Regulations Amending the Natural Health Products Regulations: SOR/2022-146

Canada Gazette, Part II, Volume 156, Number 14

Registration
SOR/2022-146 June 21, 2022

FOOD AND DRUGS ACT

P.C. 2022-710 June 20, 2022

Her Excellency the Governor General in Council, on the recommendation of the Minister of Health, makes the annexed Regulations Amending the Natural Health Products Regulations under subsection 30(1)footnote a of the Food and Drugs Actfootnote b.

Regulations Amending the Natural Health Products Regulations

Amendments

1 (1) The definition outer label in subsection 1(1) of the Natural Health Products Regulations footnote 1 is replaced by the following:

outer label
means the label on or affixed to the outside of a package, other than the immediate container, of a natural health product. (étiquette extérieure)

(2) Paragraph (c) of the definition natural health product in subsection 1(1) of the Regulations is replaced by the following:

(3) Subsection 1(1) of the Regulations is amended by adding the following in alphabetical order:

added sulphites
means one or more of the food additives that are set out item 21, column 1, of table 2 of the Common Names for Ingredients and Components Document and are present in a natural health product as a result of being added to the product. (sulfites ajoutés)
Common Names for Ingredients and Components Document
means the document entitled Common Names for Ingredients and Components, prepared by the Canadian Food Inspection Agency and published on its website, as amended from time to time. (document sur les noms usuels d’ingrédients et de constituants)
food allergen
means any protein from any of the following foods, or any modified protein, including any protein fraction, that is derived from any of the following foods:
  • (a) almonds, Brazil nuts, cashews, hazelnuts, macadamia nuts, pecans, pine nuts, pistachios or walnuts;
  • (b) peanuts;
  • (c) sesame seeds;
  • (d) wheat or triticale;
  • (e) eggs;
  • (f) milk;
  • (g) soybeans;
  • (h) crustaceans;
  • (i) molluscs;
  • (j) fish; or
  • (k) mustard seeds. (allergène alimentaire)
food allergen source, gluten source and added sulphites statement
means a statement appearing on the label of a natural health product that indicates the source of a food allergen or gluten that is present in the product or the presence in the product of added sulphites in a total amount of 10 p.p.m. or more. (mention des sources d’allergènes alimentaires ou de gluten et des sulfites ajoutés)
gluten
means
  • (a) any gluten protein from the grain of any of the following cereals or from the grain of a hybridized strain that is created from at least one of the following cereals:
    • (i) barley,
    • (ii) oats,
    • (iii) rye,
    • (iv) triticale,
    • (v) wheat; or
  • (b) any modified gluten protein, including any gluten protein fraction, that is derived from the grain of any of the cereals referred to in paragraph (a) or from the grain of a hybridized strain referred to in that paragraph. (gluten)
point
means the unit of measurement for type size that is known as a PostScript point and is equal to 0.3527777778 mm. (point)

2 Subsection 9(2) of the Regulations is replaced by the following:

(2) The notice shall indicate that the applicant may, within 30 days after the date of the notice, request that the Minister reconsider the application.

3 The portion of section 13 of the English version of the Regulations before paragraph (a) is replaced by the following:

13 For greater certainty, if the licensee makes any of the following fundamental changes in respect of the natural health product, the licensee shall not sell the natural health product affected by the change unless a product licence is issued in accordance with section 7 for the natural health product as changed:

4 The portion of paragraph 18(2)(b) of the Regulations before subparagraph (i) is replaced by the following:

5 Subsection 27(2) of the Regulations is replaced by the following:

(2) No person who holds a site licence shall manufacture, package, label or import a natural health product for sale during the period of any suspension of the licence under section 39 or 40.

6 Subsection 30(2) of the Regulations is replaced by the following:

(2) The notice shall indicate that the applicant may, within 30 days after the date of the notice, request that the Minister reconsider the application.

7 The portion of paragraph 39(2)(b) of the Regulations before subparagraph (i) is replaced by the following:

8 Subsection 51(5) of the English version of the Regulations is replaced by the following:

(5) Every natural health product that is sold and subsequently returned to its manufacturer, packager, labeller, importer or distributor shall be approved by a quality assurance person before that natural health product is made available for further sale.

9 Paragraph 53(d) of the Regulations is replaced by the following:

10 Paragraph 54(a) of the Regulations is replaced by the following:

11 Paragraph 56(c) of the Regulations is replaced by the following:

12 (1) The portion of section 62 of the Regulations before paragraph (a) is replaced by the following:

62 Every manufacturer, importer or distributor who commences a recall of a natural health product shall, within three days after the day on which the recall is commenced, provide the Minister with the following information in respect of the natural health product:

(2) Paragraph 62(e) of the Regulations is replaced by the following:

(3) Paragraphs 62(g) to (j) of the Regulations are replaced by the following:

13 The portion of subsection 71(1) of the English version of the Regulations before paragraph (a) is replaced by the following:

71 (1) Subject to subsection (2), if the sale or importation of a natural health product for the purposes of a clinical trial is authorized under this Part, the sponsor shall not make any of the following amendments unless the authorization is amended accordingly:

14 Section 72 of the Regulations is replaced by the following:

72 If an authorization to sell or import a natural health product for the purposes of a clinical trial is amended in accordance with subsection 71(5), the sponsor shall sell or import the natural health product and conduct the clinical trial in accordance with the amended authorization.

15 Subsection 76(3) of the Regulations is amended by striking out “and” at the end of paragraph (g), by adding “and” at the end of paragraph (h) and by adding the following after paragraph (h):

16 The portion of paragraph 80(2)(b) of the Regulations before subparagraph (i) is replaced by the following:

17 (1) The portion of subsection 87(1) of the Regulations before paragraph (a) is replaced by the following:

87 (1) If any of the following information is required by these Regulations to be shown on the label of a natural health product, it shall be shown in both English and French:

(2) Subsection 87(2) of the Regulations is replaced by the following:

(2) Despite subsection (1), if the common name or proper name of a medicinal ingredient or the common name of a non-medicinal ingredient does not have an English or French equivalent and there is an equivalent name in another language, that equivalent name shall be shown.

(3) Despite subsections (1) and (2), the common name of a non-medicinal ingredient may be replaced by the International Nomenclature Cosmetic Ingredient name assigned to it in the International Cosmetic Ingredient Dictionary and Handbook, published in Washington, D.C., United States, by the Personal Care Products Council, as amended from time to time.

18 (1) Section 88 of the Regulations is amended by striking out “and” at the end of paragraph (a) and by adding the following after paragraph (b):

(2) Section 88 of the Regulations is renumbered as subsection 88(1) and is amended by adding the following:

(2) Paragraphs (1)(c) to (g) do not apply to

(3) Paragraphs (1)(c) to (g) do not apply if

19 Section 89 of the Regulations is repealed.

20 The Regulations are amended by adding the following after section 91:

91.1 The requirement in subsection 93.1(11) and paragraphs 93.4(h) and 93.6(1)(h) to show the food allergen source, gluten source and added sulphites statement on a label of a natural health product does not apply if the food allergen, gluten or added sulphites are present in a natural health product as a result of cross-contamination.

