Regulations Amending the Food and Drug Regulations (Distribution of Drugs as Samples): SOR/2020-74

Canada Gazette, Part II, Volume 154, Number 9

Registration
SOR/2020-74 April 7, 2020

FOOD AND DRUGS ACT

P.C. 2020-228 April 3, 2020

Her Excellency the Governor General in Council, on the recommendation of the Minister of Health, pursuant to subsection 30(1) footnote a of the Food and Drugs Act footnote b, makes the annexed Regulations Amending the Food and Drug Regulations (Distribution of Drugs as Samples).

Regulations Amending the Food and Drug Regulations (Distribution of Drugs as Samples)

Amendments

1 Subsection C.01.001(1) of the Food and Drug Regulations footnote 1 is amended by adding the following in alphabetical order:

2 The Regulations are amended by adding the following before section C.01.048:

Distribution of Drugs as Samples

3 (1) The portion of subsection C.01.048(1) of the Regulations before paragraph (a) is replaced by the following:

C.01.048 (1) If a practitioner or pharmacist has signed an order specifying the proper name or common name, the brand name and the quantity of a drug, other than the following, the person who receives the order may distribute or cause to be distributed the drug, in dosage form, as a sample to that practitioner or pharmacist if the drug meets the requirements of these Regulations:

(2) Subsection C.01.048(1) of the Regulations is amended by adding “or” at the end of paragraph (b) and by repealing paragraph (c).

(3) Section C.01.048 of the Regulations is amended by adding the following after subsection (1):

(1.1) A person may distribute or cause to be distributed a prescription drug as a sample under subsection (1) only to a practitioner or pharmacist who is entitled, under the laws of the province in which they are practising, to prescribe or dispense that drug, as the case may be.

(4) Section C.01.048 of the Regulations is amended by adding the following after subsection (2):

(3) Despite subsection (1), a person may distribute or cause to be distributed a drug, in dosage form, as a sample to a practitioner or pharmacist without a signed order if that drug is not a prescription drug and is part of a class of drugs that is set out in column 1 of List D, and if all of the following conditions are met:

4 The portion of section C.01.049 of the Regulations before paragraph (a) is replaced by the following:

C.01.049 A person who, under subsection C.01.048(1), receives an order for and distributes or causes to be distributed a drug as a sample shall

5 The Regulations are amended by adding the following after C.01.049:

C.01.049.1 A person may distribute or cause to be distributed a drug, in dosage form, as a sample to any consumer that is 18 years of age or older if that drug is not a prescription drug and is part of a class of drugs that is set out in column 1 of List D, and if all of the following conditions are met:

6 Subsection C.08.004.1(2) of the Regulations is replaced by the following:

(2) The purpose of this section is to implement Articles 20.48 and 20.49 of the Agreement between Canada, the United States of America and the United Mexican States, as defined in the definition Agreement in section 2 of the Canada–United States–Mexico Agreement Implementation Act, and paragraph 3 of Article 39 of the Agreement on Trade-related Aspects of Intellectual Property Rights set out in Annex 1C to the Agreement Establishing the World Trade Organization, as defined in the definition Agreement in subsection 2(1) of the World Trade Organization Agreement Implementation Act.

Coming into Force

7 These Regulations come into force on the day on which section 57 of the Canada–United States–Mexico Agreement Implementation Act, chapter 1 of the Statutes of Canada, 2020, comes into force, but if they are registered after that day, they come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Issues: In order to fully implement the Canada–United States–Mexico Agreement (CUSMA), regulatory amendments to the Food and Drug Regulations (FDR) and the Natural Health Products Regulations (NHPR) are necessary for Canada to meet its commitment to permit the distribution of certain low risk non-prescription drugs (NPDs) and natural health products (NHPs) as samples under certain conditions, and to replace a reference to the North American Free Trade Agreement (NAFTA) in the FDR with a reference to the CUSMA. In addition, the list of practitioners to whom samples of prescription drugs and NPDs may be distributed is outdated and does not align with the scope of practitioners whom the provinces and territories have authorized to prescribe drugs. The omission of NHPs from the distribution of drugs as samples is outdated as well.

Description: The FDR and the NHPR will be amended to permit the distribution of certain low risk NPDs and NHPs as samples, under certain conditions. Specifically, the distribution of NPDs and NHPs as samples is initially permitted for low risk topical acne therapy products, medicated skin care products, diaper rash products, anti-dandruff products, antiseptic skin cleansers, athlete’s foot treatments and sunscreens, as well as low-risk toothpastes, mouthwashes, and throat lozenges, with well-established safety and efficacy profiles. Moving forward, NPDs regulated under the FDR could be added to or removed from the list of products that may be distributed as samples, as this list is incorporated by reference on an ambulatory basis. Changes to this list would occur through a transparent and consultative process based on safety considerations. In addition, the public distribution of these products as samples can only be made to consumers 18 years of age or older, and cannot be made within the 30 days prior to or during the month of a drug’s expiry date, as the case may be, or any time after a drug’s expiry date. These products, when distributed as samples, must meet all other regulatory requirements, including labelling, in the same way as all other NPDs and NHPs.

