including those where the use of or exposure to the recalled device is not likely to cause any adverse health consequences. The requirement to report low-risk medical device recalls is not aligned with other jurisdictions, and results in added burden and reputational concerns for industry.

In 2014, the Protecting Canadians from Unsafe Drugs Act (Vanessa’s Law) amended the Act to improve the safety and oversight of therapeutic products by introducing measures to, among other things, enable the Minister to order a person who sells a therapeutic product to recall the product when the Minister believes there is a serious or imminent risk of injury to health. The FDR and MDR currently have not been updated to reflect this new authority and lack a sufficient reporting framework for recalls ordered by the Minister. This regulatory gap challenges Health Canada’s ability to implement the Minister’s power in an effective and transparent way.

Barriers to compliance with good manufacturing practices for drugs

The FDR have an outdated reference to designated regulatory authorities in countries which have a mutual recognition agreement (MRA) with Canada. The current reference does not reflect the progress Canada has made to strengthen its relationships with other jurisdictions. This impedes importers from leveraging inspection outcomes for establishments conducting regulated activities in those jurisdictions. The regulatory process to amend the references is cumbersome, resource intensive, and does not allow for efficient and timely updates to the list of designated regulatory authorities.

In addition, the current regulatory requirements respecting finished product testing present challenges for importers and distributors of certain novel and complex drug products, such as gene and cell therapies and short-lived radiopharmaceuticals.

Agile and risk-based oversight of medical device establishments

The medical device establishment licensing (MDEL) framework does not provide sufficient flexibility to enable the Department to target specific areas of non-compliance or health and safety concerns under the licence. If a MDEL holder is non-compliant with certain requirements of the MDR, Health Canada may consider suspending the MDEL. A suspension means that a company must cease all MDEL licensed activities, despite certain activities being compliant. This could impact the supply of medical devices in Canada.

Additionally, the MDEL application requirements need to be modernized to align with current standards of practice. Modernized requirements would improve Health Canada’s ability to effectively assess risk based on past compliance history and to contact licence holders to communicate key information.

Background

The Act and regulations protect public safety by regulating activities such as the manufacture, sale, and advertisement of food, drugs, cosmetics, and medical devices. Regarding therapeutic products (i.e. drugs and medical devices) specifically, Health Canada is responsible for activities to help make sure that these products continue to be safe, effective, and of high quality. This includes the compliance and enforcement oversight of therapeutic product supply chains, including establishment licensing and administering the recall framework. Any person that conducts licensable activities (e.g. importation and distribution) in respect of these products must hold an establishment licence as set out in the FDR or the MDR, unless otherwise exempt. Authorities for the Minister’s recall powers and requirements for regulated parties are provided through the Act and regulations.
The Department’s Forward Regulatory Plan, Stock Review Plan, and the Health and Biosciences Sector Regulatory Review Roadmap (the Roadmap) outline Health Canada’s commitments to modernize the FDR and the MDR. The proposed amendments represent the first phase of work to modernize the drug establishment licensing (DEL) and MDEL frameworks, as described in the Forward Regulatory Plan.

Drugs

Every person who conducts regulated activities with drugs has obligations under the Act and the FDR. This legal framework provides a suite of authorities that enable the Department to carry out compliance and enforcement actions, allowing for the effective oversight of drugs to mitigate and manage risks posed to consumers. Tools such as establishment licensing, and targeted enforcement actions like recalls, allow the Department to monitor, promote and require industry compliance with good manufacturing practices (GMP), and address the health risks of non-compliant products.

Reporting drug recalls to Health Canada

When a drug contravenes the Act or the FDR, or if it presents a risk to the health of consumers, Health Canada expects the manufacturer or importer of the drug in Canada to recall it from the market. Section C.01.051 of the FDR requires the manufacturer or importer of a drug in dosage form to notify Health Canada when they voluntarily initiate a recall, and the regulations specify the information that must be included with the notification. Health Canada’s Recall Policy for Health Products (POL-0016) and the related Drug and natural health products recall guide (GUI-0039) complement this reporting requirement. The policy and guidance provide further detail on the expectations for industry for when a recall should be considered and outline additional information that should be included with the notification to support Health Canada’s role in the oversight of the effectiveness of the recall.

Following the 2013 recall of the drug Alysena 28 birth control pill by its manufacturer due to a packaging error, the Minister of Health commissioned a formal independent review of recall requirements and processes by Risk Sciences International in response to public concern and criticism regarding the Department’s handling of the issue with Alysena 28. The final report outlines the chronology of events between Health Canada and the manufacturer in comparison to the policies and regulatory and legislative framework that supported the recall process at the time. Risk Sciences International concluded its review with recommendations to strengthen the effectiveness of the recall process:

• Recommendation 1: Strengthen Health Canada’s authority to respond to hazards of drug products
• Recommendation 2: Improve clarity and communication of roles and responsibility concerning a drug recall
• Recommendation 3: Include consideration of level of social concern

The Roadmap outlines the feedback received from industry that is consistent with the review, including comments that the timelines and expectations for reporting drug recalls are not clear.

Drug recalls ordered by the Minister

The Act provides the authority to order a person who sells a therapeutic product to recall the product from the marketplace if the Minister believes that it presents a serious or imminent risk of injury to health. While a manufacturer or importer is encouraged to initiate a recall if their product is found to pose a risk to health, a recall order can be used as an enforcement tool to remove a non-compliant product from the market.

A recall order would set out the information necessary for the person to comply with the order and address the risk of injury to health. Depending on the level of risk and the distribution of the product, this could include the return, disposal, or correction of the drug. The scope of the recall reporting requirement in the FDR is currently limited to a recall initiated by the manufacturer or importer of a drug. This would not be sufficient to address information requirements when an order is issued to any other person that sells a drug (e.g. a wholesaler or retailer).

Designated regulatory authorities

A person that conducts a licensable activity with a drug in Canada (i.e. fabrication, packaging/labelling, importation for sale, testing, distributing, or wholesaling) must hold a DEL as set out in the FDR, unless otherwise exempt under the Act or the FDR. A licence is issued based on the applicant’s evidence demonstrating compliance with GMP. Compliance with GMP can be demonstrated in different ways, such as through a certificate following an assessment or inspection by an inspector designated under the Act, or through the outcome of an inspection by the regulatory authority of a country that has a MRA with Canada (i.e. a designated regulatory authority), where that authority has recognized the building as meeting requirements for GMP in respect of the relevant regulated activity.

Information sharing between Health Canada and a designated regulatory authority within a country that has a MRA with Canada is an integral component of Canada’s DEL framework and is referenced throughout the regulatory licensing provisions of the FDR. Leveraging the outcomes of inspections by designated regulatory authorities reduces burden on importers and in turn promotes access to drugs in Canada. Reference to regulatory authorities in MRA jurisdictions is made in a table under C.01A.019; however, this information is outdated and does not reflect the current participating parties or scope of agreements. Designating regulatory authorities through an ambulatory list that is incorporated by reference would serve to recognize countries that have a MRA with Canada and support efficient updates.

Finished product testing

Drugs sold in Canada are held to the highest standards in respect of their quality, in part because of the requirements in Part C, Division 2 of the FDR, which governs the practices, procedures, equipment, and personnel when carrying out fabrication, packaging, labelling, testing, distribution, wholesaling, and importation. Under GMP, finished product testing requirements help to ensure that drugs fabricated in Canada, or those imported from abroad, are consistently manufactured in accordance with the specifications for that drug. In certain cases, the regulations provide for exemptions for packagers, labellers, distributors, and importers from carrying out finished product testing depending on where the fabrication, packaging/labelling and testing occurs. Health Canada’s Good manufacturing practices guide for drug products (GUI-0001) assists regulated parties in complying with these requirements.

Over the years, as novel therapeutic products have entered the market, Health Canada has become aware of the challenges for industry in complying with finished product testing requirements, specifically, requirements for importers and distributors of certain complex biologic drugs (gene and cell therapies) and radiopharmaceuticals. Specific examples of these challenges have been highlighted with gene and cell therapies, where one batch of drugs is just enough to treat a single patient and any sample taken to carry out additional testing would compromise the quantity remaining for patient treatment and create unnecessary delays. Similarly, product-specific characteristics of some radiopharmaceuticals, including a very short shelf life (measured in hours), make any additional handling or testing a challenge. Health Canada has, on a case-by-case basis, chosen to not prioritize enforcement with respect to finished product testing for these products when alternative risk mitigation measures and safety controls have been implemented.

Medical devices

Medical devices include a wide range of products, such as pacemakers, hip implants, synthetic skin, medical laboratory diagnostic instruments, test kits for diagnosis, medical masks, and contraceptive devices. Advances in medical device technology have led to the development of novel devices, growth in the number of participants in the medical device supply chain and new means for consumers to access medical devices (e.g. selling and advertising online). This continually evolving landscape poses challenges to existing oversight mechanisms and creates a need for flexibility in the existing regulatory framework for medical devices.

Reporting firm-initiated medical device recalls to Health Canada

Health Canada expects the manufacturer, importer, and distributor of a medical device to recall, correct, or notify owners of defective devices if a risk to health or safety or a non-compliance concern exists. Section 58 of the MDR requires the manufacturer, importer, and distributor to establish and implement documented procedures that will enable them to carry out an effective and timely recall of a medical device. Sections 64 and 65 of the MDR require the manufacturer and importer of a medical device to provide Health Canada with specific information when they undertake a recall. POL-0016 and Guide to Recall of Medical Devices (GUI-0054) complement this reporting requirement by providing further detail on the expectations for companies, including timelines for reporting and keeping records. For example, guidance recommends that companies notify Health Canada within 24 hours of making the decision to recall. The current MDR require that manufacturers and importers provide the Minister with specific information on or before undertaking a recall of a device but do not include a specific notification time frame for the decision to conduct a recall.

GUI-0054 also provides guidance to companies on how to evaluate the risk(s) associated with a defective device and how to assign a health hazard classification (Type I, II, or III) to the recall based on the evaluation of risk. Type I recalls are assigned to a situation where there is a reasonable probability that the use of (or exposure to) a recalled device will cause serious adverse health consequences or death. Type II recalls are assigned when the use of (or exposure to) a recalled device may cause temporary adverse health consequences, or where there is not a significant probability of serious adverse health consequences. Type III recalls are assigned to a situation where the use of (or exposure to) a recalled device is not likely to cause any adverse health consequences. This risk evaluation is a necessary step in the recall process for manufacturers and importers and helps the regulated party to determine the actions they need to take to conduct the recall. Health Canada reviews the health hazard classification assigned to the recall by the company and confirms it is appropriate based on the risk posed by the product.

Stakeholders have raised concerns that Canada’s current medical device recall reporting requirements create administrative and reputational burden for industry. Section 64 of the MDR requires importers and manufacturers to report all recalls to Health Canada, including recalls unlikely to cause any adverse health consequences (Type III recalls). Stakeholders have indicated that the Canadian requirements to report all three types of recalls are broader than the international standard set by the International Medical Device Regulators Forum and international partners, such as the United States and the European Union. For example, a Type III recall may be a notification to end users that a device requires a labelling update but is still safe to use and does not require removal from the market. Under the current framework, a company would have to report this notification to Health Canada but would not have to report such a recall to the regulatory authority in the United States. This inconsistency may create a public perception that the device is unsafe even though it is unlikely to cause any adverse health consequences.

Definition of recall in the MDR

The definition of recall in the MDR was created before the amendments to the Act introduced by Vanessa’s Law and does not distinguish between recalls initiated by a company and those ordered by the Minister under the Act. The current definition of recall in the MDR applies to the recall of medical devices that are undertaken by a manufacturer, importer, or distributor without specifying whether it applies only to recalls initiated by a company or equally applies to recalls that are ordered by the Minister. The ambiguity in the definition of recall results in a lack of clarity on the reporting requirements for regulated parties when the Minister orders a recall.