91.2 The source of a food allergen that is required to be shown on a label of a natural health product shall be shown as follows:

91.3 The source of gluten that is required to be shown on a label of a natural health product shall be shown as follows:

91.4 The added sulphites that are required to be shown on a label of a natural health product shall be shown as follows:

21 Section 93 of the Regulations is replaced by the following:

93 The following information in respect of a natural health product shall be shown on the principal display panel of the inner label and, if there is an outer label, on the principal display panel of the outer label:

93.1 (1) The following information in respect of a natural health product shall be shown on the outer label or, if there is no outer label, on the inner label:

(2) Any table that is referred to in paragraph (1)(f) shall be shown on the label vertically or horizontally.

(3) Despite paragraph (1)(f) and subsection (4), the order of the languages in a bilingual table may be reversed.

(4) A bilingual table shall contain only the following headings in the following order:

(5) A table in English shall contain only the following headings in the following order:

(6) A table in French shall contain only the following headings in the following order:

(7) The following information shall be shown under the heading “Medicinal ingredients / Ingrédients médicinaux” or under the headings “Medicinal ingredients” and “Ingrédients médicinaux”:

(8) At least one recommended use or purpose of the natural health product shall be shown under the heading “Uses / Usages” or under the headings “Uses” and “Usages”.

(9) Despite subsections (4), (5), (6) and (8), the recommended use or purpose may be omitted from the table if that information is shown elsewhere on the same label, and, if it is omitted, the heading “Uses / Usages” or the headings “Uses” and “Usages” shall also be omitted.

(10) The risk information, including any cautions, warnings, contra-indications or known adverse reactions associated with the use of the natural health product, shall be shown under the heading “Warnings / Mises en garde” or under the headings “Warnings” and “Mises en garde” and, subject to subsections (11) and (12), may be shown in bold type.

(11) If the natural health product contains a food allergen, gluten or added sulphites, the statement “Allergens / Allergènes” or the statements “Allergens” and “Allergènes” shall be shown in bold type under the heading “Warnings / Mises en garde” or under the headings “Warnings” and “Mises en garde”, followed by the food allergen source, gluten source and added sulphites statement, also in bold type.

(12) If the natural health product contains aspartame, the statement “Contains aspartame / Contient de l’aspartame” or the statements “Contains aspartame” and “Contient de l’aspartame” shall be shown in bold type under the heading “Warnings / Mises en garde” or under the headings “Warnings” and “Mises en garde”.

(13) Despite subsections (4), (5) and (6), if there is no risk information, including any cautions, warnings, contra-indications or known adverse reactions associated with the use of the natural health product, the heading “Warnings / Mises en garde” or the headings “Warnings” and “Mises en garde” shall be omitted from the table.

(14) The following information in respect of the natural health product shall be shown under the headings “Directions / Mode d’emploi” or under the headings “Directions” and “Mode d’emploi”:

(15) The recommended storage conditions of the natural health product shall be shown under the heading “Other information / Autres renseignements” or under the headings “Other information” and “Autres renseignements”.

(16) Despite subsections (4), (5), (6) and (15), the recommended storage conditions may be omitted from the table if they are shown elsewhere on the same label, and, if they are omitted and no information is to be included under the heading “Other information / Autres renseignements” or the headings “Other information” and “Autres renseignements”, the heading or headings shall also be omitted.

(17) The following information shall be shown under the heading “Non-medicinal ingredients / Ingrédients non médicinaux” or under the headings “Non-medicinal ingredients” and “Ingrédients non médicinaux”:

(18) The telephone number, email address or website address of a contact person who represents the product licence holder of the natural health product shall be shown under the heading “Questions?”.

93.2 The following requirements apply in respect of a table referred to in paragraph 93.1(1)(f):

93.3 (1) If, despite the following measures, the available surface area for a label is insufficient to accommodate all of the information that is required to be shown in a table under section 93.1, the information required to be shown under subsection 93.1(17) shall be shown elsewhere on the same label:

(2) If, despite the application of subsection (1), the available surface area for the label is insufficient to accommodate all of the remaining information that is required to be shown in the table, the information required to be shown under subsection 93.1(17) shall be shown

(3) If, despite the application of subsection (2), the available surface area for the label is insufficient to accommodate all of the remaining information that is required to be shown in the table, the information required to be shown under paragraph 93.1(7)(b) shall be shown in the leaflet or package insert, or on the website, that contains the information required to be shown under subsection 93.1(17).

(4) For the purposes of subsections (1), (2) and (3), the table shall include a statement under the title “Product Facts / Info-produit” or “Product Facts” and “Info-produit” that indicates where the information required to be shown under subsection 93.1(17), and, if applicable, paragraph 93.1(7)(b), can be found.

(5) The information that is required to be shown in a package insert or on a website shall appear in a table that complies with the requirements of sections 93.1 and 93.2.

93.4 If a natural health product has both an inner and outer label, the following information in respect of the product shall be shown on the inner label:

93.5 Sections 93.1 to 93.4 do not apply in respect of a natural health product if

93.6 (1) If any of the conditions set out in section 93.5 is met, the following information in respect of the natural health product shall be shown on the inner label and, if there is an outer label, on the outer label:

(2) Subject to subsections (3) and (4), if any of the conditions set out in section 93.5 is met, the following information in respect of the natural health product shall be shown on the outer label or, if there is no outer label, on the inner label:

(3) The information referred to in paragraphs (2)(a) and (b) shall be shown in a leaflet that is affixed or attached to the outermost container of the natural health product, in a package insert or on a website if

(4) If, despite the application of subsection (3), the available surface area for the label is insufficient to accommodate all of the remaining information that is required to be shown under subsections (1) and (2), the information referred to in paragraph (2)(c) shall be shown in the leaflet or package insert, or on the website, that contains the information referred to in paragraphs (2)(a) and (b).

(5) For the purposes of subsections (3) and (4), the label shall include a statement that indicates where the information referred to in paragraphs (2)(a) and (b), and, if applicable, paragraph (2)(c), can be found.

22 (1) The portion of subsection 94(1) of the Regulations before paragraph (a) is replaced by the following:

94 (1) If the immediate container of a natural health product is not large enough to accommodate an inner label that complies with the relevant requirements of sections 93 to 93.6, the product shall be labelled as follows:

(2) Subparagraph 94(1)(a)(ii) of the Regulations is replaced by the following:

(3) Paragraph 94(1)(b) of the Regulations is replaced by the following:

(4) Subsection 94(2) of the Regulations is replaced by the following:

(2) If the natural health product does not have an outer label,

23 Subsection 95(1) of the Regulations is replaced by the following:

95 (1) Subject to subsection (2), no person shall sell or import one or more of the following natural health products that is packaged unless it is contained in a security package:

Transitional Provisions

24 (1) The following definitions apply in this section.

former Regulations
means the Natural Health Products Regulations as they read immediately before the day on which sections 17 to 22 of these Regulations come into force. (ancien règlement)
natural health product
has the same meaning as in subsection 1(1) of the Natural Health Products Regulations. (produit de santé naturel)
new Regulations
means the Natural Health Products Regulations as they read on the day on which sections 17 to 22 of these Regulations come into force. (nouveau règlement)

(2) A natural health product for which a product licence has been issued under section 7 of the former Regulations is not required, within three years after the day on which sections 17 to 22 of these Regulations come into force, to be labelled in accordance with the new Regulations, if the product is labelled in accordance with the former Regulations.