In addition, the list of practitioners, to whom samples of prescription drugs and NPDs may be distributed, is amended to include all practitioners captured by the definition of “practitioner” in the FDR in order to align federal law with the practitioners’ provincial scope of practice. Likewise, the NHPR are amended to permit the distribution of NHPs as samples to a practitioner or a pharmacist, under similar conditions as those established in the FDR for the distribution of drugs to a practitioner or a pharmacist.

Lastly, the FDR are amended to replace a reference to Article 1711 of NAFTA with a reference to Articles 20.48 and 20.49 of the CUSMA.

Rationale: These amendments are necessary to fully implement Canada’s CUSMA obligation to permit the distribution of certain low-risk NPDs and NHPs as samples under certain conditions, and to replace a reference to the NAFTA in the FDR with a reference to the CUSMA. For NPDs under the FDR, an ambulatory incorporation by reference approach allows Health Canada to consider the inclusion of other NPDs after further assessing the safety of such a distribution, and allows Health Canada to respond to health and safety risks of included products should they arise. The amendment to expand the scope of practitioners to whom samples of prescription drugs and NPDs may be distributed, and to permit the distribution of NHPs as samples to practitioners and pharmacists, aligns federal law with practitioners’ scope of practice under provincial and territorial law.

Issues

In order to implement the Canada–United States–Mexico Agreement (CUSMA), the Canada–United States–Mexico Agreement Implementation Act was introduced in the House of Commons on January 29, 2020. In addition to the implementing Act, regulatory amendments to the Food and Drug Regulations (FDR) and the Natural Health Products Regulations (NHPR) are necessary to fully implement Canada’s commitment to permit the distribution of certain low risk non-prescription drugs (NPDs) and natural health products (NHPs) as samples under certain conditions, and to replace a reference to the North American Free Trade Agreement (NAFTA) in the FDR with a reference to the CUSMA. An ambulatory approach to incorporating by reference a list of products, allowing Health Canada to add or remove products based on safety considerations, is more responsive than a static approach and is preferred where possible.

In addition, the list of practitioners to whom samples of prescription drugs and NPDs may be distributed is outdated and does not align with the scope of practitioners whom the provinces and territories have authorized to prescribe drugs. Many practitioners to whom samples of drugs may not currently be distributed (e.g., nurse practitioners) are relied upon by Canadians for healthcare, especially in rural, northern and remote communities. In some cases, the inability to distribute drugs as samples to these excluded practitioners may limit a patient’s access to such products, especially in instances where the patient has limited access to a physician or pharmacist, or lacks the immediate financial means to pay for a drug.

Finally, as the conditions for the distribution of samples of NHPs to practitioners and pharmacists were never established in the NHPR, samples of NHPs cannot be distributed to these health professionals for further distribution to their patients, which does not align with the scope of their practice under provincial and territorial law.

Background

Prior to the royal assent of the Canada–United States–Mexico Agreement Implementation Act, section 14 of the Food and Drugs Act (FDA) prohibited the distribution of drugs as samples other than to physicians, veterinary surgeons, dentists and pharmacists under prescribed conditions. This broad prohibition captured all drugs, including prescription drugs, NPDs and NHPs, regardless of a drug’s level of risk. Therefore, the distribution of drugs as samples to the general public (including samples of NPDs and NHPs available for purchase by the general public at retail) was prohibited. This led to repeated requests from stakeholders in order to permit the distribution of NPDs and NHPs as samples to the general public, requests which were reiterated through feedback to the Department’s sectoral Regulatory Review initiative. This feedback indicated that such a regulatory change would remove barriers to economic growth while maintaining adequate health and safety risk protections for Canadians.

The broad scope of the prohibition in the FDA has also undermined, to an extent, some public health objectives, such as the distribution of sunscreens by municipalities and public health agencies at local outdoor events. This has led to the Department’s reliance on a risk-based enforcement approach.

As part of the CUSMA, Canada committed to permitting the distribution of certain low risk NPDs and NHPs (i.e., products recognized as being at the interface of cosmetics and drugs) as samples under certain conditions, in order to reduce regulatory barriers and better align domestic oversight with that of the United States through a risk-based approach. To meet this obligation, the NHPR and the FDR are amended to permit the distribution of, and set out the conditions of distribution for, certain low risk NPDs and NHPs.

In addition, the list of practitioners previously specified in the FDA to whom samples of prescription drugs and NPDs may be distributed was consistently identified by stakeholders as outdated and not aligned with practitioners’ scope of practice under provincial and territorial law. Various nursing associations and their members advocated for the inclusion of nurse practitioners in section 14 of the FDA, especially considering that their scope of drug-prescribing closely resembles, or in many cases is identical to, that of other practitioners previously specified in the FDA. Other practitioners with prescribing authority under provincial and territorial law but who could not (prior to these amendments being made) receive samples of prescription drugs and NPDs include nurses, chiropodists (podiatrists), optometrists, naturopaths and midwives.