Medical device recalls ordered by the Minister

The Act provides the Minister with the authority to order a person who sells a therapeutic product to recall the product from the marketplace if the Minister believes that it presents a serious or imminent risk of injury to health. While a manufacturer or importer is encouraged to initiate a recall if their product is found to pose a risk to health, a recall order can be used as an enforcement tool to remove a non-compliant product from the market.

Under subsection 21.3(1) of the Act, the Minister may order a seller to recall the product or send the product to a particular place (e.g. a warehouse for examination or quarantine). If the Minister believes that corrective action would be effective to deal with the risk of injury to health (e.g. for a large medical device such as a magnetic resonance imager [MRI]), the Minister may instead order a seller to request that corrective action be taken.

Currently, the MDR does not have a sufficient reporting framework for recalls ordered by the Minister. The reporting requirement in the MDR is currently limited to the manufacturer and importer of a medical device and does not include specific reporting requirements for other persons who could be ordered to recall by the Minister, such as a retailer or distributor.

MDEL framework

The MDR classifies medical devices into four classes, with Class I representing the lowest risk to health and Class IV representing the highest risk to health. The Minister issues MDELs to importers and distributors of all four device classes. A MDEL permits importation and/or distribution (sale) of a medical device in Canada. The MDR requires a person who wishes to apply for a MDEL to identify the manufacturers and, for each manufacturer, the classes of medical devices imported and distributed within Canada, and to attest that they have procedures in place, including for distribution records, complaint handling, recalls, and incident reporting, should a problem with a device be identified. MDEL holders must also provide Health Canada with the name and address of their establishment as well as the name, title, and telephone number of a company representative. Moreover, MDEL holders are required to keep this information up to date and advise Health Canada of any changes within 15 days.

Health Canada requests additional information on the MDEL application that is currently not specified in the MDR, such as an email address for the representative of the establishment, any previous company ID, and any previous MDEL number(s) held by the establishment. Since this additional information is not a regulatory requirement, Health Canada cannot take compliance and enforcement action if an applicant fails to provide this additional information.

MDEL terms and conditions

A term or condition is an obligation that the Minister imposes on a licence holder to provide additional oversight of potential risks and uncertainties related to the product or licensed activities, while facilitating access for therapeutic products. The MDR (section 36) allows the Minister to apply terms and conditions regarding testing on Class II to IV Medical Device Licences. The interim orders respecting the importation and sale of medical devices for use in relation to COVID-19^{footnote 1} also provided the Minister with the authority to temporarily impose terms and conditions on the authorization for importation or sale of a COVID-19 medical device. Currently, the Minister does not have the authority to impose or amend terms and conditions on a MDEL, limiting the Minister’s ability to take targeted action to address specific compliance concerns related to the importation or sale of medical devices, which may potentially affect access to needed medical devices.

Objective

The objective of the proposed amendments to the FDR and the MDR is to strengthen oversight of therapeutic products sold in Canada by introducing additional risk-based measures and modern, flexible regulatory tools that help to protect the health and safety of consumers and the supply of these products in Canada.

Description

The proposed amendments target improvements to the regulation and oversight of therapeutic products in both the FDR and the MDR. The proposed amendments for both regulations would improve Health Canada’s ability to monitor and evaluate the effectiveness of drug and medical device recalls. In addition, other proposed changes to the drug and medical device frameworks would enhance the Department’s capacity to regulate based on risk and may improve access to safe therapeutic products in Canada.

Proposed amendments to the Food and Drug Regulations

Improving the drug recall framework

Reporting drug recalls to Health Canada

The proposed amendments to section C.01.051 of the FDR would make mandatory the current expectation, detailed in the Drug and natural health products recall guide (GUI-0039), that the manufacturer or the importer initially report the recall to Health Canada within 24 hours of making the decision to recall.

Section C.01.051 would also be amended to elaborate on existing information requirements when reporting a drug recall to Health Canada in a manner that aligns with current policy and would include

• product-specific information, such as additional details about the affected lots (e.g. drug identification number [DIN], expiry date, fabricator or importer establishment information);
• quantity and distribution information, such as information about the product disposition, and specific details about the period during which the drug was sold and to whom; and
• details about the recall, such as the reasons for the recall, the date on which and how the issue was first discovered by the manufacturer or importer, expected dates for the commencement and the completion, and an assessment of whether the recall of affected lots may lead to a disruption in the drug’s supply.

The proposed regulations would specify a second time frame (within 72 hours after making the decision to recall) by which the manufacturer or importer would be required to provide additional information to the Minister, such as the recall strategy, and a description of the corrective and preventive actions intended to be taken to prevent a recurrence of the issue that led to the recall.

The scope of application for the drug recall reporting obligations in section C.01.051 would be expanded from drugs in dosage form to also apply in the case of recalls of active ingredients as defined in Division 1A of the FDR.

The provisions would also require the manufacturer or importer to inform Health Canada of the effect that the recall may have on their ability to meet demand for the drug in Canada. Based on further analysis of whether the drug is considered to be medically necessary, this would allow Health Canada to consider relying on other regulatory tools given the potential impact on supply.

Reporting drug recalls ordered by the Minister

Currently, the FDR does not have a sufficient reporting framework for recalls ordered by the Minister. The proposed amendments would introduce into the FDR specific drug recall reporting obligations for a person who is ordered by the Minister to recall a drug under section 21.3 of the Act. The information that must be reported would support Health Canada’s oversight of the recall and would include the quantity of drugs and details about its distribution, an assessment of the risk of injury posed by the drug, the proposed communications, the recall strategy, and a description of corrective and preventive actions. Given that a person could only be ordered by the Minister to recall in cases where the Minister believed that a therapeutic product presented a serious or imminent risk of injury to health, the proposed regulations would authorize the Minister to specify the time and manner in which the information is to be provided by the person, on a case-by-case basis.

Communications

The proposed amendments would make mandatory the requirement for the person conducting the recall, whether voluntary or ordered by the Minister, to provide the Minister with any communication materials that are proposed to be used in connection with starting a recall (e.g. the initial recall notice to consignees) before the recall is initiated. This information would allow Health Canada to assess the appropriateness of the actions taken by the person recalling, such as whether the appropriate risk type classification is being used in the case of a voluntarily initiated recall. The amendments would also introduce an obligation for the person conducting the recall to provide copies of any additional communications throughout the recall, upon request.

Drug recall completion

The proposed amendment would specify the information that must be provided to the Minister within 30 days of completing a voluntary recall or a recall ordered by the Minister. This information would include a description of the results of the recall, and of the corrective and preventive actions that have been or will be taken to prevent recurrence of the issue that led to the recall. Guidance would elaborate on the specific information to be included in the final report to help industry comply with the regulations.

Updating the list of designated regulatory authorities

The proposed amendments would repeal the table of designated regulatory authorities in section C.01A.019 of the FDR and replace it with a reference to an ambulatory list that would be incorporated by reference by virtue of the authority in section 29.2 of the Act. The incorporated list would contain all regulatory authorities within countries that have a MRA with Canada, as well as accurately reflect the respective scopes of those agreements as they concern the categories of drugs and regulated activities. An ambulatory list was chosen to allow review and maintenance by Health Canada, in accordance with the guiding principles set out in Health Canada’s Incorporation by Reference Policy, to allow changes to the list from time to time as Canada’s MRAs change in number or scope.

Exemptions from finished product testing

The proposal would amend section C.02.019 of the FDR to conditionally exempt a packager, labeller, importer, or distributor from performing finished product testing for certain drugs that cannot practically or reasonably be subjected to finished product testing. Further, the proposed amendments would clarify that direct shipping to a person other than an importer (typically a health care provider) is permitted for these products.

The proposed exemption would rely on the existing definitions in Part C, Division 3 of the FDR for a “radiopharmaceutical” and a “radionuclide generator,” as well as new proposed definitions for a “gene therapy” and a “cell therapy.” Packagers, labellers, importers, and distributors of these products would still be required to have quality control measures that enable remote oversight, such as having evidence that the drug has been tested against the specifications and has not been transported or stored under conditions that may affect its compliance with those specifications. The proposed amendments would be supported by guidance and introduce clear regulatory requirements that align with a risk-based approach for compliance and enforcement.

Proposed amendments to the Medical Devices Regulations

Improving the medical device recall framework

Definition of recall in the MDR

The proposed amendments would update the definition of recall in the MDR to include both recalls initiated by a company and recalls ordered by the Minister. In addition, the language in the definition would be modernized to replace “may be hazardous to health” with “may present a risk of injury to health” to align with the language in the Act.

Reporting firm-initiated medical device recalls to Health Canada

The proposed amendments would require importers and manufacturers to report firm-initiated medical device recalls to Health Canada in situations where the recalled device is likely to cause injury to the health of a patient, user, or other person or could cause serious injury to the health of a patient, user, or other person. While companies would still be expected to undertake recalls where the device is not likely to cause injury to health (i.e. Type III recalls), this amendment would reduce the regulatory burden and improve international alignment by creating a risk-based threshold for reporting recalls.

The recall provisions of the MDR would be amended to introduce a 24-hour reporting requirement for reportable recalls initiated by a manufacturer or importer. The provision would reflect the existing expectation outlined in guidance by requiring the manufacturer or importer to provide written notification to Health Canada within 24 hours of making the decision to proceed with a recall. This provision would provide key information to the Minister earlier in the recall process, which would improve Health Canada’s ability to effectively oversee recalls. The information that would be required to be provided in this initial notification includes the name of the device, the identifier of the device, the name and address of the manufacturer and importer, the reason for the recall, and a preliminary evaluation of the risk associated with the defectiveness or potential defectiveness.

Reporting medical device recalls ordered by the Minister

Currently, the MDR does not have a sufficient reporting framework for recalls ordered by the Minister. The proposed amendments would introduce specific medical device recall reporting obligations to provide clarity for a person who is ordered by the Minister to recall a device under section 21.3 of the Act into the MDR. The amendments would align the reporting provisions for these recalls with those currently in place under sections 64 and 65 of the MDR, where appropriate. The information that must be reported, in the time and manner specified by the Minister, would support Health Canada’s oversight of the recall, including

• details about the device being recalled, such as the name and address of the manufacturer and importer, and the nature of the device defectiveness or potential defectiveness;
• details about how the recall is being conducted, such as the proposed recall strategy, and any corrective and preventive actions the person is taking; and
• details about the number of affected units of the device and its distribution within Canada, such as the total quantity manufactured, imported, or sold, the name of the person who sold them the device, the names of each person to whom the affected device was sold, and the period of distribution.

The person ordered by the Minister to conduct the recall would be required to submit their proposed communications to the Minister before beginning the recall. After beginning the recall, any other communications issued or intended to be issued would also be required to be submitted upon the Minister’s request. This would allow Health Canada to assess whether the communications are sufficient to mitigate the identified risk.

The proposed amendments would require that the person ordered to conduct the recall notify the Minister within 24 hours of the beginning and completion of the recall. This provision would enable Health Canada to monitor the progress of the recall.

Medical device recall completion

The proposed amendments would specify the information that must be provided to the Minister within 30 days of completing the recall. This requirement would apply to both firm-initiated recalls and recalls ordered by the Minister. This information would include the results of the recall, and the corrective and preventive actions that have been taken to prevent recurrence of the issue that led to the recall. Guidance would elaborate on the specific information to be included in the final report to help industry comply with the regulations.