(3) If, during the three-year period referred to in subsection (2), a person that holds a product licence under the former Regulations in respect of a natural health product referred to in that subsection makes any modification of risk information referred to in paragraph 11(1)(c) of the former Regulations in respect of the product for the purpose of complying with the new Regulations,

Coming into Force

25 (1) These Regulations, except sections 17 to 22, come into force on the day on which these Regulations are registered.

(2) Sections 17 to 22 come into force on the third anniversary of the day on which these Regulations are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: Natural health product (NHP) use among Canadians has been increasing and is expected to increase further due to a number of factors such as Canada’s aging population, the COVID-19 pandemic, greater access to the Internet and other sources of information, and an increase in consumers’ role in their own self-care. When key information on NHP labels is not presented in a clear, consistent, and legible format, it makes it difficult for consumers and health professionals to locate, read, and compare important safety information. Poor communication of key information on health product labels can lead to incorrect purchases and preventable harms. These preventable harms and delays in effective treatments due to incorrect purchases or use, negatively impact the health and safety of Canadians, add burden to the health care system, and impact the Canadian economy through lost productivity.

Description: Health Canada is amending the Natural Health Products Regulations (NHPR) to introduce the following requirements to improve the labelling of NHPs so that information is clear, consistent, and legible for consumers and is in alignment with rules that have already been established for comparable non-prescription drugs:

  • 1) A Product Facts table: Important product information is required in the format of a standardized facts table. Certain exemptions are provided to accommodate products in very small packages, products that are relatively low-risk, products that are to be used within one day or less (as per the directions on the label), and products with package(s) that contain, at most, three dosage units.
  • 2) Labelling of food allergens, gluten, added sulphites and aspartame: If a product contains a priority food allergen (i.e. one that is likely to lead to anaphylaxis in affected communities), gluten or added sulphites, a food allergen source, gluten source and added sulphites statement is required on the label.footnote 2 If a product contains aspartame, a statement to this effect is required on the product’s label.
  • 3) Clearly and prominently displayed label text: Regulatory text on the label, including within the Product Facts table, is subject to improved legibility requirements, including a minimum type size, font types, and contrast. Utilizing a risk-based approach, exemptions from these requirements are provided for certain label information (e.g. the product number and marketing information), as well as for products with very small packages, products that are to be used within one day or less (as per the directions on the label), and products with package(s) that contain, at most, three dosage units.
  • 4) Modernized contact information: A manufacturer or importer is required to display an e-mail address, telephone number, or website address within an NHP’s Product Facts table (or elsewhere on the label if the NHP is exempt from the facts table requirement), instead of a postal address of the manufacturer and the importer (if there is one), as is currently required.

These amendments will also remove security packaging requirements for certain NHPs, such as sunscreens and other topical products in order to align with requirements for similar products in the United States (U.S.) and non-prescription drugs in Canada.

Finally, Health Canada is taking this opportunity to bring forward certain amendments to the NHPR to clarify existing rules. These amendments do not introduce any regulatory burden as they do not set out new requirements, nor remove existing requirements and will be cost neutral to both the government and regulated parties.

Rationale: These amendments are necessary to make NHP labels more legible and easier to understand for consumers in order to reduce the risk of harm associated with ineffective and inadequate communication of important safety information. More clearly and prominently displayed text, a standardized facts table, and the inclusion of new, bolded warning statements (e.g. for allergens) will facilitate appropriate product selection and prevent avoidable harms, leading to safer consumer use. These amendments may also increase the rate of reporting of adverse reactions to manufacturers and, in turn, to Health Canada. Additional adverse reaction information will expand Health Canada’s ability to use real-world evidence to monitor the safety and effectiveness of NHPs and to mitigate any identified risks.

These amendments will also enhance Health Canada’s regulatory alignment with the U.S., the European Union, and Australia. In these jurisdictions, facts tables containing important information are already required for similar products that make health claims. For example, in the U.S., a product regulated as a food requires a Nutrition Facts table, a dietary supplement requires a Supplement Facts table, and a drug requires a Drug Facts table. What we consider an NHP in Canada could fall into any of these three categories, but in each case would have a facts table and common labelling requirements (e.g., type size and contrast).

There were 139 stakeholder submissions received during the Canada Gazette, Part I consultation period, the majority of which were supportive of the overall objectives of the proposal. Health stakeholders, patient safety groups and consumers were supportive of a Product Facts table; labelling of food allergens, gluten, added sulphites and aspartame; clear and prominently displayed label text; and requiring modernized contact information on the label. Industry stakeholders expressed concerns related to increased regulatory burden, the length of the transition period, the cost estimates included in the CBA, and the environmental impacts perceived to be associated with these changes. Over a 15-year period (2022 to 2036 inclusive), these amendments will result in a total monetized benefit of $292 million present value (PV) and a total incremental cost of $159 million PV. This provides a total net benefit of $134 million PV or $15 million in net annualized benefits.

Issues

Labelling to improve self-selection and safe use of natural health products

In 2010-11, more than 70% of Canadians used natural health products (NHPs).footnote 3 Since then, use among Canadians has been increasing and this trend is expected to continue due to a number of factors such as Canada’s aging population, greater access to the Internet and other sources of information, and an increase in consumers’ role in their own self-care. In addition, the COVID-19 pandemic has caused an unprecedented increase in the use of certain categories of NHPs, such as alcohol-based hand sanitizers.footnote 4

Considering the prevalent use of NHPs and an aging population in Canada, appropriate risk mitigation and prevention measures, including effective product labelling, play an increasingly critical role in ensuring the health and safety of Canadians. When key information is not presented in a clear, legible and consistent format on product labels, it makes it difficult, and in some cases impossible without magnification tools, for consumers and health professionals to locate, read, and compare important safety information, which can lead to preventable harms or incorrect product selection. In this context, preventable harms include any preventable event that may cause or lead to harm through inappropriate NHP use. Preventable harms related to NHP labelling are known to occur when labelling inconsistencies exist between similar self-care products (i.e. cosmetics, non-prescription drugs and NHPs) or when important information is not effectively communicated, thus leading to inappropriate selection or adverse reactions, such as when:

Preventable harms not only negatively influence the health and safety of Canadians but may also add burden to the health care system and contribute to increased physical waste and economic loss based on inappropriate purchases. Additionally, preventable harms may negatively impact the Canadian economy through lost productivity.

Modernized contact information to reduce preventable harms

Under the current provisions of the Natural Health Products Regulations (NHPR), the label is required to display the postal address of the product licence holder. Modernized contact information, such as an e-mail address, telephone number, or website address is not required, although it may be provided voluntarily. A lack of modernized contact information limits consumers’ ability to ask product-related questions or report adverse events in a timely manner. This poses challenges for Health Canada to effectively mitigate post-market risks and preventable harms.

Clarification of existing provisions of the Natural Health Products Regulations

Certain clarity and language inconsistency issues exist within the NHPR. Health Canada has taken this opportunity to bring forward amendments to address these issues without creating additional regulatory burden.