The Canada–United States–Mexico Agreement Implementation Act has amended the FDA to prohibit the distribution of drugs as samples except in accordance with the regulations. Several of the prescribed conditions for the distribution of drugs as samples will remain set out in the FDR, whereby a practitioner or a pharmacist must make an order for samples of a drug and the person who distributes the samples to the practitioner or pharmacist must maintain records of the distribution for at least two years. Previously, these conditions were never set out in the NHPR for NHPs and therefore, without the established conditions in regulation, NHPs remained prohibited from being distributed as samples even to the specified practitioners in section 14 of the FDA.

Objective

The objectives of these regulatory amendments are to: (1) fully implement Canada’s CUSMA commitment to permit the distribution of certain low risk NPDs and NHPs as samples, under certain conditions; (2) to allow Health Canada to consider other NPDs for distribution as samples to the general public after further analysis and to respond to health and safety risks; (3) to update the list of practitioners to whom samples of drugs may be distributed, in order to align federal law with the various practitioners’ scope of practice under provincial and territorial law; and (4) to replace a reference to Article 1711 of NAFTA in the FDR with a reference to Articles 20.48 and 20.49 of the CUSMA.

Description

Distribution of samples to the general public

The FDR and the NHPR are amended to meet Canada’s CUSMA commitment to permit the distribution of certain low risk NPDs and NHPs, under certain conditions. The FDR are specifically amended to permit the distribution of NPDs as samples through a list that is incorporated by reference on an ambulatory basis — an approach that will allow Health Canada to remove or add NPDs to the list and introduce product/class-specific qualifiers for such drugs.

Scope of products for distribution to the general public

The scope of the products permitted to be distributed as samples to the general public (i.e., a consumer) include low risk NPDs as set out in List of Certain Non-prescription Drugs for Distribution as Samples (List D) under the FDR and low risk NHPs as set out in the List of Certain Natural Health Products for Distribution as Samples under the NHPR. These initial products have well-established safety and efficacy and include topical acne therapy products, medicated skin care products, diaper rash products, anti-dandruff products, antiseptic skin cleansers, athlete’s foot treatments and sunscreens, as well as toothpastes, mouthwashes, and throat lozenges.

List D is incorporated by reference, as amended from time to time, and is published on Health Canada’s website. This approach will allow the Department to add or remove products, introduce product/class-specific qualifiers and to address safety issues, should they arise. Health Canada may consider the inclusion of new NPDs through safety assessments, ongoing classification exercises, and safety assessments conducted at the time of a new product licence application. Prior to changing List D, Health Canada will consult Canadians through a Notice of Proposal on the Department’s website and will consider all feedback provided in the following 60-day consultation period before making any decision.

The List of Certain Natural Health Products for Distribution as Samples, dated March 2020, is incorporated by reference on a static basis as published on Health Canada’s website. If the list is amended, a regulatory amendment will be required to update the reference to the amended list. An ambulatory incorporation by reference approach was not an option.

Conditions of distribution

To ensure that the distribution of drugs as samples to the general public occurs with a recipient’s full appreciation of the risks and benefits in opting to receive or use a drug, the regulatory amendments limit such distribution to individuals who are 18 years of age or more. This will help to mitigate risks, including those associated with misuse (e.g., a drug being used incorrectly or used when it is contraindicated). This will also prevent the unsolicited distribution and direct targeting of drugs as samples to children and youth. To note, a federal age restriction does not limit a province from imposing a higher age restriction, in addition to any other requirement within their authority.

In addition, the distribution of a drug as a sample to the general public cannot occur during the 30 days prior to its expiry date (if the expiry date is expressed in a day-month-year format) or during the month of its expiry date (if the expiry date is expressed in a month-year format) as well as any time after its expiry date. This will prevent the distribution or dumping of stock originally intended for retail sale as it approaches or has exceeded its expiry date. Such dumping of stock is undesirable as expired products can have a modified benefit-harm-uncertainty profile affecting their safety, quality or efficacy.

For clarity, the distribution of a drug as a sample is considered a sale under the FDA and its regulations. As such, legislative prohibitions related to advertising, sale, unsanitary conditions, and labelling of a drug apply to the distribution of a drug as a sample. Associated regulatory requirements and guidance also continue to apply in this context to regulated activities, unless otherwise exempted in the regulations. For example, this includes licensing requirements for a person who wishes to fabricate, package/label, test, import, distribute or wholesale a drug to be distributed as a sample and other FDR requirements (e.g., inner and outer labelling, and good manufacturing practices including record-keeping requirements, etc.).

Distribution of drugs as samples to practitioners and pharmacists for further distribution to their patients

The list of practitioners in the FDR to whom samples of prescription drugs and NPDs may be distributed is amended to align the scope of the prohibition with practitioners’ scope of practice under provincial and territorial law.