These reporting timelines and information requirements would provide precision to regulated parties and would enable Health Canada to monitor the progress and effectiveness of the recall. In the case of a recall ordered by the Minister, it would also provide Health Canada with evidence that the responsible party has implemented corrective measures to prevent recurrence of the situation which led to the recall and posed a serious or imminent risk to health.

Recall record keeping

The proposed amendments would include new provisions that require persons conducting a recall to keep recall records. These amendments would apply to all recalls, including recalls where the use of (or exposure to) the device is not likely to cause any adverse health consequences. These provisions would reflect the existing expectations outlined in guidance for regulated parties to keep all records that demonstrate that they have completed an effective and timely recall. Requiring recall records to be kept would allow Health Canada to verify, after the recall, if the company’s documented recall procedures enable them to carry out an effective and timely recall of a device. Requiring record keeping would also allow Health Canada to verify that manufacturers and importers assess the risk associated with a recalled device appropriately and report to the Minister if required.

Manufacturers and importers who undertake firm-initiated recalls would be required to keep records of the information and documents referred to in sections 64 and 65 of the MDR for all recalls that they conduct. In addition, manufacturers and importers would be required to keep a record of the decision to conduct the recall, the proposed 24-hour notification report to Health Canada, and the date of completion of the recall. Distributors would be required to keep records related to the recalled device, the recall actions taken, the recalled device’s distribution, the results of the recall, the date of completion of the recall, and any actions taken to prevent recurrence of the problem.

Persons ordered to conduct a recall by the Minister would be required to keep records of the information and documents related to the recall, referred to in the proposed section 65.2. These records would include details about the device being recalled, such as the name and address of the manufacturer, importer and the person who sold the device, and the establishment where the device was manufactured. In addition, records of how the recall was conducted, the recalled device’s distribution, the results of the recall, any corrective and preventive actions taken, and the date of completion of the recall would also need to be kept.

Manufacturers would be required to keep recall records for at least as long as the device is being sold or the projected useful life of the device plus two years, whichever is longer. All other persons, including importers and distributors, would be required to keep recall records for at least the projected useful life of the device plus two years.

Miscellaneous and consequential amendments

Currently, the term “withdrawal” is used in section 53 of the MDR to refer to products removed from the market. A proposed amendment to remove the term “withdrawal” and replace it with “recall” would improve consistency in language within the MDR.

As a result of the updates to the recall provisions, consequential updates to other parts of the MDR are needed. Section 63 of the MDR would be updated to exempt retailers and health care facilities from the new 24-hour recall reporting requirement. Section 64 would be updated to require a medical device licence number or authorization number in the case of a COVID-19 medical device, as well as minor amendments to align with best drafting practices and amendments elsewhere in the package. Subsection 62.31(1) for medical devices designated for exceptional importation or sale, paragraph 68.03(2)(c) for COVID-19 medical devices, and paragraph 88(d) for investigational testing devices would also be updated to reflect that new and amended recall provisions apply to these devices.

Modernizing the medical device establishment licensing application requirements

The proposed amendments would require MDEL applicants and MDEL holders to provide their contact information and update it within 15 days of a change and provide any other name under which the person previously conducted activities under the MDR (if applicable). With up-to-date contact information, such as a required email address, Health Canada could quickly contact licence holders to communicate and obtain needed information. Requiring an applicant to identify any other name under which they have previously conducted activities under the regulations on the MDEL application would facilitate Health Canada’s ability to examine the compliance history of an applicant. It would also help improve risk-based inspection planning to use Health Canada’s inspection resources effectively.

New and expanded oversight tools for MDELs: Terms and conditions

The proposed amendments would allow the Minister to impose or amend terms and conditions on a MDEL after considering certain factors. Terms and conditions could be imposed or amended either at the time of MDEL issuance or at any time throughout the life cycle of the MDEL. Prior to imposing or amending terms and conditions, the Minister would be required to consider

• Whether there are uncertainties relating to the manner in which an activity is or will be conducted;
• Whether the requirements under the Act are sufficient to protect patients, users, or other persons from risks to health or safety;
• Whether compliance with the terms and conditions is feasible; and
• Whether there are less burdensome ways to meet the objectives of the terms and conditions.

Terms and conditions could be applied in situations such as, but not limited to, the following:

• If a MDEL holder lacks adequate storage and handling procedures, putting the safety of a specific kind of device at risk, terms and conditions could restrict the importation and distribution of these devices until the company demonstrates it has proper handling procedures in place.
• If a MDEL holder’s compliance history demonstrates an inability to consistently or effectively conduct recalls, terms and conditions could require that the MDEL holder provide the Minister with sufficient evidence to demonstrate their ability to effectively conduct a recall.
• If concerns exist regarding the safety and effectiveness of a specific device, terms and conditions could be used to require that a MDEL holder provide information to help trace the device through the supply chain (e.g. shipping and receiving records, up-to-date distributor information, complaint records).

Expanding the use of terms and conditions to the MDEL framework would help Health Canada address specific compliance concerns related to the importation or sale of medical devices. Terms and conditions would provide the Minister with greater flexibility to target specific areas of non-compliance while allowing compliant aspects of a business to continue.

Coming into force

The proposed amendments to the FDR and MDR would come into force six months from the date of registration, except for the proposed regulations respecting designated regulatory authorities and finished product testing in the FDR, which would come into force immediately upon registration. Once the proposed amendments to the MDR come into force, current MDEL holders and MDEL applicants would be required to update any changes to their contact information (i.e. an email address) at that time. Current MDEL holders would not be required to provide previous names until the time of annual licence review.

Regulatory development

Consultation

During targeted sectoral consultations for the Roadmap in 2018, stakeholders identified that components of the MDR recall requirements are overly burdensome and do not align with other jurisdictions, resulting in barriers to trade. Industry stakeholders raised similar concerns again during broad consultations with MDEL holders in 2019.

On November 30, 2021, Health Canada presented an overview of the proposed amendments to the MDR at the 2021 Medtech Conference. Medtech Canada is the national association representing approximately 100 companies in Canada’s medical technology industry. More than 250 individuals from industry, consulting firms, and other government departments attended the conference. The overview was well-received, few questions were asked, and no concerns were raised by attendees.

On December 11, 2021, Health Canada published a Notice of Intent for this regulatory proposal in the Canada Gazette, Part I, for a 60-day public consultation period. Health Canada also consulted stakeholders through a cost-benefit analysis survey during this same period. Feedback was received from the therapeutic product industry, including drug manufacturers, individual MDEL holders, and the associations that represent these sectors.

On June 9, 2022, an overview of the FDR amendments was presented to the Pharmaceutical Sciences Group, which includes several industry representatives, and the response was supportive.

Drug industry stakeholder feedback

Industry stakeholders were generally supportive of the proposal to strengthen and clarify the recall reporting requirements for drugs. One industry stakeholder association raised some concern with including additional reporting requirements in the regulations and indicated its preferred approach would be to continue to rely on guidance when it comes to establishing timelines for submission of certain information and documents to Health Canada. All respondents indicated support for clarifying the reporting timelines in the regulations (i.e. 24 hours from having made the decision to recall).

Health Canada has held several meetings with manufacturers and importers to better understand the source of the challenges of the biologic and radiopharmaceutical drug industry in complying with the finished product testing requirements. These meetings also served as an opportunity to hear from industry about alternative approaches to compliance when additional testing is not feasible or practical. Companies proposed alternative risk-mitigation measures, such as transport revalidation studies or the use of alternative sampling material.

Other responses from industry associations received during the Notice of Intent consultation period included a recommendation that Health Canada consider expanding the exemption from finished product testing to other products. This was out of scope of the current analysis and policy objective; however, the Department will continue to assess where regulatory modernization initiatives can be leveraged to reduce the burden and barriers, and to improve access to drug products.

Medical device industry stakeholder feedback

In response to the Notice of Intent and 2021 Medtech conference, the medical device industry was generally supportive of the proposed medical device amendments including opportunities for international alignment. Stakeholders did not raise any concerns about the ability of the Minister to impose terms and conditions on MDELs to mitigate risks to health and safety. They expressed appreciation for lessening burden on industry related to reduced recall reporting requirements for lower risk recalls. Industry raised questions related to sending recall notices to Health Canada, requesting clarification on reporting timelines. One comment noted increased costs associated with the proposed timelines for notifying Health Canada within 24 hours of deciding to conduct a recall.

Modern treaty obligations and Indigenous engagement and consultation

Having consulted the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, these amendments are not expected to have an impact on the Government’s modern treaty obligations. Health Canada completed an initial assessment that examined the geographical scope and subject matter of the initiative in relation to rights protected by section 35 of the Constitution Act, 1982, modern treaties, and international human rights obligations, and did not identify any potential modern treaty impacts.

Instrument choice

Health Canada assessed each of the following options using the objective of strengthening oversight over drugs and medical devices, protecting the health and safety of consumers, and maintaining access to therapeutic products in Canada.

Option 1: Non-regulatory measures and maintain status quo

Without the proposed amendments to the FDR and the MDR and under the status quo, the Department would not meet its objective to provide modern, flexible regulations, while minimizing unintended impacts on competition within industry and on the availability of medically necessary products for consumers, as per its commitments made in the Roadmap.

Continuing to rely on policy and expectations outlined in guidance documents would not support Health Canada’s compliance and enforcement programs in respect of therapeutic products. Measures and expectations in guidance are not enforceable unless specified in the regulations and do not provide industry stakeholders with obligations as it relates to recalls and establishment licensing. This approach would not address the existing challenges with meeting objectives of strengthened oversight of the safety and quality of therapeutic products.

Furthermore, continuing to rely on operational practices and policies would not be a sustainable approach. This option would not promote fairness and transparency for industry and would not address the disparities that exist between Canada’s regulatory frameworks and those of other regulators.

The reporting requirements in the FDR and the MDR are not sufficient to support reporting of recalls ordered by the Minister under the Act, which could challenge the Minister’s ability to effectively oversee these recalls.

Option 2: Propose regulatory amendments to improve recall and establishment licensing requirements for drugs and medical devices

This is the preferred option as it would contribute to strengthening Health Canada’s oversight over therapeutic product recalls. Specifying recall reporting obligations and clear timelines in regulation would provide assurance that Health Canada has access to the information needed to monitor recall progress. It would also help Health Canada evaluate the effectiveness of the recall measures taken in a timely manner. The 2013 recall of the Alysena 28 birth control pill demonstrated that the public, media, and health professionals expect the Department to have greater powers to engage with and monitor industry when a decision to recall a product is reached.^{footnote 2}

This option would also deliver on regulatory modernization commitments outlined in the Roadmap to create more agile, flexible regulations that better support innovation and manage emerging risks. The proposed update to the references to foreign regulatory authorities, which are designated for the purpose of the DEL framework is also only possible under this option. The introduction of an ambulatory list, incorporated by reference in the FDR, would mitigate the need for future regulatory changes if the scope of Canada’s MRAs were to change or new MRAs were to be established.

The regulations would provide the Minister with more flexible tools for oversight of regulated activities through the use of terms and conditions on MDELs. These tools would allow Health Canada to manage uncertainties related to MDEL licensed activities and address non-compliance in a more strategic and targeted way, providing greater transparency for industry, while allowing compliant business activities to continue. This option would also improve oversight of potentially unsafe therapeutic products and reduce the potential for product shortages for consumers.