Clarification of security packaging requirements in the Natural Health Products Regulations

Currently, all NHPs, with the exception of throat lozenges, are required by the NHPR to have security packaging. This is not aligned with requirements that exist in Canada for similar non-prescription drugs regulated under the Food and Drug Regulations (FDR) or with security packaging requirements for similar products in the U.S. In addition, Canada has committed to making changes to this provision to meet its obligations under the Canada-United States-Mexico Agreement (CUSMA). Security features will remain a requirement for packaging of certain products, including ingestible products, products for ophthalmic use, and mouthwashes. Security packaging helps to ensure the quality of the product and that it has not been tampered with.

Background

NHP labels communicate important information to consumers and health professionals about the products’ safe and effective use. A “label” is an all-encompassing term that covers the affixed information on the actual health product package and other information that is made available to consumers and health professionals, including the product box and any included package inserts or leaflets.footnote 5 Important information should be clearly and consistently displayed so consumers can make comparisons between products, properly select and use NHPs, be fully informed of their benefits and harms, and be able to avoid preventable harms or unintended purchases of the wrong product.

In 2014, the FDR were amended to introduce Plain Language Labelling (PLL) requirements for prescription drugs and non-prescription drugs.footnote 6 The principles of PLL are in line with the general principles of labelling beyond health products, such as those that supported the implementation of a Nutrition Facts table for food. These principles include the use of a design that is easy for the intended audience to see and understand. Design factors supporting PLL include typography, form, and communication,footnote 7 and relate to font type, size, and clarity. The use of such design and format criteria enables important information to be presented in a manner that ensures legibility and comprehension to mitigate and prevent harm. The standardized table format was modelled after the Drug Facts Label in the U.S.footnote 8 This approach has also been used to create similar rules for non-prescription drugs and prescription drugs in Australia.

In Canada and internationally, health literacy research has demonstrated that when information is presented in an unclear, confusing, or inadequate manner on health product labels, it can contribute to preventable harms. These harms may lead to time off work, visits to a physician, clinic, or emergency room, and/or hospitalization or a lack of resolution of the disease or condition from inefficacy. In extreme cases, preventable harms can lead to serious injury resulting in ongoing disability or death.

Studies analysing errors related to the selection or use of health products have generally been conducted on prescription drugs. However, the principles of design and the need for the effective communication of important information to minimize these errors are also appropriate for non-prescription drugs and NHPs. For example, a study specific to prescription drugs suggested that the use of white space on product labels improves legibility for seniors;footnote 9 this would also apply to the legibility of similar, important information presented on NHP labels.

Currently, an inequity exists between the non-prescription drug and NHP market; non-prescription drugs are required to meet improved PLL requirements to support their safe use, while NHPs, which may, in some instances, have similar risk profiles (e.g. ginkgo biloba, high-dose vitamin and mineral supplements) present information in a variety of formats. Similar to the policy objectives underlying the implementation of the Nutrition Facts table and Drug Facts table in Canada, improved labelling for NHPs will lead to positive outcomes for NHP consumers, which represent a larger portion of the population than non-prescription drug consumers.

Through consultations with stakeholders, consumer groups provided feedback that type sizes on current NHP labels are too small, in particular for seniors who, in some cases, require the use of a magnifying glass to read important information. Displaying important information in a standardized table format would allow consumers to more easily:

For NHPs, the NHPR sets out rules for labels and packages. While Health Canada recommends a facts table and the principles of the PLL amendments for NHPs through guidance for industry,footnote 10 there is no evidence that the NHP industry has been adopting these best practices.

Natural health products and associated preventable harms

According to the Canadian Institute for Health Information, Canadians made approximately 15.8 million trips to hospital emergency departments in 2011, with an estimated 1.9 million trips related to preventable medication errors. Separate international reports have indicated that about 33% of all medication errors are caused by issues related to product naming, packaging, and labelling.footnote 11 For example, from 2013 through 2017, the Ontario Poison Control Centre received 2,777 reports related to essential oils.footnote 12 A common theme throughout the reports was consumption in excess of the recommended dosage on the label and/or confusion with another medication (e.g. cough syrup), which in some cases led to hospitalization.

More recently, the increased use of hand sanitizers through the COVID-19 pandemic has highlighted the preventable harms associated with these products. In particular, data from the Canadian Poison Control Centres show that the number of reported incidents related to hand sanitizers has increased in 2020 compared to 2019, up to 4.5-fold higher on a month-to-month basis. High demand for hand sanitizers during the pandemic has led to shortages in both product availability and standard packaging, resulting in the use of unconventional packaging such as food or beverage containers. The use of these containers without sufficient labelling leads to the belief that these products are consumable. In many cases, labelling did not contain warning statements, did not state that the product should be kept out of the reach of children and did not comply with basic legibility requirements for type size, font style and contrast. As a result of this increase in reports received by poison control, Health Canada responded with a published health advisory in October, 2020.footnote 13

In addition, the potential for NHP-prescription drug interactions can be significant, highlighting the need for measures to reduce the likelihood of preventable harms associated with NHPs. Concurrent NHP and prescription drug use among Canadians is common. A pharmacy-level study of 1,118 patients reported that 58% of participating patients took both NHPs and prescription drugs concurrently.footnote 14 Of the patients taking an NHP and a prescription drug concurrently, 7.3% reported one or more adverse events. This corresponded to a 6.4 times greater likelihood of experiencing an adverse event than those in the study who took prescription drugs alone. However, the indications on the labels of most of these products state that they are only for use amongst healthy adults for general health purposes (e.g. supports health and wellness).footnote 15 An additional study that examined children who were receiving care in a pediatric hospice found that almost half of all patients had potential NHP-drug interactions, while 22% had potential NHP-NHP interactions (i.e. interactions between different NHPs).footnote 16 For example, ginseng is known to reduce the effectiveness of antihypertensive agents and antidepressant drugs, and ginkgo biloba can interfere with antibiotic drugs, potentially leading to ineffective treatments.footnote 17,footnote 18 St. John’s Wort can reduce the effectiveness of immunosuppressive drugs used to treat individuals living with Human Immunodeficiency Virus (HIV) and is contraindicated for use in patients taking anti-cancer medications, blood thinners, antidepressant medications, cardiovascular medications, and contraceptive medications.footnote 19,footnote 20,footnote 21 It has also been linked to transplant rejections due to its inhibitive effect on immunosuppressant drugs.footnote 22

NHPs have also been found to be used more frequently by women and certain vulnerable subpopulations (e.g. older adults and certain patient groups with chronic medical conditions such as HIV/AIDS, cardiovascular disease, and diabetes).footnote 23,footnote 24 The increasing use of NHPs and their concurrent use with other medications places additional importance on the timely and effective communication of key information in order to protect the health and safety of these Canadians.

While it is difficult to precisely identify the total number of preventable harms associated exclusively with NHPs, their widespread use and a growing demand increases the potential for preventable harms related to confusion or illegibility of label information.

Adverse event reporting related to natural health product use

From the introduction of the NHPR in 2004 until December 2021, Health Canada has received reports of over 8,147 serious adverse reactions in which NHP use had a suspected role. Between January 2015 and December 2017, Health Canada received reports of 207 medication errors suspected to be related to NHP use, with six of these related to labelling errors or labelling confusion.footnote 25 For example, Health Canada has received adverse reaction reports related to label confusion where warnings have been missed and consumers experienced adverse reactions. In one instance, Health Canada received an adverse reaction report of a child accidently ingesting an NHP where the font size of the “Keep Out of Reach of Children” warning statement was only legible with a magnifying glass, such that the parent may not have been aware of the need to keep the product out of reach of their child. Health Canada has also received serious adverse reaction reports for products containing green tea leaf extract, where suspected rare, but serious cases of liver injury and hospitalization occurred. In this instance, Health Canada requested that companies responsible for these products strengthen their warning statements.footnote 26 Presenting warning statements in a clear, consistent, and legible format on NHP labels will further protect the Canadians that use these products. It should be noted that the role that product labels play in adverse reactions is not always captured in the reports and the reports themselves only reflect a small proportion of the actual events that occur.