Scope of practitioners and the conditions of distribution

The term “practitioner” will replace physicians, veterinary surgeons, and dentists in subsection C.01.048(1) of the FDR, and the term “pharmacist” will remain. Pharmacist and practitioner are both defined terms in the FDR as individuals in a province who are entitled to practise pharmacy in that province or treat patients with a prescription drug in that province, respectively. This change permits the distribution of samples of prescription drugs and NPDs to a practitioner who is able to prescribe within their province in accordance with provincial and territorial law. In addition, a person will only be able to distribute a prescription drug to a practitioner who is able to prescribe that drug in accordance with provincial and territorial law.

The updated FDR provisions respecting the distribution of drugs as samples to practitioners and pharmacists are also introduced to the NHPR to permit the distribution of NHPs as samples to practitioners and pharmacists. The conditions of distribution to practitioners and pharmacists remain in the FDR and these conditions are likewise introduced to the NHPR. These conditions include a requirement for the practitioner or pharmacist to sign an order for samples of a drug, and a requirement for the person who distributes the samples to maintain records of that distribution for at least two years. These amendments further clarify that a practitioner or pharmacist does not have to sign an order for samples of a drug if it is permitted to be distributed to the general public. Subsequently, the person who distributes samples of a drug to a practitioner or pharmacist, that is permitted to be distributed as a sample to the general public, does not have to maintain additional records of that distribution beyond any other current and applicable record-keeping requirements under the FDR and the NHPR (e.g., record-keeping requirements for licensed establishments or sites).

For additional clarity, the regulatory pathways permitting the distribution of drugs as samples to the general public (i.e., a consumer) and permitting the distribution of drugs as samples to practitioners or pharmacists are distinct. Health Canada does not consider practitioners and pharmacists, in their capacity as healthcare professionals, to be consumers and they are not subject to the specific regulatory provisions permitting the distribution of drugs as samples to a consumer. In addition, Health Canada does not consider the further distribution of a drug as a sample from a practitioner or a pharmacist to their patient to be a distribution to a consumer. Practitioners and pharmacists engage in this type of distribution in accordance with their provincial or territorial scope of practice; therefore, the age restriction of 18 years or more does not apply in respect of their patients in a healthcare setting.

In addition, the regulations permitting a person to distribute a drug as a sample includes a person that may cause to be distributed a drug as a sample.

Replacing NAFTA references with CUSMA references

The Canada–United States–Mexico Agreement Implementation Act replaced references to the NAFTA with references to the CUSMA in the FDA. Corresponding regulatory amendments are made to the FDR to replace a reference to Article 1711 of NAFTA with a reference to Articles 20.48 and 20.49 of the CUSMA. Article 20.48 of the CUSMA obligates Canada to provide at least eight years of data protection for new pharmaceutical products (similar to Article 1711 of NAFTA), and Article 20.49 of CUSMA defines “new pharmaceutical product.”

Regulatory development

Consultation

In addition to consultations led by Global Affairs Canada throughout and after the CUSMA negotiations, Health Canada held targeted consultations during the regulatory development process between January and March 2019.

The Department consulted provincial and territorial government representatives, healthcare professional associations, consumer and patient groups and industry associations. During the consultations, all stakeholders were generally supportive of the proposed approach to permit the distribution of certain low risk NPDs and NHPs as samples under certain conditions, and of the proposed approach to align the specified practitioners in regulation (to whom samples of drugs may be distributed) with those able to prescribe drugs under provincial and territorial law. However, stakeholders did raise some concerns with, and provided feedback on, certain elements of the proposal.

Scope of products

Industry stakeholders requested that the Department expand the scope of products available for distribution as samples to the general public to include all NPDs and NHPs available for self-selection at retail. However, the primary objective of these amendments in the immediate term is to meet the CUSMA obligation to permit the distribution as samples, under certain conditions, of the low risk NPDs and NHPs that are specified in the Agreement. Additionally, based on the implementation timeline, the Department had insufficient time to conduct analysis and hold extended consultations on the inclusion of relatively higher-risk NPDs and NHPs — analysis and consultations which would be critical in ensuring adequate conditions are in place to mitigate health and safety risks associated with the distribution of these products as samples. Nonetheless, based on the risk profile associated with the products directly captured by the text of the CUSMA, the Department agreed with stakeholders on the inclusion of athlete’s foot treatments and throat lozenges. However, the use of an ambulatory incorporation by reference for NPDs will allow the Department to consider the potential inclusion or removal of, or addition of product/class-specific qualifiers for, other NPDs moving forward.

A leading industry association and principal voice of the cosmetics and personal care products industry in Canada as well as a patient safety organization expressed their support for an ambulatory incorporation by reference approach, as it is more responsive than a static incorporation by reference approach. The association also expressed support for the expansion of the list to include other NPDs moving forward in accordance with the intention of both the CUSMA and other risk-based oversight initiatives being undertaken by Health Canada.