Regulatory analysis

Benefits and costs

This section provides a description of the methodology used in the cost-benefit analysis, as well as a quantitative and qualitative depiction of the estimated costs and benefits due to the regulatory proposal. There are no new costs expected for Canadians, and there are limited costs estimated for industry and the Government of Canada. The estimated costs and benefits of the proposed regulations are determined by incremental differences between two future scenarios, one where the current regulatory framework (baseline scenario) does not change versus one where this proposal comes into force (regulatory scenario). Key assumptions are as follows:

• All costs and benefits are presented in 2022 dollars;
• A discount rate of 7% was used in the analysis;
• The proposed regulations would come into force after a six-month transition period after the regulations are registered, with the exception of the proposed amendments regarding designated regulatory authorities and finished product testing, which would come into force immediately upon registration; and
• The analysis evaluates the costs and benefits over a 10-year period; thus, the study period is presented from 2023 to 2032.

Data collection

In January 2022, two targeted surveys were created and distributed to all DEL and MDEL holders, respectively. These two surveys (referred to as “DEL stakeholder survey” and “MDEL stakeholder survey”) were used to understand the potential impacts that the proposed amendments may have on Canadian industry. Respondents were asked various questions on the proposed amendments in relation to drugs and medical devices.

The DEL stakeholder survey yielded 2 responses, while the MDEL stakeholder survey yielded 122 total responses. As a result of low and anecdotal responses from DEL holders, estimates from MDEL holders have been relied on more heavily.

The information obtained from industry surveys, internal discussions, and publicly available information provides the basis for the cost estimates presented below.

Costs

Costs to industry

(1) Drugs

(1a) Reporting drug recalls to Health Canada

Adding additional drug recall reporting requirements is not expected to increase costs for industry. When industry submits a recall report, the information that is currently required by the FDR to be provided to Health Canada does not give Health Canada enough information to assess the depth and level of recall that needs to be taken. As a result, to oversee the safety of consumers, Health Canada currently requests additional recall information for every recall, whether the information is expected through guidance documents or through policy. Most holders have provided as much information as possible regarding a recall when requested by Health Canada. It is assumed that most of the industry currently provides additional information voluntarily and thus, in general, no additional costs are expected for industry. However, regulating the requirements would provide a way for the Department to deal with the potential risk posed by parties unwilling to provide this information in the future.

(1b) Drug recalls ordered by the Minister

The proposed amendment to introduce Minister-ordered recall reporting requirements for DEL holders is expected to have low-cost impacts on industry. Under the Act, the Minister has had the authority to order a recall since 2014 if the Minister believes that a therapeutic product presents a serious or imminent risk of injury to health. To date, the authority has never been used by the Minister. While the Act creates a legal obligation for persons ordered to conduct a recall by the Minister, the FDR do not have a sufficient reporting framework for a person ordered to conduct a recall.

Generally, recalls are classified as Type I recalls when there is a serious or imminent risk to health and therefore it is assumed that Minister-ordered recalls would result in a Type I recall in most cases. Historically, Type I recalls have always been voluntarily undertaken and reported to Health Canada by industry. Therefore, since the total number of recalls is expected to stay the same and the reporting requirements are expected to be comparable to voluntarily initiated recalls, the incremental cost to industry is expected to be minimal. Regulating the reporting requirements would provide the Department with a way to deal with the potential risks posed by parties unwilling to provide this information in the future.

(1c) Designated regulatory authorities

The proposed amendment to introduce an ambulatory list of designated regulatory authorities is not expected to increase costs to industry. The incorporated-by-reference list of designated regulatory authorities is intended to provide additional clarity about which countries are participants in a MRA with Canada. The proposed amendment is expected to make this information more accessible to industry.

(1d) Finished product testing

The proposed amendment removing the requirement of finished product testing for certain products under certain conditions is expected to be a cost savings for industry. No additional costs are expected for industry from this amendment.

(2) Medical devices

(2a) Reporting recalls based on risk

This proposed amendment is expected to be a cost savings for both industry and Health Canada. No costs are expected for this amendment.

(2b) 24-Hour medical device recall reporting

Proposed amendments to the MDR to include current guidance recommendations for recall reporting within 24 hours of deciding to recall are anticipated to have a low impact on industry. While the 24-hour reporting requirement may require some companies to report sooner than under the current MDR, industry has been assumed to have voluntarily followed Health Canada’s recall guidance document (POL-0016) which has included this 24-hour recommendation since 2019. To date, Health Canada has found that industry generally follows the guidance recommendations. As a result, there is expected to be no cost for this particular amendment; however, regulating the requirements would provide a way for the Department to deal with the potential risk posed by parties unwilling to provide this information in the future.

(2c) Reporting medical device recalls ordered by the Minister

The introduction of recall reporting requirements for recalls ordered by the Minister is expected to have low-cost impacts on industry. Since 2014, the Minister has had the authority to order a recall if they believe that a therapeutic product presents a serious or imminent risk of injury to health under the Act. To date, the Minister has never used this authority. While the Act creates a legal obligation for persons ordered to conduct a recall by the Minister, the MDR do not have a sufficient reporting framework for a person ordered to conduct a recall. The reporting requirements that are being proposed for recalls ordered by the Minister are similar to those for voluntarily undertaken recalls.

Generally, recalls are classified as Type I recalls when there is a serious or imminent risk to health and therefore it is assumed that Minister-ordered recalls would result in a Type I recall in most cases. Historically, Type I recalls have been voluntarily undertaken and reported to Health Canada by industry. Since the total number of recalls is expected to stay the same and the reporting requirements are expected to be comparable to voluntarily initiated recalls, the incremental cost to industry is expected to be minimal.

(2d) Recall record keeping

The proposed amendments require the manufacturer to keep recall records for at least as long as the device is being sold or the projected useful life of the device, plus two years, whichever is longer. An importer or distributor who conducts a recall would be required to keep recall records for at least the projected useful life of the device plus two years.

Currently, guidance recommends industry keep recall records under their quality management systems, but the MDR do not have a requirement for how long the records are to be kept. It is assumed that companies have kept these records according to guidance and the only cost related to the regulatory amendment is the additional two years of record keeping beyond the projected useful life of the device.

Due to limited program information, a 2017 paper on medical device recalls in Canada^{footnote 3} was used to estimate the number of medical device recalls in Canada. The paper suggested there were approximately 7 200 recalls between 2005 and 2014, and assuming an even distribution over the 10 years, there would be approximately 720 medical device recalls per year for which records would need to be kept. It is also assumed that if a company has a quality management system in place, the cost of storing one report and the cost of storing more than one report should be comparable.

While it is estimated there would be around 720 medical device recalls in a given year, it is likely a company could have more than one recall. Program data suggests that companies that report a recall report, on average, around 1.4 recalls per year. Applying this average suggests that around 510 companies account for the 720 total recalls in a year (720 recalls / 1.4 recalls per company).

Based on recall information requested during past inspections, it was found that most companies store their recall records digitally. It is assumed that maintaining records for a company would take around one extra hour^{footnote 4} of a regulatory affairs employee’s time as well as additional cloud storage costs each year. It is assumed that employee wages and cloud storage would cost a company about $40 per year, or around $80 for the additional two years of record keeping. Assuming that 510 companies would need to keep records for an additional two years, the expected cost for industry to keep records is approximately $41,000 per year (510 companies keeping records × $80 cost of keeping records).

(2e) Providing any other name

As of March 2022, there were approximately 3 500 MDEL holders. As determined from an industry stakeholder survey sent to all MDEL holders in January 2022, it is expected that approximately 6% of MDEL holders have previously conducted MDR activities under another company name and would be required to compile and submit any previous names. Also, in the same MDEL survey, respondents indicated the expected costs for compiling and providing previous names would be approximately $365.

It is assumed that compiling and submitting previous company names would be a one-time cost for companies to submit after the proposed regulations come into force. Assuming 6% of current MDEL holders would be affected, the estimated number of companies expected to provide another name is estimated to be 210 (3 500 total MDEL holders × 6% with previous names). Therefore, the estimated one-time cost to current MDEL holders is expected to be approximately $77,000 (210 companies × $365 per company).

(2f) Providing updated contact information

There is expected to be a negligible cost to industry for providing updated contact information on a MDEL application when the proposed regulations come into force, and for notifying Health Canada of changes to that information thereafter. Contact information is expected to consist of an updated phone number and email address, where a phone number is already required under the current regulations. Email addresses are requested as part of the MDEL application; however, it has not been a regulatory requirement. Health Canada has found that industry members have email addresses readily available and have provided the information voluntarily; however, they are not always updated. When email addresses are outdated, Health Canada needs to find alternative forms of communication to reach the regulated party. There may be some costs to industry to provide updated contact information; however, the cost of doing so is expected to be negligible.

(2g) MDEL terms and conditions

The proposed terms and conditions amendment is expected to provide the Minister with the broad authority to impose or amend terms and conditions, at any time, on a MDEL. Terms and conditions could be imposed but are not limited to scenarios where there are uncertainties or risks relating to the MDEL holder’s ability to manage health risks associated with the importation or sale of a medical device. Terms and conditions are expected to be issued following a potential non-compliance found during inspections and are assumed to require some corrective action.

Health Canada has historically, on average, had around 10 higher risk medical device inspections a year; it is assumed that in these circumstances terms and conditions would be applied. From the MDEL stakeholder survey’s questions on the historical and expected costs of terms and conditions, an average estimated cost of $8,000 per term and condition was found. This estimate is based on a limited number of responses with some variance.

Assuming approximately 10 terms and conditions would be issued each year, the estimated cost to industry for terms and conditions is around $80,000 per year ($8,000 per term and condition × 10 companies).

Costs to Government

(1) Drugs

(1a) Reporting drug recalls to Health Canada

The proposed additional drug recall reporting requirements are not expected to significantly increase Health Canada’s workload to analyze and input the additional information. When industry submits a recall report, the information that is currently required by the FDR to be provided to Health Canada does not give Health Canada enough information to assess the depth and level of recall that needs to be taken. Health Canada currently requests additional recall information for every recall, whether the information is expected through guidance documents or through policy. Most industry members currently follow these guidance recommendations regarding recall information requests. The recall reporting form and internal databases would need to be updated as a result of the proposed amendments; however, these costs are expected to be minimal. Therefore, since generally the information is already being collected, it is estimated that there are no new costs incurred by Health Canada.

(1b) Drug recalls ordered by the Minister

Reporting recalls ordered by the Minister is expected to have a low cost to government. Health Canada expects its processes and systems to be updated as a result of the proposed amendments; however, the costs to update are expected to be minimal as the information collected from the proposed reporting requirements for recalls ordered by the Minister and voluntarily initiated recalls are similar.

(1c) Designated regulatory authorities

The proposed amendments would establish an ambulatory list of designated regulatory authorities that would be incorporated by reference in the FDR. This would require the creation and publication of the list on a Government of Canada website, which is expected to have a one-time start-up cost of approximately $11,000.

Health Canada would also be responsible for reviewing and maintaining the list in accordance with Health Canada’s Incorporation by Reference Policy. Based on historical program data, there have been around 10 updates to Canada’s MRAs over the past 10 years, which would require an update to an incorporated-by-reference list. Therefore, it is anticipated that the incorporated-by-reference list would be reviewed once every year and updated as appropriate. This ongoing cost to Health Canada is expected to be around $10,600 per year.

(2) Medical devices

(2a) 24-Hour medical device recall reporting

Amendments to the MDR to include current guidance recommendations for recall reporting within 24 hours of a recall are anticipated to have a low impact on Health Canada. Health Canada’s guidance for medical device recalls currently expects industry to report recalls within a 24-hour period and industry has generally been compliant with this guidance to date.

While the 24-hour reporting requirement may require some companies to report sooner than under the current MDR, it is generally expected that these reports are already sent to Health Canada in a short period of time after deciding to conduct a recall. While Health Canada may receive more recall information sooner than under the current regulations, it is assumed that Health Canada is able to handle the impact of these new regulatory timelines, and processing of recall reporting is not expected to change as a result of the proposed amendment.