Research has shown that the reporting of adverse reactions is low; the rate of reporting for prescription drugs has been estimated to be between 1% and 10%,footnote 27 while studies specific to NHPs suggest the rate may be closer to 1% to 2%.footnote 28 Consumers frequently use NHPs with the assumption that because they are natural, they are without risk. Most Canadians, according to Health Canada’s public opinion research, do not consider these products to be drugs. As such, they may not even think to identify the product as the reason for the adverse reaction.footnote 29 This misconception can contribute to underreporting of NHP adverse reactions.footnote 30 This underreporting is likely exacerbated by a lack of modernized contact information on most NHP labels that would enable consumers and health professionals to reach a Canadian representative in a timely manner to ask questions or report problems.

Additional evidence has demonstrated that consumers often have questions related to NHP use. In a study of 131 pharmacists, 89% reported spending more than 30 minutes per day counselling consumers on NHP use.footnote 31 While the ability to discern key information easily and readily is important in all settings, it is especially important when these products are sold outside of pharmacies. In the absence of a health professional, it is critical that there be accessible ways to contact a product representative to answer consumers’ health-related questions.

Consumer perspectives and the Canadian context

It is important to consider risks associated with NHP use in the context of consumers’ perceived knowledge of their safety and effectiveness. In 2016, only 19% of Canadians surveyed by Health Canada reported being knowledgeable about NHPs.footnote 29 A majority of Canadian consumer health product users reported that it is important to have directions for use (70-77%), ingredients (66-72%), warnings (66-75%), and dosage information (71-78%), directly on product labels.footnote 32 Given that only 19% of Canadians reported being knowledgeable about NHPs, many Canadian consumers could be better informed of the safety and effectiveness of NHPs. Clear and consistent (standardized) labels will help bridge this gap by more effectively providing key information prior to, and during, NHP use.

A 2015 focus group study by the Institute for Safe Medication Practices found that consumers felt the current formatting of consumer health product labels (such as type size and font type, for NHPs and non-prescription drugs) made important information challenging to access, understand, and use.footnote 33 This view was also supported by further research on self-care products (in this case, for non-prescription drugs) demonstrating that type size affected comprehension, especially for older adults.footnote 34 Another study, conducted specifically with NHPs, outlined that standardization (consistency of the format and presentation) is important to effectively convey important information.footnote 35

Through an online Health Canada public consultation conducted between September and October 2016, participants reported concerns about label clarity and the need for increased consumer education on how to read and use NHP labels.footnote 36 Participants attending Health Canada consumer engagement sessions in 2018 raised concerns related to the legibility and usefulness of current NHP labelling and expressed that text is often presented with poor contrast and in a type size that is too small or difficult to read.footnote 37 They supported labels that are accurate and complete, that clearly state all warnings (including allergen information) and noted that medicinal and non-medicinal ingredients should appear side-by-side.

Audit by the Commissioner of the Environment and Sustainable Development

An audit of Canada’s NHP program was conducted by the Commissioner of the Environment and Sustainable Development (CESD) in 2020 and the findings were published in a report to Parliament in April of 2021. This report noted that information on NHP labels was not easy to read. The recommendations listed in the report included improving the labelling of NHPs to ensure that information on product labels is clear, consistent and legible for consumers and can be read without the need for a magnification tool. In the formal response to the report, Health Canada committed to addressing these issues through these amendments.

Objective

The objectives of these regulatory amendments are to:

Description

Introduction of improved natural health product labelling requirements

Health Canada is modifying the NHP labelling requirements by amending the NHPR in the following manner:

Introduction of a Product Facts table

Important information already required by the NHPR on the label of an NHP in a non-standardized format, and newly required information specific to NHPs containing a food allergen, gluten, added sulphites and/or aspartame will be required in the format of a standardized Product Facts table. The following headings, and information under those headings, must be placed in a bilingual table or two unilingual tables (one in French and one in English), titled “Product Facts/Info-produit”, or alternatively, “Drug Facts/Info-médicament”:

The Product Facts table must be displayed in either a vertical or horizontal orientation and may span one or more panels of the outer label or, if there is no outer label, the inner label. The title “Product Facts” must be larger than each heading, and each heading must be larger than the information contained under that heading. All text within the table must be in a regular, single type, except for the title “Product Facts”, and headings, and information found under “Warnings”, which can be in bold type. The title of the table must be separated from the headings by a solid black line, and each heading and information under that heading must be separated by a solid black line from the heading that follows. Characters within the table cannot be in contact with each other and no other information, other than the required information, may be shown in a Product Facts table.

On the same label as the Product Facts table, the NHP will have to show the following information:

Where the outer label of an NHP is required to display a Product Facts table, the inner label must show the following information that is currently required, in addition to newly required information specific to NHPs containing a food allergen, gluten, added sulphites and/or aspartame:

If there is insufficient space on the NHP label to accommodate a Product Facts table and the information required to be contained within it, a series of flexibilities will be permitted to enable the product to accommodate the new requirements while ensuring that key information relating to the health and safety of Canadians is accessible. However, before accessing any of these flexibilities, information must be in a minimum condensed type size (i.e. 5 point condensed for non-medicinal ingredients and 5.5 point condensed for all other applicable information) and must be shown in a single bilingual Product Facts table. If these conditions are met, the following flexibilities will be permitted:

If any of these flexible approaches are used, a statement must be displayed directly under the Product Facts table heading, indicating where the information that has been removed from the table can be found. In addition, if any of these flexibilities use a product insert or website, the associated insert or website must display a full and complete Product Facts table.

Labelling requirements for NHPs exempt from the Product Facts table

An NHP will be exempt from the requirement for a Product Facts table if it meets any of the following risk-based criteria:

For these NHPs, the inner and outer labels will have to display the following information that is currently required, in addition to newly required information specific to NHPs containing a food allergen, gluten, added sulphites and/or aspartame:

The outer label or, if there is no outer label, the inner label will have to show the following, already required information:

The following flexibilities will apply to an inner or outer label if there is insufficient space on that label.footnote 40

If one or both of these flexible approaches are used, the NHP’s label must contain a statement indicating where the information that has been removed from the label can be found (i.e. on a leaflet, a package insert, or a website).

Improved labelling requirements for all NHPs
Clearly and prominently displayed label text

The NHPR is amended to include that statements, information, or declarations required by the regulations must be shown in a type size of at least 6 points (or 5.5 points, if condensed). Non-medicinal ingredients will have to be shown in a type size of at least 5.5 points (or 5 points, if condensed). In addition, this required text will have to be displayed in a single colour, visually equivalent to 100% solid black (i.e. dark blue, green, brown, or purple) and be contrasted with a white or uniform neutral background with maximum 5% tint of colour. Exceptions to these requirements will include:

In addition, these legibility requirements will not apply to specific information such as lot numbers, product numbers, brand names and advertising information.