Scope of drugs available for distribution as samples to practitioners and pharmacists

With respect to the expanded types of practitioners to whom samples of drugs may be distributed, concerns were raised related to the types of products that may be distributed to these practitioners. The Department confirmed that prescription drugs, NPDs and NHPs not captured by the amendments related to the general public, will only be able to be distributed to practitioners or pharmacists authorized by a province or territory (or a college oversight body) to prescribe or dispense drugs. For clarity, this means that a practitioner will only be able to sign an order for samples of a prescription drug when they are entitled to prescribe that specific prescription drug within the scope of their practice in a province or territory.

Age restriction

Some industry stakeholders expressed hesitation with establishing a specific age restriction for the distribution of certain low risk NPDs and NHPs as samples. It was proposed that an alternative approach could be to align distribution activities with product-specific terms of use. Such an approach would mean, for example, that if a product is indicated for use within a child sub-population, that a sample of the product could be distributed directly to a child, even though such products are typically intended to be used under adult supervision. The Department is of the view that an age restriction of 18 years is more appropriate to mitigate risks of misuse and to prevent the unsolicited distribution and direct targeting of NPDs and NHPs as samples to children and youth in the absence of adult supervision.

Cost-benefit consultations

Between January and March 2019, the Department held consultations with provincial and territorial government representatives, healthcare professional associations, consumer and patient groups and industry associations in relation to the costs and benefits of these amendments. Due to the anticipated low-impact nature of the proposal and time constraints for development, the Department presented a number of cost- and benefit-related questions to stakeholders via teleconference. A number of responses were received throughout the discussion and four formal submissions were received from industry associations. Based on stakeholder feedback and further analysis by the Department, a qualitative analysis was undertaken as these amendments were expected to be low impact in nature.

Prepublication

In order for Canada to fully meet its CUSMA obligation to permit the distribution of certain NPDs and NHPs as samples, there was insufficient time to prepublish these amendments in the Canada Gazette, Part I, prior to ratification of the Agreement. During regulatory development, the Department held consultations with impacted or potentially impacted stakeholders in accordance with the Government of Canada’s policies and guidance for consultation and engagement. In order to move forward with an ambulatory incorporation by reference approach for NPDs under the FDR, where Health Canada could add or remove products, or introduce product/class-specific qualifiers for drugs as samples, the Department received support from the principal stakeholder association representing low risk cosmetic-like drug stakeholders (e.g., brand owners, manufacturers, importers, distributors, and retailers). Health Canada also received support from a prominent Canadian patient safety organization on the use of a transparent and consultative ambulatory incorporation by reference approach for NPDs.

Modern treaty obligations and Indigenous engagement and consultation

While these amendments are expected to have a positive impact on the accessibility of drugs distributed as samples in rural, northern and remote communities, where more than 50% of Indigenous peoples reside, they do not impact Government obligations in relation to rights protected by section 35 of the Constitution Act, 1982, modern treaties, or international human rights obligations.

Instrument choice

These regulatory amendments are necessary for Canada to meet its CUSMA obligations; therefore, the status quo (i.e., taking no action) was not a viable option and would not enable Canada to implement the CUSMA. In addition, non-regulatory approaches were not viable options as the FDA enables exceptions to the prohibition on the distribution of drugs as samples only in accordance with the regulations. In the absence of regulatory amendments to permit the distribution of certain NPDs and NHPs as samples to the general public and an updated scope of practitioners to whom drugs as samples may be distributed, these activities would remain prohibited.

Regulatory analysis

Benefits and costs

This cost-benefit analysis examines the qualitative incremental impacts of these amendments from a societal perspective by comparing the policy scenario to the baseline scenario (i.e. current activities ongoing, as well as any changes that would occur without the amendments in place). These amendments are expected to benefit Canadians through incremental improvements to individual health and welfare, as well as businesses through positive economic impacts to industry.

1. Benefits

1.1 Benefits to Canadians
Distribution of NPDs and NHPs as samples to the general public

NPDs and NHPs are widely used by Canadians to maintain health and manage minor ailments. A survey footnote 2 conducted by Consumer Health Products Canada revealed that 42% of Canadians take consumer health products every day and 31% of Canadians use consumer health products a few times each week, or every few weeks. The distribution of certain NPDs and NHPs as samples may further help to address certain public health issues. For example, the distribution of sunscreens by manufacturers, municipalities or public health agencies could provide direct benefits for consumers. A recent study in the United States demonstrated that the distribution of sunscreens in public and recreational areas in Boston and throughout other cities in New England reduced mortality and incidence rates of melanoma (a type of cancer). footnote 3 The distribution of sunscreens, as well as other NPDs and NHPs such as toothpastes and mouthwashes as samples could also lead to public health benefits. Their distribution as samples by various organizations could also reduce cost-related accessibility issues in lower-income communities.

Increased access of certain NPDs and NHPs as samples could also facilitate more informed choices for future purchases, which could translate into wider relief of minor ailments and translate to health benefits/increases in individual welfare. For products with significant public health benefits, it is also possible that an increase in their use could reduce consumers’ visits to primary care providers, freeing up valuable healthcare resources.