(2b) Reporting medical device recalls ordered by the Minister

Recalls are classified as Type I when there is a serious or imminent risk to health. Therefore, in most cases, under the current regulations a Minister-ordered recall would result in a Type I recall. If the Minister was to not issue a recall order, it is expected that industry would voluntarily initiate the recall and proceed with a Type I recall. It is expected that due to the risk profile of these recalls that companies that are issued an order to recall would have still conducted the recall and followed the regulatory reporting requirements. Health Canada expects its processes and systems to be updated as a result of the proposed amendments; however, the costs to update are expected to be minimal as the information collected from the proposed reporting requirements for recalls ordered by the Minister and voluntarily initiated recalls are similar.

(2c) Recall record keeping

Health Canada does not anticipate increased costs because of this proposed amendment. Inspectors currently verify recall records during inspections; as such, the cost for inspectors to verify these recall records is already factored into the inspection cost by Health Canada. Additional training for inspectors may be required with minimal cost that will be absorbed internally.

(2d) Providing any other name

A minimal impact to Health Canada is expected to result from the proposed regulatory requirement for MDEL applicants to provide any other name under which the applicant previously conducted activities under the MDR. Previous names have been requested on the MDEL application form, but this has not been a regulatory requirement. The additional workload for Health Canada to enter this information is considered negligible and current data systems are equipped to manage any additional information that was not provided voluntarily.

(2e) Providing updated contact information

There is expected to be a minimal cost impact to Health Canada from receiving additional, updated contact information on MDEL applications. Contact information, including an email address, is currently requested as part of the MDEL application; however, it is not a regulatory requirement. The proposed amendment to require contact information would permit the Minister to require that an email address be provided to meet the amended provision. In general, most of industry currently provides email contact information voluntarily. The regulatory amendment to require an applicant to provide contact information would require MDEL holders to update the contact information. As a result of the proposed regulatory amendment, it is assumed there would be additional work done by Health Canada as more MDEL holders update their information. This cost is expected to be very low, and Health Canada would manage additional workload costs within existing resources.

(2f) MDEL terms and conditions

Terms and conditions for MDELs would be a new regulatory instrument for Health Canada. Health Canada is expected to incur new incremental costs through creating new standard operating procedures, and managing the terms and conditions issued. Health Canada has historically, on average, had around 10 higher risk medical device inspections a year; it is assumed that in these circumstances terms and conditions would be applied. While all terms and conditions may not require a follow-up site inspection, it is assumed for the analysis that Health Canada would conduct a re-inspection following all terms and conditions issued. Based on internal data, on average, a single inspection costs Health Canada around $5,500. Therefore, the cost to government for managing terms and conditions is expected to be $55,000 per year ($5,500 per term and condition x 10 terms and conditions).

Costs to Canadians

The proposed amendments are not expected to impose any costs on Canadians, and it is anticipated that there would be no impact on their supply of drugs and medical devices.

Benefits

Benefits to industry

(1) Drugs

(1a) Designated regulatory authorities

The list of designated regulatory authorities is expected to provide clarity to industry by clearly outlining the jurisdictions with which Canada has a MRA, and their respective scopes. The current table in the FDR is outdated and could cause confusion for industry when determining the jurisdictions Canada has a MRA with, and what information must be submitted to Health Canada when applying for or amending a DEL. For example, a certificate of GMP compliance provided to the Department by the designated regulatory authority of a jurisdiction that has a MRA with Canada is the only evidence required to prove that an establishment in that jurisdiction is compliant with GMP requirements (GUI-0080). The introduction of an ambulatory incorporated-by-reference list would allow the list to be updated more frequently and would provide clarity to industry to prevent the duplication of submitted information.

(1b) Finished product testing

The proposed conditional exemption of certain products from finished product testing is expected to reduce costs for industry. Under the current regulations, certain regulated parties face challenges with finished product testing due to the nature of their products. This process can be costly and time consuming, which can result in delays in getting the products to patients. Health Canada has, on a case-by-case basis, chosen to not prioritize enforcement with respect to finished product testing for these products when alternative risk mitigation measures and safety controls have been implemented. Currently, regulated parties who face challenges with performing the finished product testing due to the nature of the product inform Health Canada of these issues on a case-by-case basis. Health Canada reviews these cases and decides whether to assign a low enforcement priority based on the unique situation presented. The proposed regulations would scope in additional products that may not have been assigned a low enforcement priority. Therefore, companies whose products have not been assigned a lower enforcement priority are expected to see savings from no longer being required to conduct finished product testing on all final batches of their product.

A 2013 article in the Journal of Cytotherapy was referenced to estimate the savings received for companies that would no longer have to conduct finished product testing.^{footnote 5} The article estimates the cost of a quality management system, which includes media fill, process validation, and finished product testing, to be $10,000 in 2022 dollars. The research does not identify the specific cost of finished product testing, but it is assumed that finished product testing would represent between a third and all of the quality management system’s cost. Therefore, it is estimated that companies would save around $6,500 on average based on the midway point between $3,300 and $10,000 per test.

Using a 2020 paper on cell therapy manufacturing, also from the Journal of Cytotherapy,^{footnote 6} it is estimated that, on average, a company produces around 14 cell therapy batches per year that would no longer need testing. Therefore, companies receiving testing exemptions after the proposed regulations come into force are expected to see a cost savings of approximately $91,000 per year (14 batches per year x $6,500 per test).

Health Canada estimates that around 60 new products would now fall under the proposed regulations that have not previously received lower enforcement priority. Therefore, the total savings for industry is estimated to be $5,460,000 per year ($91,000 savings per company x 60 products per year).

(2) Medical devices

(2a) Reporting recalls based on risk

It is assumed that very few Type III recalls would be reported to Health Canada given the proposed amendments; therefore, industry is expected to see a cost savings by no longer reporting the majority of these Type III recalls. Using data received from the MDEL industry stakeholder survey, it was found that, on average, the cost of reporting recall information to Health Canada is approximately $1,500 per recall report. Using a 2017 paper^{footnote 3} on medical device recalls in Canada from 2005 to 2015, it was found that there were 7 226 medical device recalls over a 10-year period. Of those 7 226 recalls, 2 524 were Type III recalls. Assuming there is an even distribution over the ten years, the number of Type III medical device recalls is around 250 a year. Using the average estimated recall reporting cost, the cost savings from removing the reporting requirements for Type III recalls are expected to be around $375,000 per year ($1,500 per report x 250 recalls).

(2b) MDEL terms and conditions

Terms and conditions are expected to allow Health Canada to provide greater flexibility when enforcing the MDR. Terms and conditions could be used as a targeted tool to address non-compliance and/or uncertainty. To provide a licence holder with greater flexibility to continue operating, terms and conditions could be considered prior to suspending a MDEL.

Benefits to Government

(1) Drugs

(1a) Reporting drug recalls to Health Canada

The proposed requirement to provide additional recall reporting information to Health Canada is expected to aid Health Canada in providing more effective and efficient management and oversight of drug recalls in Canada.

(1b) Designated regulatory authorities

The list of designated regulatory authorities provides clarity to both industry and Health Canada. The current list of designated regulatory authorities in the FDR is outdated and requires regulatory amendments to update, which can be a time-consuming process. The creation of an ambulatory incorporated-by-reference list to reflect the current status of these agreements would allow Health Canada to update the list as needed to keep it current rather than having to undertake a regulatory amendment each time as required under the current regulations.

(1c) Finished product testing

The proposed conditional exemption of certain products from finished product testing is expected to provide savings to Health Canada by reducing the work related to products that would likely be assigned a lower enforcement priority for finished product testing under the current regulations. Under the current regulations, regulated parties who face challenges with performing finished product testing, due to the nature of the product, inform Health Canada of these issues on a case-by-case basis. Health Canada reviews the information and decides whether to assign a low enforcement priority based on the unique situation presented.

The proposed amendments would reduce the work needed to address products that experience challenges with finished product testing since such products would be exempted from finished product testing.

(2) Medical devices

(2a) Reporting recalls based on risk

The anticipated reduced reporting of recalls of medical devices that are unlikely to cause adverse health consequences is expected to be a cost savings for Health Canada. With industry no longer reporting these recalls, Health Canada would realize potential cost savings through no longer managing these reports and would be able to focus resources on higher-risk recall reports.

It is assumed that, as a result of the proposed amendments, very few Type III recalls would be reported to Health Canada. Referencing program information, Type III recall report processing costs Health Canada around $30 per report on average. Health Canada expects to receive around 250 fewer reports each year on average, leading to a cost savings of around $7,500 per year ($30 per report x 250 reports).

(2b) Recall record keeping

Including record-keeping requirements for medical device recalls would be required in light of most Type III recalls no longer being reported to Health Canada. A requirement to keep records of recalls would provide Health Canada with access to Type III recall records. By requiring the recall records to be kept, inspectors designated under the Act would be able to properly verify if the recall had been completed and evaluate the effectiveness of the recall. Without the addition of record keeping, the removal of reporting Type III medical device recalls to Health Canada would lead to a reduction in oversight over the medical device industry as Health Canada would not have any knowledge of a Type III recall if it is not reported. This proposed amendment would give Health Canada the ability to verify that companies are correctly classifying recalls and that they are not under-reporting higher risk recalls by classifying them as Type III.

(2c) Providing any other name

Under the current MDR, when a new applicant is applying for a MDEL, Health Canada examines the information provided on the application and checks past databases to determine if an applicant had conducted activities previously under a different name. While searching for previously used names, Health Canada can more easily identify companies with a history of non-compliance that are applying for a new MDEL. By requiring companies to submit previous names, Health Canada expects time savings during the initial search for previous non-compliances and improved oversight over companies.

(2d) Providing updated contact information

Amending the regulations to require MDEL applicants to provide and update contact information is expected to give Health Canada some small savings by no longer needing to find alternative means of communication with industry if contact information is not kept up to date.

Benefits to Canadians

(1) Drugs

(1a) Finished product testing

The proposed conditional exemption from finished product testing for certain products is not expected to impose any costs on Canadians and may improve access to drugs that are granted this exemption. The exemption from finished product testing for these products is not expected to decrease their safety or efficacy. Finished product testing for the targeted products can be a time-consuming process and can lead to delays in the receipt of a final product. Removing the time needed for finished product testing is expected to allow for product to reach the market faster than under the current FDR and may result in consumers receiving more of these products.

(2) Medical devices

(2a) MDEL Terms and Conditions

Terms and conditions would increase Health Canada’s flexibilities to complete targeted compliance and enforcement compared to the current MDR. Targeted enforcement could allow for more products to reach the market and could help reduce shortages of medical devices. Therefore, Canadians could be able to access more medical devices than under the current MDR.

Summary totals

Summary total

The monetized benefits are estimated at $5,817,052 per year (annualized), or $40,856,537 (PV) over 10 years (discounted at 7%). These estimates include the savings from no longer conducting finished product testing for certain products, and from no longer reporting and reviewing much of the Type III medical device recalls. The total quantifiable costs are approximately $187,917 per year (annualized), or $1,319,853 (PV) over 10 years (discounted at 7%). These costs would be offset by a number of qualitative and quantitative benefits, such as the expected increase in products available to Canadians and the removal of unnecessary burden to industry. Overall, the net monetized impact is estimated at $39,536,684 (PV) in benefits over 10 years or $5,629,134 per year (annualized).