“Point” will be defined in the NHPR as a unit of measurement for type size that is equal to 0.3527777778 mm.

Labelling of food allergens, gluten, added sulphites and aspartame

In order to implement the new statements for food allergens, gluten, added sulphites and aspartame; these amendments to the NHPR include definitions for “food allergen”, “gluten”, “added sulphites”, and “food allergen source, gluten source and added sulphites statement” that have the same meaning as in the FDR. These amendments also include requirements for declaring food allergen sources, gluten and its sources and added sulphites, to ensure that this information is clear to consumers.

NHPs that list food allergens, gluten, added sulphites and/or aspartame on their label as ingredients, will also be required to include a food allergen source, gluten source and added sulphites statement in bold (e.g., “Allergens: Milk”) in the “Warnings” section of the Product Facts table or elsewhere on the label if the NHP is exempt from the facts table requirement.

Modernized contact information

The NHPR is amended to require a manufacturer or importer to display an e-mail address, telephone number, or web address within an NHP’s Product Facts table (or elsewhere on the label if the NHP is exempt from the facts table requirement), instead of a postal address. Currently, a postal address cannot be replaced with modernized contact information, and it may be challenging to display both. Postal addresses are antiquated and infrequently used by most Canadians to contact a company. In addition, feedback received through consultations indicated that more product-related feedback is received through companies’ websites.

International Nomenclature Cosmetic Ingredient (INCI) names for NHPs

The NHPR is amended to allow an NHP’s non-medicinal ingredients to be shown on the label using their INCI name, instead of being displayed in both English and French, or any other language if there is no French or English equivalent. INCI is an internationally developed and accepted nomenclature that can be used in any language to identify common ingredients/properties, most notably used for cosmetic ingredients, but also is used for NHPs and non-prescription drugs.

Current NHPR labelling provisions that will continue to apply

Current requirements under the NHPR in relation to information required on the principal display panel of an NHP’s inner label and, if any, its outer label will still apply. In addition, the requirements under section 94 (Small Package Labelling) will continue to apply to NHPs where the immediate container is not large enough to accommodate an inner label that complies with the general requirements.

Amendments to the Natural Health Products Regulations related to security packaging

These amendments clarify that the only types of NHPs subject to the security packaging requirements in the NHPR are:

Amendments to the Natural Health Products Regulations for clarification

In addition to the above, the NHPR is amended for clarification. These amendments do not set out new requirements nor remove existing requirements and are expected to be cost neutral to both government and regulated parties. The following amendments will come into force on the date that they are registered:

Coming into force and transitional provisions

The amendments to the NHPR to clarify existing rules, and to include new security packaging requirements will come into force upon registration of these regulations. The labelling-related changes included in these regulations will come into force three years following registration. Following year three, all new products entering the market will have to meet the new labelling requirements. This delayed coming-into-force date of three years following registration will avoid businesses from having to redesign and re-label products for which product licence applications will soon be submitted, or have already been submitted, to the Minister and are awaiting a decision.

NHPs licensed and labelled in Canada prior to the day these amendments come into force will be provided with an additional transition period of three years - a period during which they can continue to be sold without complying with the new labelling requirements - for a total period of six years following registration. This period will provide sufficient time for companies to redesign product labels to comply with the new requirements and will provide an opportunity for stocks of existing products to be sold without having to be destroyed or re-labelled. This will reduce re-labelling and removal costs, especially for small to medium size enterprises, and reduce environmental impacts by allowing products to reach the end of their normal life cycle.

As noted by stakeholders during Health Canada’s technical consultations and through the cost-benefit analysis (CBA) survey, a coming into force and transition period of this length reduces the risk of supply chain bottlenecks with third party designers, labellers, and packagers. In addition, stakeholder feedback indicated that within a six-year timeframe, most companies will engage in some form of re-labelling, at a time most convenient for their business, regardless of the new requirements. However, in order to balance the objectives of these amendments with these important implementation considerations, Health Canada encourages the earliest adoption of the new requirements.

Health Canada will undertake a review of the Compendium of Monographs in order to help product licence holders accommodate a Product Facts table on their labels. Warning statements that are no longer necessary will be removed from the monographs. Amendments will also be made to warning statements to make the language more concise and understandable. Any necessary changes to product monographs will be finalized prior to the coming into force of the regulations. If a product licence holder chooses to remove or modify any risk information on the label of an NHP to support the implementation of these amendments or to align with the updated monographs during the three-year transition period, the transition provisions will allow for a notification to be submitted to the Minister instead of an amendment, which is currently required. Risk information includes caution statements, warnings, contraindications, or known adverse reactions associated with the NHP’s use. The notification must include the label text and occur within 60 days after the day on which the change is made.

Regulatory development

Consultations prior to prepublication in the Canada Gazette, Part I

To inform these amendments, consultations were undertaken as part of the proposed Self-Care Framework, which began in April 2016. Feedback was obtained from over 2,500 Canadians, providing baseline information on how Canadian consumers perceive and use self-care products.footnote 41 Together with previously provided consultation feedback for the Consumer Health Products Framework,footnote 42 the public opinion research informed material for an online consultation that took place from September 2016 to October 2016. In addition to these consultation activities and public opinion research, Health Canada sought input from stakeholders through a number of other engagement activities prior to publication in the Canada Gazette, Part I (CGI):

Health Canada also conducted consumer focus group sessions to engage Canadians on the proposed approach for NHP labelling from May to July 2018. Findings from the sessions were published in a “What We Heard Report” that is posted on the Department’s website.footnote 43

Three key themes were present throughout these discussions with Canadians. Firstly, all participants read labels of self-care products, whether regularly or occasionally, to learn more about the product they were using or choosing to buy. Secondly, participants deemed certain key information on the label as most important, such as warnings, ingredients, and dosage information; however, there was no support for removing other information (that may be of secondary importance) from the label. Thirdly, participants communicated that current labels are not always easy to read, due to type size being too small, poor contrast (black text on a white background was preferred), and non-standardized presentation of information.

Based on stakeholder feedback, the Department incorporated flexible approaches for the Product Facts table, an exemption from the Product Facts table for certain low-risk products, additional flexibilities and exceptions for very small packages, and an extended period for existing products to come into compliance with the new requirements (i.e. six years). This was the proposal published in CGI in June 2021.

Summary of comments received during prepublication in the Canada Gazette, Part I

The proposed Regulations Amending the Natural Health Products Regulations were pre-published in CGI on June 26, 2021. The proposed amendments, as well as a draft guidance document, were open for a 70-day comment period and then extended to 90 days (June 26 to September 24, 2021), during which the Department received comments from 139 respondents. Respondents included health care professionals and organizations, consumer and patient safety groups, food and consumer health product industry stakeholders and industry associations.

The comments on the proposed approach to improved labelling of NHPs ranged from very supportive to highly critical. Health Canada received 18 support letters from the Canadian Celiac Association chapters, Patients for Patient Safety Canada, Canadian Society of Hospital Pharmacists, and individual health professionals, academics and consumers. In addition, over 56 template letters were received that expressed support for the changes and provided specific recommendations regarding allergen labelling.