Distribution of drugs as samples to the expanded scope of practitioners

These amendments are expected to benefit patients through the newly captured practitioners to whom samples of drugs may be distributed. As the previous list of practitioners (physicians, veterinary surgeons and dentists) to whom samples of drugs may be distributed did not align with the various practitioners’ scope of practice under provincial and territorial law, drugs could not be distributed as samples to certain practitioners able to prescribe them (e.g., nurse practitioners). A survey of nurse practitioners across Canada indicated that 51% of the respondents reported facing barriers to effective practice due to their inability to dispense pharmaceutical samples footnote 4 as a result of an outdated federal prohibition. Other practitioners to whom it will now be possible to distribute specific drugs as samples (directly linked to their scope of practice) include nurses, chiropodists (podiatrists), midwives, optometrists and naturopaths who are registered or otherwise entitled to practise their profession under provincial or territorial law. Access to drugs as samples by a broader range of healthcare practitioners is anticipated to enable greater access to such drugs as samples by their patients. For example, samples of drugs will now be available for distribution to nurse practitioners, including those practising in remote, northern and rural communities who are heavily relied upon for primary care. This will benefit patients within these communities as they may now be expected to have greater access to drugs as samples, especially in instances where a patient has limited means for payment.

The use of drugs as samples in the clinical setting can also provide benefits by facilitating practitioner learning and practitioners’ observations of products on a trial basis in individuals. Through the use of drugs as samples, practitioners can potentially improve individualized treatment effectiveness, avoid side effects footnote 5 and reduce wasteful spending associated with the improper use of certain drugs. In a United States study footnote 6 of randomly sampled nurse practitioners, 73% claimed that medication samples were somewhat or very helpful in learning about new drugs. The greater availability of drugs as samples through the expanded scope of practitioners may, in some cases, facilitate more timely access, provide more prompt relief for patients and potentially prevent complications due to untimely treatment; footnote 7 there is also evidence to show that starting therapy early can also help facilitate patients’ adherence to prescribed treatments. footnote 8 The potential for these benefits increases when a patient has limited access to such drugs either because of limited access to a physician or a pharmacist, or limited financial means to pay for a drug. The greater availability of drugs distributed as samples through the broader scope of practitioners (e.g., nurse practitioners) can also increase the benefits of using these products as samples in the clinical setting as bridging mechanisms, or to address an acute issue in underinsured or uninsured patients.

Distribution of NHPs as samples to practitioners and pharmacists

Greater access to NHPs as samples (beyond those available for distribution to the general public) through practitioners and pharmacists could facilitate more informed consumer choices for future purchases.

1.2 Benefits to businesses

It is anticipated that manufacturers, importers, labellers, packagers and marketers in the prescription drug, NPD and NHP sectors will benefit from these amendments. With the regulatory barriers to the distribution of drug samples reduced, businesses will face fewer constraints and have more options available in their marketing activities. For some, this opportunity could lead to more efficient allocation of their resources, helping them to achieve greater growth potential. However, as these amendments will permit new activities, there is some uncertainty with respect to how many businesses will engage in such activities. Therefore, Health Canada was unable to adequately quantify benefits to businesses in terms of increases in economic activity.

2. Costs

2.1 Costs to businesses

There are no additional incremental costs associated with the distribution of NPDs and NHPs as samples to the general public. Specific record-keeping requirements, i.e., the specific two-year record keeping requirement related to the distribution of prescription and higher-risk NPDs as samples under the FDR (that will also apply to the distribution of higher risk NHPs to practitioners and pharmacists), will not apply in respect of the distribution of a sample of an NPD or NHP to the general public. However, it should be noted that any record-keeping requirements for a drug establishment licence holder or natural health product site licence holder will continue to apply.

Under the policy scenario, companies who choose to distribute drugs as samples could incur relatively minor incremental costs associated with the manufacture and distribution of drugs as samples. However, given that these activities are not required for compliance purposes, these costs are not attributable to these amendments.

Similarly, no additional record keeping cost will be directly attributable to these amendments as businesses would still need to maintain records of drugs distributed (whether or not they are intended to be distributed as samples) as part of their standard supply chain management practices, as well as for accounting/tax purposes, in the absence of these amendments. It is worth noting that the maintenance of records also serves as a supply chain management procedure in the event of a recall or advisory.

2.2 Costs to practitioners

With respect to the expanded scope of practitioners to whom samples of drugs may be distributed, incremental costs include the time required for a practitioner to sign an order for samples of drugs. This cost is expected to be minimal as the requirement involves relatively simple and readily available information and does not entail any complex or time-consuming tasks. Overall, the amendments are expected to lead to minimal costs to practitioners compared to the baseline scenario. Of the newly captured practitioners to whom samples of drugs may be distributed, nurse practitioners have the broadest prescribing authority. To put the potential cumulative costs in perspective, in 2016 there were nearly 5,000 nurse practitioners in Canada compared to more than 84,000 physicians (to whom samples of drugs could previously be distributed). footnote 9 Given that the intent of the requirement for practitioners to sign an order for samples of a drug (intended for further distribution to their patients) is related to the mitigation of potential health and safety risks, the associated cost is considered compliance burden.