Cost-benefit statement

• Number of years: 10 years (2023 to 2032)
• Base year for costing: 2022
• Present value base year: 2023
• Discount rate: 7%
• Sum of values may not equal totals due to rounding

Table 1: Monetized costs

Impacted stakeholders	Description of cost	Base year Year 1	Final year Year 10	Total 10-year present value	Annualized value
Industry	Recall record keeping	$41,000	$41,000	$287,967	$41,000
	Providing any other names	$77,000	$0	$71,963	$10,246
	MDEL terms and conditions table b1 note a	$40,000	$80,000	$524,503	$74,677
Government	Establishing and updating the list of designated Regulatory Authorities	$11,000	$10,600	$74,824	$10,653
	Processing MDEL Terms and Conditions table b1 note b	$27,500	$55,000	$360,596	$51,341
All stakeholders	Total costs	$196,500	$186,600	$1,319,853	$187,917
Table b1 note(s) Table b1 note a First year costs have been prorated as the proposed regulation would come into force after a six-month transition period after the regulations are registered. Return to table b1 note a referrer Table b1 note b First year costs have been prorated as the proposed regulation would come into force after a six-month transition period after the regulations are registered. Return to table b1 note b referrer

Table 2: Monetized benefits

Impacted stakeholders	Description of benefit	Base year Year 1	Final year Year 10	Total 10-year present value	Annualized value
Industry	Finished product testing savings	$5,460,000	$5,460,000	$38,348,755	$5,460,000
	Reporting savings: recalls based on risk	$187,500	$375,000	$2,458,609	$350,051
Government	Processing savings: reporting recalls based on risk	$3,750	$7,500	$49,172	$7,001
All stakeholders	Total benefits	$5,651,250	$5,842,500	$40,856,537	$5,817,052

Table 3: Summary of monetized costs and benefits

Impacts	Base year Year 1	Final year Year 10	Total 10-year present value	Annualized Value
Total costs	$196,500	$186,600	$1,319,853	$187,917
Total benefits	$5,651,250	$5,842,500	$40,856,537	$5,817,052
Net benefit	$5,454,750	$5,655,900	$39,536,684	$5,629,134

Small business lens

In 2021–2022, around 35%–45% of DEL and MDEL holders qualified as a small business. The proposed amendments are expected to affect both large and small businesses.

The proposed amendments concerning which recalls are to be reported to the Minister, the list of designated regulatory authorities, the exemption of finished product testing for certain drug products, and the ability to issue terms and conditions on a MDEL, are all expected to benefit small businesses.

Due to the costliness of finished product testing for certain drug products, companies that are small businesses may benefit more relative to larger businesses, as the high testing costs could be a barrier to entering the market. Lower costs could see smaller businesses entering the market for specialized drug products.

Terms and conditions on a MDEL, for example, could also allow a small business to continue to operate compliant activities and generate revenue when the entirety of their activities otherwise may have been suspended or cancelled. While these proposed new compliance and enforcement tools are not unique to small businesses, it is expected that the tools would enable Health Canada to take a more flexible and risk-based approach on a case-by-case basis to compliance and enforcement, which could take into account different realities faced by small businesses.

Amendments that provide additional clarity would also benefit small businesses since many may not have dedicated regulatory affairs employees that would be familiar with the requirements. For example, having a list of designated regulatory authorities incorporated by reference would reduce the confusion a small business has when determining what information is required to be submitted to Health Canada. For instance, submitting evidence of GMP compliance from a designated regulatory authority within a country that has a MRA with Canada would reduce the burden for small businesses and would reduce the amount of information submitted to Health Canada when applying for or amending a DEL.

For the proposed amendments concerning additional recall reporting requirements, recalls ordered by the Minister, terms and conditions, and keeping recall records, alternative compliance mechanisms were not considered. While flexibilities were considered and could be built into the proposed regulations to benefit small businesses, it was determined that such measures could cause direct risks to the health and safety of Canadians, which Health Canada is not willing to compromise.

One-for-one rule

The proposed amendments would create new provisions within existing sections of the FDR and the MDR. These proposed new rules would create new incremental administrative burden on holders of MDELs.

Increases in administrative burden

The new administrative burdens for MDEL holders would relate to the additional record-keeping requirements for recalls, and the compiling and submitting of previous names under which an applicant has conducted activities under the MDR. While terms and conditions could add on requirements that add administrative procedures, the application of terms and conditions would be directly related to protecting the health and safety of Canadians. Therefore, the costs of fulfilling the terms and conditions are not considered an administrative burden as defined by the Red Tape Reduction Act as their primary purpose is for protecting health and safety and not for ensuring compliance.

The proposed amendments would require companies to keep recall records for an additional two years more than what is currently practised by industry and are assumed to require the addition of one extra hour of a regulatory affairs employee’s time each year, plus digital storage costs.

Additionally, submitting previous names under which an applicant has conducted activities under the MDR is expected to have a one-time administrative cost for companies in year one through compiling and submitting these previous names to Health Canada.

The method used for estimating the administrative burden is established by the Red Tape Reduction Regulations, which prescribe that one-for-one values are reported using 2012 prices, discounted to a base year of 2012, and reported as an annualized amount. When applying these parameters, these proposed amendments are expected to increase the administrative burden by an estimated annualized total of $19,591 in 2012 dollars and an estimated annualized cost per business of $13.29.

Since the proposed amendments would result in an administrative burden, the one-for-one rule applies, and administrative burdens are considered an “IN” under the rule. The incremental administrative cost of the proposed regulations would be offset by an equivalent reduction in the administrative credits available within the health portfolio. No new regulatory titles would be introduced and no existing regulatory titles would be repealed.

Regulatory cooperation and alignment

Health Canada’s international responsibilities respecting recalls

Health Canada notifies international partners of recalls in accordance with voluntary or legally binding commitments and agreements negotiated with those partners. For drugs, Canada’s responsibilities under existing MRAs are stipulated in those agreements and include an alert notification to partner authorities of recalls, as appropriate, to the level of risk of the product recalled. Several voluntary agreements for international exchange of information on recalls and incidents also exist. These include

• For medical devices, information on high-risk recalls disclosed under the International Medical Device Regulators Forum National Competent Authority Report exchange program, which includes regulators from Australia, Brazil, Canada, China, Europe, Japan, Russia, Singapore, South Korea, and the United States.
• Courtesy copies to individual countries as appropriate for Type I and II health risk classifications (e.g. Pharmaceutical Inspection Co-operation Scheme (PIC/S) members).

Health Canada makes efforts to inform foreign authorities of the status of any products exported from Canada that pose a serious health risk, where no such agreements are in place.

The proposed amendments would support these international responsibilities by improving clarity around the reporting obligations for industry, specifically clarifying the timelines for industry to comply with the regulations.

Designated regulatory authorities

A regulatory authority is considered designated by virtue of the FDR and includes authorities located within jurisdictions that have a MRA with Canada, in respect of the identified scope of products (e.g. finished dosage form, active pharmaceutical ingredients, veterinary products, or drugs for human use). These MRAs represent the recognition of GMP in a jurisdiction as equivalent to our own in Canada and are a fundamental component of the establishment licensing framework. The collaborative work between Canada and its international partners through MRAs is a key driver for these proposed amendments and would support clear and accurate regulations for DEL holders.

Finished product testing

The proposed regulations would allow importers and distributors to rely on the results from release testing conducted by the foreign fabricator and would be more closely aligned with advanced therapeutic product frameworks in the United States and the European Union.

Alignment of the Medical Devices Regulations

In December 2019, Medtech Canada submitted a proposal to the Canada–United States Regulatory Cooperation Council recommending Health Canada improve international alignment respecting medical device regulations. One of these recommendations was to change the term “recall” to “field safety corrective action” to align with the European Union. Departmental analysis conducted indicated that adopting different terminology (i.e. field safety corrective action) in the MDR may impact other regulatory frameworks under the Act.

Industry stakeholders have also requested that Health Canada better align with our international partners by limiting recall reporting to those recalls that are conducted for safety reasons. The United States does not require manufacturers and importers to report events categorized as Class III recalls (equivalent to Type III in Canada) but does require that these recall records be kept for two years beyond the projected useful life of the device. The European Union, Switzerland, and the United Kingdom require reporting of field safety corrective actions (including recalls) taken to prevent or reduce the risk of a serious medical device incident. These jurisdictions also require that manufacturers maintain records of non-serious incidents and any actions taken.

The proposed amendment would specify which manufacturer or importer-initiated recalls must be reported and remove the current requirement to report all recalls. Recalls that present a risk of injury to health would continue to need to be reported whereas recalls that are not likely to cause any adverse health consequences would not need to be reported. Records of all recalls would be required to be kept. This proposed amendment is expected to address Medtech’s concerns regarding alignment and competitiveness and would contribute to minimizing regulatory differences with key trading partners.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that there would be no important environmental effects, either positive or negative; therefore, a strategic environmental assessment is not required.

Gender-based analysis plus

These proposed amendments are expected to broadly benefit the health of all people in Canada who use, or may use, drugs and medical devices. The proposed amendments are not expected to negatively impact people in Canada based on their gender, race, culture, language, age, or other personal or group characteristics.

Enhanced oversight over therapeutic product recalls

The severity and frequency of health risks associated with drugs and medical devices varies based on several biological and physical factors, such as age and sex, as well as race and gender biases in research design, product development, diagnosis, and treatment. The burden of illness or injury does not fall equally on people in Canada, and disproportionately affects vulnerable populations who face greater health risks and have fewer resources to maintain and improve their health, such as racialized and Indigenous peoples, and people with lower socio-economic status. Other groups, such as seniors and people with disabilities, also use therapeutic products more frequently than other populations.^{footnote 7}

Evidence suggests that certain vulnerable populations may be at greater risk of adverse reactions to drugs and medical devices. In Canada and abroad over the last sixty years, several drugs and medical devices have caused serious health problems leading to recalls or safety advisories, with a disproportionate impact on women.^{footnote 8} Changes in the recall framework for medical devices and drugs would affect women, seniors, neonates, Indigenous peoples, and people with disabilities and health conditions to a greater extent than the general population, given their more prevalent exposure to these therapeutic products. The proposed amendments to the recall frameworks for drugs and medical devices would enable Health Canada to obtain necessary information to evaluate the effectiveness of the recall, monitor the recall’s progress, and intervene if needed. Health Canada monitors therapeutic product recalls and may engage with the regulated party to collect additional information in cases where recalls pose a greater risk to health or when a specific vulnerable population is affected.

Improving capacity to protect the supply of therapeutic products

All people in Canada would benefit from having their supply of medical devices secured, but some communities in Canada are more affected by medical device shortages than others. For example, in the early waves of the COVID-19 pandemic, medical device shortages were more acute in Northern and Indigenous communities. Immigrants and visible minorities were also disproportionately represented in sectors that faced shortages of personal protective equipment and greater exposure to COVID-19, including frontline and service workers.^{footnote 9}

The proposed amendments respecting the modernization of the MDEL framework, such as the use of terms and conditions, could help to maintain access to medical devices by allowing business continuity while non-compliances are addressed.

Each individual shortage may disproportionately impact a population depending on the condition that the medical device is used to treat. Given the current information about medical device shortages, the unpredictable nature of shortages, and the impact they can have on supply for vulnerable populations, consideration could be given to allowing vulnerable populations access to medical devices with the use of terms and conditions.

An amendment to the FDR would require, in the case of a voluntarily initiated recall, the manufacturer or importer to assess the effect that the recall may have on their ability to meet demand for the drug in Canada. This would allow Health Canada to evaluate the appropriateness of the proposed recall action. For example, if a medically necessary niche product would be completely removed from the market due to a recall, Health Canada could consider relying on other regulatory tools to mitigate risk to health while protecting Canada’s drug supply.

Implementation, compliance and enforcement, and service standards

Implementation

Implementation activities, such as the training of staff, the development of standard operating procedures, and the updating of forms, internal databases, and the Department’s website, would be needed to support these amendments. Updated guidance documents and any corresponding templates and forms created by the Department would be available to aid regulated parties in coming into compliance before the regulations come into force.