Industry stakeholders expressed their preference for non-regulatory approaches, or other regulatory priorities, including collaboration with stakeholders and health care professionals to disseminate information and create educational tools to support an increased understanding of current labelling to support the safe use of NHPs. While Health Canada agrees that consumer education and stakeholder collaboration can play important complementary roles, they are not a replacement for clear and legible labelling. Comments related to specific topics are summarized below. In response, a number of adjustments to these amendments have been made where supported by evidence.

I. Comments related to improved labelling for NHPs
i. Product Facts table format

Industry stakeholders suggested formatting flexibilities to ensure that the Product Facts table fits on existing packaging for a greater proportion of products, and in particular for small packages. Health Canada has taken these suggestions into consideration and has provided additional flexibilities. For example, for NHPs with very small packages accessing the provided flexibilities, the product label will only require one indication of where to find the regulatory information that has been moved to a leaflet, package insert, or website. In addition, Health Canada will provide an accompanying guidance document that will include information on how to apply the regulations by supporting the inclusion of the Product Facts table on unconventional package shapes and sizes. These changes will ensure greater alignment and consistency with formatting requirements previously introduced through PLL for non-prescription drugs and ensure that Canadians have access to the information they need to make informed choices.

ii. Product Facts table exemptions – where the entire content of the product is used within one day or less

Health professional stakeholders raised concerns around the wording used in the proposed regulations for the exemption from the Product Facts table requirement for products with a duration of use of one day or less. They suggested that it would inadvertently exempt higher-risk products, such as professional use fluoride products, rather than the intended lower-risk products, such as NHP samples. In response, Health Canada has clarified in these amendments that exemptions from the Product Facts table requirement are provided for NHPs where the entire content of the product is intended to be used within one day or less as per the directions for use on the label. This will ensure that the exemption aligns with the policy intent to focus only on NHP samples and lower-risk products for use within one day.

iii. Product Facts table exemptions – lowest-risk products

Industry, consumer and patient safety groups recommended further clarity and consistency with how Health Canada had categorized products using a risk-based approach to identify the lowest-risk products that would be eligible for exemptions from the enhanced legibility requirements and a Product Facts table. They had communicated that there are products that could be considered lowest-risk products that were missing from the list published in CGI. Health Canada has taken this into consideration and has added the following categories of products to the Products Fact table exemption:

Expanding the list of lowest-risk products will reduce the proportion of NHPs that are required to use more label space, or even increase their packaging size to meet the new requirements. This will help ensure that environmental and financial impacts are minimized. It will also improve alignment with requirements for similar products marketed in the U.S, as well as with requirements for similar non-prescription drugs in Canada.

iv. Very small package flexibilities – should apply to larger packages

Stakeholders from industry associations requested that the definition of very small packages (77.5cm2 or less) be changed to accommodate packages of larger sizes. They outlined that while the proposed size of 77.5 cm2 aligns with the U.S. exemption for dietary supplements, the U.S. does not have similar bilingual labelling requirements. In addition, many of the marketed traditional Chinese medicines are labelled in three languages. To address these concerns, Health Canada has expanded the definition of very small packages in these amendments to include those that are 90 cm2 or less. This size was selected to accommodate the average size of a tincture bottle, or an NHP with a package that contains 30 or fewer units/doses, for which the application of innovative labels, such as peel-backs, may be more difficult due to their size, shape and packaging material.

v. Very small package flexibilities – should also apply to the inner label

Industry stakeholders suggested further clarity on the minimum requirements for very small inner labels. In particular, the proposed amendments published in CGI provided an exemption from type size, font, and contrast requirements for very small outer labels and very small inner labels when there was no outer label. However, in the case where a product had a very small inner label and an outer label that is larger, the proposed amendments required that the inner label would have to meet these enhanced legibility requirements. This approach was inconsistent with the original policy intent. Health Canada has subsequently clarified in these amendments that the labelling exemptions for very small packages should apply to the inner label as well as the outer label.

vi. Additional flexibilities – websites

Stakeholders from industry and industry associations, health professional organizations and consumer and patient safety groups commented on the use of websites. Consumer and patient safety groups suggested that medicinal and non-medicinal ingredients, contraindications, warnings, sources of medicinal ingredients, and drug interactions should all be on the physical label, rather than having the possibility of removing it to a website. Industry associations and industry stakeholders suggested that more information could be moved to a website and that a regulatory definition be included that would fully enable the website to be an extension of the physical label. While Health Canada agrees that some information could be moved to a website, these considerations were already incorporated in the CGI proposal. In addition, while stakeholders wanted to expand the amount of information that could be moved to a website, it is important to note that consumers and health professionals saw use of a website as a complement, and not a replacement for the physical label. These amendments provide flexibilities for industry while ensuring accessibility of important information necessary for Canadians to make informed choices and protect their health and safety.

vii. Allergen labelling – Product Facts table heading

Industry, consumer and patient safety groups and health professional stakeholders communicated that the term, “Alert”, in the proposed heading, “Allergy Alert”, could be seen as redundant. Given that allergens are already listed in the warning section, this should be sufficient in alerting Canadians to their presence in an NHP. Furthermore, industry stakeholders indicated that the heading, “Allergen(s)”, would better align with allergen labelling of international partners such as the EU and U.S. Health Canada has modified the heading to, “Allergen(s)”, from, “Allergy Alert”, in order to decrease redundancy and better align with labelling of international partners such as the EU and U.S., thus mitigating the need for unnecessary label changes for imported products.

viii. Allergen labelling – fragrance and contact allergens

Stakeholders representing industry and consumer and patient safety groups suggested that the list of allergens required to be displayed in the “warnings” section be expanded to include contact allergens to align with the European Commission’s Cosmetics Regulation (EC) No 1223/2009. In response, Health Canada will include recommendations in guidance on how to list these additional fragrance and contact allergens to denote them, but has not made any changes to the amendments. This will ensure alignment with international partners, as well as reduce risks associated with accidental exposure.

ix. Allergen labelling – added sulphites

Consumer and patient safety groups and health professionals noted that the proposed amendments did not explicitly capture the addition of sulphites to an NHP as a food allergen, and some also communicated that the draft amendments were not clear in this regard. They requested that the allergen labelling requirements apply to added sulphites as well as the other priority food allergens and that they be included for labelling purposes in these amendments. In order to align with the FDR, and the requirement for priority food allergens, Health Canada has modified the amendments to include added sulphites to NHPs in the “Allergen(s)” subsection in the Warnings section of the Product Facts table.

x. Allergen labelling – removing allergens from non-medicinal ingredient list

Consumer and patient safety groups did not support a proposed flexibility to remove allergen information from the non-medicinal ingredient list if it is already listed in the “Warnings” section. Rather, stakeholders preferred listing the allergen information in two places in those limited scenarios where required as it reduces the risk of consumers missing this important information and accidentally exposing themselves to harmful allergens. Health Canada has modified these amendments to require allergen information to be included in both the non-medicinal ingredients and “Warning” sections when required. This will ensure that allergen information is always present on product labels and can be found where consumers are accustomed to seeing it.

xi. Modernized contact information – mandatory requirement

Stakeholders including industry stakeholders, industry associations, consumer and patient safety groups and health professional organizations were highly supportive of the use of modernized contact information, including the use of websites, e-mail addresses or phone numbers, instead of a postal address. They also commented that the use of modernized contact information should be a mandatory requirement. An industry association stakeholder had also suggested that further clarity be provided as to who the legal contact person should be, and whether this change would impact existing product license holder and importer agreements. Health Canada has modified the amendments to require the product licence holder, or importer if the product is imported, to display an e-mail address, telephone number, or website address of a contact person within the NHP’s Product Facts table (or elsewhere on the label if the NHP is exempt from the facts table requirement), instead of a postal address. This will make it easier for consumers to notify the product licence holder(s) in the event of an adverse drug reaction or other complaint. Health Canada will provide additional clarity on how to appropriately comply with this requirement in the associated guidance document.