2.3 Costs to the Government

Prior to these amendments, Health Canada’s Regional Operations and Enforcement Branch (ROEB) relied on the level of risk identified with the activity of the distribution of drugs as samples in exercising compliance oversight. Since 2014, ROEB has received 12 complaints concerning the prohibition on the distribution of drugs as samples to the general public. This represents only 0.5% of the total incidents of non-compliance with the Food and Drugs Act. This required minimal resources to assess the complaints and take compliance and enforcement action as appropriate. Not all of the complaints received were well-founded or required compliance and enforcement actions. At times, compliance promotion was conducted as part of the responses provided to those complaints.

As these amendments will permit the distribution of drugs as samples to the general public under certain conditions, there is an expectation that the number of complaints will be reduced further. No additional resources are required to oversee compliance as a result of these amendments. ROEB will continue to conduct compliance monitoring as part of the complaints process. Should a targeted compliance monitoring project be required to gain more insight into the compliance of regulated parties with respect to the new requirements, it would be conducted within existing departmental resources.

2.4 Other considerations

Overall, literature suggests that the distribution of drugs as samples to physicians is correlated with an increase in sales of such drugs. footnote 10, footnote 11, footnote 12, footnote 13 In combination with literature that suggests nurse practitioners and physicians have a comparable scope of prescribing practices, it is expected that drugs distributed as samples to the expanded scope of practitioners may result in an increase in sales for these products. Given that brand-name drugs are more likely to be distributed as samples, and that they are generally more expensive compared to their generic alternatives, this may tend to increase costs to public, private and individual payers. However, an overall increase in healthcare costs is unlikely to be significant because: (i) the additional categories of practitioners to whom drugs may be distributed to as samples are relatively small compared to the number of physicians and pharmacists to whom samples of drugs may already be distributed under the baseline scenario; (ii) compared to physicians, the newly captured practitioners authorized to prescribe under provincial and territorial law are able to prescribe a more limited scope of drugs with the exception of nurse practitioners; footnote 14 (iii) in Canada’s publicly funded system, practitioners and patients may be limited by public and private drug plan formularies as to what will be reimbursed; and (iv) the distribution of drugs as samples to patients for free may offset any increase in costs resulting from potential changes in practitioners’ prescribing behaviours.

Regarding the distribution of certain low risk NHPs and NPDs as samples to the general public under certain conditions, no incremental cost to Canadians is expected. Since the original enactment of section 14 of the FDA, the pre- and post-market oversight schemes for drugs have evolved considerably. Not only are these products considered low risk NHPs and NPDs, the associated pre-market and post-market requirements (including labelling, product licensing, adverse reaction reporting, quality requirements, etc.) are expected to protect against health and safety risks when they are distributed as samples. Additional risks specifically related to the distribution of these products as samples will be mitigated by permitting their distribution as samples only to individuals 18 years of age or older and not within the 30 days prior to or during the month of its expiry date, as the case may be, or any time after its expiry date.

3. Conclusion

The distribution of certain NPDs and NHPs to the general public may lead to incremental health benefits, financial benefits and welfare improvements to Canadians through multiple mechanisms. Moreover, these amendments are expected to generate potential health benefits by enabling a broader range of practitioners to receive drugs as samples in accordance with their scope of practice under provincial and territorial law. They may also contribute to lower medication costs for certain patients and the healthcare system as a whole, timelier treatment options for patients with financial challenges and/or urgent primary-care treatment needs, as well as more informed consumer choices. In addition, the reduction in regulatory barriers for industry is expected to benefit businesses that engage in the manufacture, import, labelling, packaging, distribution and sale of prescription drugs, NPDs and NHPs. Overall, the potential benefits of the amendments outweigh the associated incremental costs.

Small business lens

The Treasury Board Secretariat defines a small business as any business, including its affiliates, that has fewer than 100 employees or less than $5 million in annual gross revenues.

Healthcare sector

Some practitioners’ practices are considered small businesses, which they may own and through which they may employ other professionals. These small businesses could indirectly benefit from the broader range of healthcare professionals to whom samples of drugs may be distributed. For example, they may benefit from time saved by way of improved patient access to certain drugs and better health outcomes.

Manufacturers, distributors, packagers and labellers

Businesses in the pharmaceutical sector typically have gross revenues that exceed the $5 million threshold of the small business lens, footnote 15 but approximately two thirds of the NHP sector is composed of small businesses. It is anticipated that larger companies with higher marketing budgets will engage more frequently in the distribution of samples of their products; however, these larger companies generally work with a number of smaller companies within their supply chain, including third-party organizations that distribute drugs as samples and maintain records (e.g., contract sales organizations and contract marketing organizations). In addition, many businesses involved in the manufacture, labelling, packaging, distribution and sale of drugs (i.e., prescriptions, NPDs and NHPs) are small businesses. For example, the packaging and labelling services industry in Canada is dominated by small-scale, regional operators. footnote 16 It is anticipated that small businesses will benefit in a similar manner as the rest of their respective sectors.