Compliance and enforcement

Compliance and enforcement of the proposed regulations would be in accordance with a risk-based approach, aligned with existing departmental policies, including compliance promotion and monitoring and enforcement activities in accordance with Health Canada’s Compliance and Enforcement Policy for Health Products (POL-0001). Health Canada employs a wide range of compliance and enforcement actions and tools. The actions, tools, and level of intervention used are dependent on the situation, context, and risk to health. Some actions and tools are designed to help regulated parties understand their responsibilities under the law (e.g. compliance promotion), while other actions and tools are designed to induce compliance with the law. When necessary, enforcement actions are used to address non-compliance with the law. For example, failure to comply with terms and conditions would be a contravention of section 21.7 of the Act and could result in the Department taking compliance and enforcement action in accordance with POL-0001.

Service standards

Health Canada does not anticipate a change in service standards associated with a DEL or a MDEL as a result of the proposed amendments.

Contact

Danny Lepage
Acting Director
Compliance Policy and Regulatory Affairs Division
Policy and Regulatory Strategies Directorate
Regulatory Operations and Enforcement Branch
Health Canada
Address Locator: 1907A
200 Eglantine Driveway
7th Floor
Ottawa, Ontario
K1A 0K9
Email: hc.prsd-questionsdspr.sc@hc-sc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council proposes to make the annexed Regulations Amending the Food and Drug Regulations and the Medical Devices Regulations (Recalls, Establishment Licences and Finished Product Testing) under section 30^{footnote a} of the Food and Drugs Act ^{footnote b}.

Interested persons may make representations concerning the proposed Regulations within 75 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Danny Lepage, Acting Director, Compliance Policy and Regulatory Affairs, Policy and Regulatory Strategies Directorate, Regulatory Operations and Enforcement Branch, Health Canada, Address Locator: 1907A, 200 Eglantine Driveway, Tunney’s Pasture, Ottawa, Ontario K1A 0K9 (email: prsd-questionsdspr.sc@hc-sc.gc.ca).

Ottawa, March 31, 2023

Wendy Nixon
Assistant Clerk of the Privy Council

Regulations Amending the Food and Drug Regulations and the Medical Devices Regulations (Recalls, Establishment Licences and Finished Product Testing)

Food and Drug Regulations

1 Section C.01.051 of the Food and Drug Regulations ^{footnote 10} and the heading before it are replaced by the following:

Recall Reporting

C.01.051 (1) If a manufacturer who sells a drug in dosage form or an active ingredient or a person who imports into and sells a drug in dosage form or an active ingredient in Canada decides to recall any of those drugs without being ordered to do so by the Minister, the manufacturer or importer shall, within 24 hours after making the decision, provide the Minister with the following information in writing:

• (a) the drug’s proper name or the common name, if there is no proper name;
• (b) an indication as to whether the drug is a drug in dosage form or an active ingredient;
• (c) in the case of a drug in dosage form,
  • (i) the brand name,
  • (ii) the drug identification number assigned under subsection C.01.014.2(1),
  • (iii) the dosage form,
  • (iv) the strength,
  • (v) the names of the persons in Canada, other than consumers that purchased the drug at the retail level, to whom the drug was sold by the manufacturer or importer and the quantity sold to each of the named persons, and
  • (vi) an assessment of the effect that the recall may have on the manufacturer’s or importer’s ability to meet demand for the drug in Canada;
• (d) the lot numbers of the drug;
• (e) the dates of fabrication of the drug;
• (f) the expiration dates of the drug;
• (g) the quantity of the drug that was fabricated in Canada;
• (h) the quantity of the drug that was imported;
• (i) the quantity of the drug that the manufacturer or importer sold to persons in Canada and the period during which it was sold;
• (j) the quantity of the drug that the manufacturer or importer exported, as well as the quantity exported, by country;
• (k) the quantity of the drug in Canada that is in the possession or control of the manufacturer or importer;
• (l) an assessment of the risk of injury to human health posed by the drug, including because of a failure of its effectiveness;
• (m) the names and civic addresses of the manufacturer and fabricator of the drug and of any importers of the drug;
• (n) the name and contact information of the individual who is responsible for the recall;
• (o) the expected dates for the start and completion of the recall; and
• (p) the reasons for the recall and the date on which and manner in which the situation that prompted the recall was discovered.

(2) The manufacturer or importer shall

• (a) before starting the recall, provide the Minister with a copy of any communications that the manufacturer or importer intends to use in connection with the start of the recall; and
• (b) after starting the recall, provide the Minister, on request and within the time specified by the Minister, with a copy of any additional communications that the manufacturer or importer uses, or intends to use, in connection with the recall.

(3) The manufacturer or importer shall, within 72 hours after making the decision to recall the drug, provide the Minister with the following information in writing:

• (a) the strategy for conducting the recall, including the time and manner in which the Minister will be informed of the progress of the recall; and
• (b) a description of the measures that are intended to be taken to prevent a recurrence of the situation that prompted the recall.

(4) The manufacturer or importer shall, within 30 days after completing the recall, provide the Minister with the following information in writing:

• (a) the results of the recall; and
• (b) a description of the measures that have been or will be taken to prevent a recurrence of the situation that prompted the recall.

(5) In this section and in section C.01.051.1, active ingredient and fabricate have the same meaning as in subsection C.01A.001(1).

C.01.051.1 (1) A person who is ordered by the Minister under section 21.3 of the Act to recall a drug in dosage form, or an active ingredient, shall provide the Minister with the following information in the time and manner specified by the Minister:

• (a) the quantity of the drug that has been sold by the person at the retail level to consumers in Canada;
• (b) if the person has sold the drug to persons in Canada other than consumers referred to in paragraph (a),
  • (i) the names of those persons and the quantity that has been sold to each of them, and
  • (ii) the period during which the drug was sold to those persons;
• (c) the quantity of the drug that the person has exported from Canada, as well as the quantity exported by country;
• (d) the quantity of the drug in Canada that is in the possession or control of the person;
• (e) the name, title and contact information of an individual from whom the Minister may obtain additional information concerning the recall;
• (f) the strategy for conducting the recall;
• (g) any other information that the Minister has reasonable grounds to believe is necessary to mitigate the risk of injury to human health; and
• (h) if the person is in a position to prevent a recurrence of the situation that prompted the recall, a description of the measures that they intend to take to prevent a recurrence.

(2) The person shall notify the Minister without delay of any change to the information referred to in paragraph (1)(e).

(3) The person shall

• (a) before starting the recall, provide the Minister with a copy of any communications that the person intends to use in connection with the start of the recall; and
• (b) after starting the recall, provide the Minister with, on request and within the time specified by the Minister, a copy of any additional communications that the person uses, or intends to use, in connection with the recall.

(4) The person shall notify the Minister in writing, within 24 hours, of the start and completion of the recall.

(5) The person shall, within 30 days after completing the recall, provide the Minister with the following information in writing:

• (a) the results of the recall; and
• (b) if the person is in a position to prevent a recurrence of the situation that prompted the recall, a description of the measures that they have taken or will take to prevent a recurrence.

2 Section C.01A.019 of the Regulations is replaced by the following:

C.01A.019 (1) For the purposes of this Division and Divisions 2 to 4, a regulatory authority that is set out in column 1 of the List of Regulatory Authorities for the Purposes of Section C.01A.019 of the Food and Drug Regulations, published by the Government of Canada on its website, as amended from time to time, is designated in respect of the activities set out in column 3 for the drugs or category of drugs set out in column 2.

(2) Whole blood and its components are excluded from the drugs and categories of drugs that are set out in column 2 of the List.

(3) The lot release of drugs listed in Schedule D to the Act is excluded from the activity of testing set out in column 3 of the List.

3 Paragraph C.02.012(1)(a) of the French version of the Regulations is replaced by the following:

• a) un système de contrôle qui permet le rappel rapide et complet de tout lot ou tout lot de fabrication de la drogue se trouvant sur le marché;

4 (1) The portion of subsection C.02.019(1) of the French version of the Regulations before subparagraph (b)(i) is replaced by the following:

C.02.019 (1) L’emballeur-étiqueteur d’une drogue, le distributeur visé à l’alinéa C.01A.003b) et l’importateur d’une drogue autre qu’un ingrédient actif font l’analyse du produit fini sur un échantillon de la drogue prélevé :

• a) soit après la réception au Canada, dans leurs locaux, du lot ou lot de fabrication de la drogue;
• b) soit avant la réception du lot ou lot de fabrication dans leurs locaux, si les conditions ci-après sont réunies :

(2) Section C.02.019 of the Regulations is amended by adding the following after subsection (4.1):

(4.2) Subsection (1) does not apply to a packager/labeller, distributor or importer if the following conditions are met:

• (a) the drug is a radiopharmaceutical or a radionuclide generator, as defined in section C.03.001, and has a useful life of no more than 30 days; and
• (b) the packager/labeller, distributor or importer maintains evidence satisfactory to the Minister to demonstrate that
  • (i) the drug has been tested against the specifications for the drug,
  • (ii) the drug has not been transported or stored under conditions that may affect its compliance with the specifications.

(4.3) Subsections (1) and (2) do not apply to a packager/labeller, distributor or importer if the following conditions are met:

• (a) the drug is a gene therapy or a cell therapy; and
• (b) the packager/labeller, distributor or importer maintains evidence satisfactory to the Minister to demonstrate that
  • (i) the drug has been tested against the specifications for the drug, and
  • (ii) the drug has not been transported or stored under conditions that may affect its compliance with the specifications.

(2) The portion of subsection C.02.019(6) of the Regulations before paragraph (a) is replaced by the following:

(6) A drug that is referred to in subsection (4.2), (4.3) or (5) and that is imported may be shipped directly to a person other than the importer if the following conditions are met:

(3) Section C.02.019 of the Regulations is amended by adding the following after subsection (6):

(7) The following definitions apply in subsection (4.3).

cell therapy

means a drug in dosage form, other than a vaccine, listed in Schedule D to the Act that is for human use and that is fabricated using cells sourced from a human. (thérapie cellulaire)

gene therapy

means a drug in dosage form, other than a vaccine, listed in Schedule D to the Act that is for human use and that alters the biological properties of living cells by

• (a) modifying an endogenous nucleic acid sequence or manipulating its expression; or
• (b) introducing an exogenous nucleic acid. (thérapie génique)

5 (1) Subsection C.02.022(1) of the French version of the Regulations is replaced by the following:

C.02.022 (1) Le grossiste, le distributeur visé à l’article C.01A.003 et l’importateur d’une drogue sous forme posologique conservent les dossiers sur la vente de chaque lot ou lot de fabrication de la drogue pendant un an après sa date limite d’utilisation afin de pouvoir en faire le rappel, à moins que la licence d’établissement de l’intéressé ne prévoie une autre période.

(2) The portion of subsection C.02.022(2) of the French version of the Regulations before paragraph (a) is replaced by the following:

(2) Le distributeur d’un ingrédient actif visé à l’alinéa C.01A.003a) et le grossiste et l’importateur d’un ingrédient actif conservent les dossiers sur la vente de chaque lot ou lot de fabrication de l’ingrédient actif pendant celle des périodes ci-après qui s’applique afin de pouvoir en faire le rappel, à moins que l’intéressé ne détienne une licence d’établissement qui prévoit une autre période :

Medical Devices Regulations

6 The definition recall in section 1 of the Medical Devices Regulations ^{footnote 11} is replaced by the following:

recall

means

• (a) a recall ordered by the Minister under section 21.3 of the Act; or
• (b) any action taken by a manufacturer, importer or distributor of a medical device, after the device has been sold, to recall or correct the device, or to notify its owners and users of its defectiveness or potential defectiveness, after becoming aware that the device
  • (i) may present a risk of injury to health,
  • (ii) may fail to conform to any claim made by the manufacturer or importer relating to its effectiveness, benefits, performance characteristics or safety, or
  • (iii) may not meet the requirements of the Act or these Regulations. (rappel)

7 Paragraph 45(b) of the Regulations is replaced by the following:

• (a.1) any other name under which the person previously conducted activities under these Regulations;
• (b) the name, title and contact information of the representative of the establishment to contact for information concerning the application;

8 Section 48 of the English version of the Regulations is replaced by the following:

48 If, following the issuance of an establishment licence, there is a change to any of the information referred to in paragraph 45(a) or (b), the holder of the establishment licence shall submit the new information to the Minister within 15 days of the change.