One-for-one rule

The one-for-one rule does not apply to these amendments, as there is no incremental change in administrative burden on business.

Regulatory cooperation and alignment

These amendments enable Canada to meet its CUSMA obligation to permit the distribution of certain low-risk NPDs and NHPs, recognized as being at the interface of drugs and cosmetics, as samples under certain conditions. By permitting this practice through regulation, Canada’s policies better align with those of the United States where there is no federal prohibition on the distribution of NPDs or dietary supplements (similar to NHPs) as samples.

These amendments do not completely align practices between Canada and the United States. Canada maintains the prohibition on the distribution of relatively higher risk NPDs and NHPs to the general public and places conditions on distribution that do not exist in the United States (i.e., distribution only to individuals 18 years of age or older, and not within 30 days prior to or during the month of its expiry date, as the case may be, or any time after its expiry date). These conditions on the distribution of samples are risk-based and serve to protect the health and safety of Canadians. The use of an ambulatory incorporation by reference approach under the FDR will allow Health Canada to make changes to List D in the future, which could minimize regulatory differences with the United States with respect to the scope of products that can be sampled.

The distribution of NPDs as samples directly to the general public is not permitted in most parts of Europe or Australia; however, many lower-risk cosmetic-like products regulated as drugs in Canada are regulated as cosmetics in most parts of Europe and Australia, which are permitted to be distributed as samples. Canada’s regulatory oversight generally falls somewhere between the oversight of the United States and that of Europe and Australia. The use of an ambulatory incorporation by reference approach under the FDR will also allow Health Canada to adjust the list of NPDs available for distribution as samples to the general public as new health and safety information arises from any of these jurisdictions.

Regarding regional cooperation across Canada, the amendment to expand the scope of practitioners to whom samples of prescription drugs and NPDs may be distributed, and to permit the distribution of NHPs as samples to practitioners and pharmacists, aligns federal law with practitioners’ scope of practice under provincial and territorial law. The Department has engaged intergovernmental affairs partners to seek support and feedback in order to minimize the impact or unanticipated consequences of these regulations.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a Strategic Environmental Assessment (SEA) preliminary scan was conducted, and it concluded that a detailed analysis was not required.

Gender-based analysis plus (GBA+)
Distribution of drugs as samples to the general public

These amendments will, in general, provide proportionate benefits to Canadians. For example, the distribution of certain drugs as samples to the general public (e.g., sunscreens at outdoor events) by public health agencies, municipalities or manufacturers could provide greater benefits to some individuals through the mitigation of income-based inaccessibility. With respect to differential outcomes for children and youth (e.g., misuse and the unsolicited distribution to and direct targeting of children and youth), the restriction on the distribution of drugs as samples to individuals less than 18 years of age will mitigate these safety-based concerns.

Distribution of drugs as samples to practitioners and pharmacists

These amendments are anticipated to have positive impacts on individuals seeking care from the expanded scope of practitioners to whom samples of drugs may now be distributed. In general, practitioners more frequently pass on drug samples to those with lower incomes and higher overall pharmaceutical expenditures, providing short-term economic relief. footnote 17 In the Canadian context, a survey of healthcare professionals who provided drugs as samples to their patients cited financial help (62.6%) and pharmacy inaccessibility (29.9%), among other healthcare related responses, as primary reasons for their distribution. footnote 18

In addition, the expansion of practitioners to include professions such as nurse practitioners is anticipated to facilitate greater access to samples of certain medicines such as family planning drugs in rural, northern and remote communities. In this respect, studies have indicated that new immigrants, youth, young adults and women in small rural, northern and indigenous communities are particularly vulnerable to barriers related to pharmaceutical cost and physician inaccessibility. footnote 19 Nurse practitioners play an important role in the delivery of care in these communities, which are also home to more than half of Canada’s indigenous peoples. footnote 20

Implementation, compliance and enforcement, and service standards

Implementation

Implementation activities, such as staff training, to support these regulations will be minimal. Departmental guidance to further clarify these amendments for stakeholders will be made available upon the date they come into force.

Ambulatory incorporation by reference under the FDR

Prior to implementing changes to the List of Certain Non-prescription Drugs for Distribution as Samples, Health Canada will consult Canadians through a Notice of Proposal on the Department’s website and will consider all feedback provided in the following 60-day consultation period before making a decision.

Coming into force

In order to meet Canada’s CUSMA commitments, these amendments come into force on the day that section 57 of the Canada–United States–Mexico Agreement Implementation Act comes into force.

Compliance and enforcement

Health Canada’s Regulatory Operations and Enforcement Branch (ROEB) will continue to enforce the prohibition on the distribution of drugs as samples and the conditions related to the exceptions to the prohibition through a risk-based approach.

Contact

Bruno Rodrigue
Policy, Planning and International Affairs Directorate
Health Products and Food Branch
Health Canada
Holland Cross, Suite 14
11 Holland Avenue
Ottawa, Ontario
K1A 0K9
Address Locator: 3000A
Email: hc.lrm.consultations-mlr.sc@canada.ca