9 The Regulations are amended by adding the following after section 48:

Terms and Conditions

48.1 The Minister may, at any time, impose terms and conditions on an establishment licence, or amend those terms and conditions, after considering the following factors:

• (a) whether there are uncertainties relating to the manner in which an activity is or will be conducted;
• (b) whether the requirements under the Act are sufficient to protect patients, users or other persons from risks to health or safety;
• (c) whether compliance with the proposed terms and conditions is feasible; and
• (d) whether there are less burdensome ways to meet the objectives of the proposed terms and conditions.

10 Section 53 of the Regulations is replaced by the following:

53 The distribution record shall contain sufficient information to permit the complete and rapid recall of the medical device.

11 Subsection 62.31(1) of the Regulations is replaced by the following:

62.31 (1) The provisions of these Regulations — other than this section and sections 44 to 62.2 and 62.32 to 65.6 — do not apply to the sale of a designated medical device that is imported under section 62.29.

12 The heading before section 63 of the English version of the Regulations is replaced by the following:

Recalls

13 The Regulations are amended by adding the following before section 63:

Recall Reporting

14 The portion of section 63 of the Regulations before paragraph (a) is replaced by the following:

63 Sections 63.2, 64 and 65 do not apply to

15 The Regulations are amended by adding the following after section 63:

63.1 Sections 63.2, 64 and 65 do not apply to a manufacturer or importer of a medical device unless the device is likely to cause injury to the health of a patient, user or other person, or could cause serious injury to the health of a patient, user or other person.

63.2 A manufacturer or importer of a medical device who decides to recall the device without being ordered to do so by the Minister shall provide the Minister with the following information, in writing, within 24 hours after making the decision:

• (a) the name of the device;
• (b) the identifier of the device, including the identifier of any medical device that is part of a system, test kit, medical device group, medical device family or medical device group family;
• (c) in the case of a licensed device, the medical device licence number;
• (d) in the case of a device for which the manufacturer holds an authorization issued under section 68.12, the authorization number;
• (e) the name and address of
  • (i) the manufacturer,
  • (ii) the establishment where the device was manufactured, if different from that of the manufacturer, and
  • (iii) the importer;
• (f) the reason for the recall, the nature of the defectiveness or potential defectiveness of the device and the date on which and the circumstances under which the defectiveness or potential defectiveness was discovered; and
• (g) a preliminary evaluation of the risk associated with the defectiveness or potential defectiveness of the device.

16 Section 64 of the Regulations is replaced by the following:

64 A manufacturer or importer of a medical device shall, on or before the day on which the manufacturer or importer begins a recall of the device that has not been ordered by the Minister, provide the Minister with the following information and documents in writing:

• (a) the name of the device;
• (b) the identifier of the device, including the identifier of any medical device that is part of a system, test kit, medical device group, medical device family or medical device group family;
• (c) in the case of a licensed device, the medical device licence number;
• (d) in the case of a device for which the manufacturer holds an authorization issued under section 68.12, the authorization number;
• (e) the name and address of
  • (i) the manufacturer,
  • (ii) the establishment where the device was manufactured, if different from that of the manufacturer, and
  • (iii) the importer;
• (f) the reason for the recall, the nature of the defectiveness or potential defectiveness of the device and the date on which and the circumstances under which the defectiveness or potential defectiveness was discovered;
• (g) an evaluation of the risk associated with the defectiveness or potential defectiveness of the device;
• (h) the number of affected units of the device that the manufacturer or importer
  • (i) manufactured in Canada,
  • (ii) imported into Canada, and
  • (iii) sold in Canada;
• (i) the period during which the affected units of the device were distributed in Canada by the manufacturer or importer;
• (j) the name of each person to whom the affected device was sold by the manufacturer or importer and the number of units of the device sold to each person;
• (k) a copy of any communication issued with respect to the recall;
• (l) the proposed strategy for conducting the recall, including
  • (i) the date for beginning the recall,
  • (ii) the time and manner in which the Minister will be informed of the progress of the recall, and
  • (iii) the proposed date of its completion;
• (m) the proposed action to prevent a recurrence of the problem; and
• (n) the name, title and contact information of the representative of the manufacturer or importer to contact for information concerning the recall.

17 The portion of section 65 of the Regulations before paragraph (a) is replaced by the following:

65 A manufacturer or importer of a medical device shall, within 30 days after completing a recall of the device that was not ordered by the Minister, provide the Minister with the following information, in writing:

18 Section 65.1 of the Regulations is replaced by the following:

65.1 (1) A manufacturer of a medical device who recalls the device without being ordered to do so by the Minister may permit the importer of the device to prepare and submit, on the manufacturer’s behalf, the information and documents that are required to be provided under sections 63.2, 64 and 65 if the information and documents that the manufacturer and importer must submit are identical.

(2) The manufacturer shall advise the Minister in writing if the manufacturer has permitted the importer to prepare and submit the information and documents referred to in subsection (1) on the manufacturer’s behalf.

65.2 (1) A person who is ordered by the Minister to recall a medical device shall provide the Minister with the following information in the time and manner specified by the Minister:

• (a) the name and address of
  • (i) the manufacturer of the device,
  • (ii) the establishment where the device was manufactured, if different from that of the manufacturer,
  • (iii) the importer of the device, and
  • (iv) the person who sold them the device, if the person who is conducting the recall is not the manufacturer;
• (b) the nature of the defectiveness or potential defectiveness of the device and the date on which and the circumstances under which the defectiveness or potential defectiveness was discovered;
• (c) the number of affected units of the device that the person
  • (i) manufactured in Canada,
  • (ii) imported into Canada, and
  • (iii) sold in Canada;
• (d) the number of affected units of the device in Canada that are in the possession or control of the person;
• (e) the period during which the affected units of the device were distributed in Canada by the person;
• (f) the number of affected units of the device that have been sold by the person at the retail level to consumers in Canada;
• (g) if the person has sold the affected device to persons in Canada other than consumers referred to in paragraph (f), the names of those persons and the number of units of the device sold to each of them;
• (h) the proposed strategy for conducting the recall, including
  • (i) the date for beginning the recall,
  • (ii) the time and manner in which the Minister will be informed of the progress of the recall, and
  • (iii) the proposed date of its completion;
• (i) the proposed action to prevent a recurrence of the problem;
• (j) the name, title and contact information of the representative of the person to contact for information concerning the recall; and
• (k) any other information that the Minister has reasonable grounds to believe is necessary to reduce the risk of injury to health.

(2) The person shall notify the Minister without delay of any change to the information referred to in paragraph (1)(j).

(3) The person shall

• (a) before beginning the recall, provide the Minister with a copy of any communications that the person intends to use in connection with beginning the recall; and
• (b) after beginning the recall, provide the Minister with, on request and within the time specified by the Minister, a copy of any additional communications that the person uses, or intends to use in connection with the recall.

(4) The person shall notify the Minister in writing, within 24 hours, of the beginning and completion of the recall.

(5) The person shall, within 30 days after completing the recall, provide the Minister with the following information in writing:

• (a) the results of the recall; and
• (b) the action taken to prevent a recurrence of the problem.

Record Keeping

65.3 A manufacturer or importer of a medical device who recalls the device without being ordered to do so by the Minister shall keep a record of the following:

• (a) a document that sets out the decision to conduct the recall, including
  • (i) the name and title of the individual who made the decision, and
  • (ii) the date the decision was made;
• (b) the date the recall was completed;
• (c) the information and documents referred to in sections 63.2, 64 and 65; and
• (d) the document provided to the Minister under subsection 65.1(2), if applicable.

65.4 (1) Subject to subsection (2), a distributor of a medical device who conducts a recall of the device that was not ordered by the Minister shall keep a record of the following:

• (a) the name of the device;
• (b) the identifier of the device, including the identifier of any medical device that is part of a system, test kit, medical device group, medical device family or medical device group family;
• (c) in the case of a licensed device, the medical device licence number;
• (d) in the case of a device for which the manufacturer holds an authorization issued under section 68.12, the authorization number;
• (e) the name and address of
  • (i) the manufacturer,
  • (ii) the establishment where the device was manufactured, if different from that of the manufacturer,
  • (iii) the importer, and
  • (iv) the person who sold them the device;
• (f) the reason for the recall, the nature of the defectiveness or potential defectiveness of the device and the date on which and circumstances under which the defectiveness or potential defectiveness was discovered;
• (g) the number of affected units of the device that the distributor sold in Canada;
• (h) the period during which the affected units of the device were distributed in Canada by the distributor;
• (i) the name of each person to whom the affected device was sold by the distributor and the number of units of the device sold to each person;
• (j) a copy of any communication issued with respect to the recall;
• (k) the results of the recall; and
• (l) the date the recall was completed.

(2) A distributor who initiates the recall shall keep a record of the following:

• (a) the information and documents referred to in subsection (1);
• (b) an evaluation of the risk associated with the defectiveness or potential defectiveness of the medical device to which the recall relates; and
• (c) the actions that were proposed and actions taken to prevent a recurrence of the problem.

65.5 A person who is ordered by the Minister to recall a medical device shall keep a record of the information and documents provided to the Minister under section 65.2.

65.6 (1) A manufacturer who is required to keep a record under section 65.3 or 65.5 shall keep it for at least the longer of the following periods:

• (a) the period that is equivalent to the projected useful life of the medical device to which the recall relates plus two years; and
• (b) the period during which the device is sold in Canada.

(2) Any other person who is required to keep a record under section 65.3, 65.4 or 65.5 shall keep it for at least a period equivalent to the projected useful life of the device to which the recall relates plus two years.

(3) For the purpose of paragraph (1)(a) and subsection (2), the retention period begins on the day on which the recall is completed.

19 Paragraph 68.03(2)(c) of the Regulations is replaced by the following:

• (c) sections 21, 23, 27, 52 to 58, 62 and 62.21 to 65.6.

20 Paragraph 88(d) of the Regulations is replaced by the following:

• (d) sections 63 to 65.6 with respect to recalls; and

Transitional Provisions

21 Unless the context requires otherwise, the words and expressions used in sections 22 and 23 have the same meaning as in the Medical Devices Regulations.

22 A person who has submitted an application for an establishment licence under section 45 of the Medical Devices Regulations before the day on which section 7 comes into force and in respect of which no decision has been made before that day must not be issued the licence unless, by that day and in the form established by the Minister, the person provides the Minister with the information referred to in paragraph 45(b) of the Medical Devices Regulations, as amended by these Regulations.

23 The holder of an establishment licence that was issued under section 46 of the Medical Devices Regulations before the day on which section 7 comes into force must, by that day and in the form established by the Minister, provide the Minister with the contact information, other than the telephone number, of the representative of the establishment to contact for information concerning the licence.

Coming into Force

24 (1) Subject to subsection (2), these Regulations come into force on the 180th day after the day on which they are registered.

(2) Sections 2 and 4 come into force on the day on which these Regulations are registered.

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