II. Comments related to security packaging
i. Security packaging

Stakeholders, most notably industry and industry associations, raised concerns that the requirements as proposed in CGI regarding security packaging for topical NHPs are more stringent than those for topical non-prescription drugs. In addition, they raised that Canada had committed to addressing this long-standing industry irritant through the CUSMA to better align security packaging requirements with other North American trading partners, who do not require security packaging for most topical and oral products (excluding mouthwash). Health Canada is taking this opportunity to amend the NHPR to update security packaging requirements for NHPs to align with non-prescription drugs and to meet Canada’s CUSMA obligations. In addition, this will reduce the use of plastics and therefore the environmental and financial impact of these amendments.

III. Comments related to the coming into force and transition period
i. Delay the coming into force of these regulations

Industry and industry association stakeholders proposed in their responses that the final publication and coming into force of these regulations be delayed. They believe that a delayed coming into force would allow for product monographs (which are factual scientific documents supporting the safety, efficacy or quality of an NHP and are helpful in simplifying product approvals) to be updated, which has been committed to as a part of these regulatory changes. They mentioned that aligning the coming into force of these regulations with future changes for NHPs and non-prescription drugs would minimize the duplication of labelling changes. Following consideration, Health Canada does not recommend further delaying the coming into force of these regulations as this proposal has been consulted on since 2016 and the delayed coming into force, along with the extended transition period, was put in place to allow for the changes to the product monographs and to align with industry re-labelling cycles. This will ensure Canadians have access to clear and legible NHP labels sooner as recommended as part of the CESD audit completed in 2021.

ii. Extend the transition period of these regulations

Industry association stakeholders recommended extending the transition period from anywhere between four to seven years or more due to the impact of COVID-19 on the industry. They also suggested extending the transition period in order to give retailers the necessary time to adapt. Some consumer and patient safety groups advocated for the transition period to be shortened to no longer than two years or a maximum of three since they saw six years as too long for Canadians to wait to have access to clear and legible labels. Upon consideration, Health Canada does not support extending or shortening the transition period. The transition period is based on information provided by industry through a survey that was conducted in 2018 and takes into account typical re-labelling cycles for NHPs (which were up to, but not exceeding, 5.5 years). Maintaining the current transition period will ensure Canadians have timely access to clear and legible NHP labels that promote the safe use of these products, as recommended in the CESD audit.

Iv. Comments related to the cost-benefit analysis and environmental impacts
i. Cost-benefit analysis process comments

One industry respondent commented on the estimation and quantification of costs and benefits included in the CBA and questioned if the methodology was compliant with their interpretation of the Treasury Board of Canada’s policies and guidance. The stakeholder had suggested other methods of analysis and proposed that the CBA be updated to describe the impact on industry in greater detail. Health Canada notes that certain comments focussed on the policy development process or costing implications included as part of the draft guidance document and did not relate to the incremental impacts of the amendments; therefore, HC could not address them. In addition, comments that were not accompanied by substantiating data and/or not relevant to the CBA of these amendments were not addressed. The incremental costs and benefits of these amendments were determined in accordance with Treasury Board of Canada’s policies and the costs and benefits included in the CBA have been updated to reflect the revised regulatory policy.

ii. Costs to industry

A small number of industry and industry association stakeholders provided feedback on the use of the survey of businesses in the CBA.

In addition, industry and industry associations expressed concerns that requiring a notification if the licence holder chooses to modify or delete risk information on labels could result in administrative burden to the government and industry. They based this assumption on their experience in implementing the labelling requirements for similar non-prescription drugs to comply with the PLL amendments.footnote 44 Health Canada can confirm that the notification process associated with these amendments will not have the same impact as the PLL amendments and will not increase administrative burden. Notifications will only be required during the transition period for licence holders who choose to modify or remove risk statements on the label of an NHP in accordance with changes made to risk statements by Health Canada through monograph updates. In addition, these notifications will be submitted through a digital form to Health Canada and can be provided up to 60 days after making the change, with no formal approval necessary.

iii. Environmental impacts

Industry stakeholders and an industry association were of the opinion that the environmental analysis done in support of these amendments was either incorrect, or that an extensive environmental assessment should be done. Specifically, some comments outlined that there would be high environmental impacts that were not included in the CBA and that there is an incremental increase in waste due to additional labelling materials required to comply with the amendments. However, no evidence was submitted to support the statements made regarding costs to the environment. Health Canada has considered the incremental environmental impacts if companies need to re-package products to comply with the regulatory requirements. Following a series of consultations to gain feedback from industry, these amendments have been carefully drafted to limit any unnecessary waste by providing labelling exemptions and flexibilities, where necessary, to allow most manufacturers and importers to continue using their existing packaging options. The amendments to remove security packaging requirements for certain NHPs introduced through these regulations are also expected to reduce environmental impacts through a reduction in the use of plastics. In addition, the extended transition period will provide time for companies to implement new labelling without having to dispose of existing label stock and replace or re-label products already on the market.

Instrument choice

Non-regulatory options – status quo

The Regulations Amending the Food and Drug Regulations (Labelling, Packaging and Brand Names of Drugs for Human Use), and accompanying Guide (Good Label and Package Practices Guide for Non-prescription Drugs and Natural Health Products), sets out the requirements and implementation approach for a Canadian Drug Facts table for non-prescription drugs. For consistency and good practice, this Guide also outlines a voluntary, standardized labelling format (which includes a Product Facts table recommendation) for NHPs. Through discussions with industry, Health Canada has determined that the adoption of this voluntary labelling approach has been low. Based on this feedback, and industry’s concerns related to the costs versus the perceived benefit of these amendments, the Department does not anticipate a significant increase in the voluntary adoption of improved NHP labelling. Continuing with this voluntary approach would not address the issue of dissimilar, unclear, confusing, and illegible NHP labels in the marketplace that lead to medication errors and selection of the wrong product.

Regulatory options
1. Standardized labelling format, with no exceptions, flexibilities, or exemptions, with a one-year coming into force and a three-year transition period

Health Canada originally considered a proposal that would require NHPs to display on the label a full Products Facts table and all of its required information, statements, and declarations, to be in a minimum type size and with specific contrast requirements. While this approach would enable the intended policy objectives to be achieved, the original proposal’s re-labelling and re-packaging burden on the NHP industry, especially for small businesses, would have been significant. In addition, the proposed requirements would not necessarily have been appropriate for all products from a risk-based perspective. While some NHPs have risk profiles similar to those of non-prescription drugs, there are certain NHPs that have lower risk profiles (i.e. those with a duration of use of one day or less, or those with a localized effect), such that a Product Facts table would not significantly impact preventable harms.

In addition, the burden on manufacturers, importers, labellers, packagers, distributors, and retailers of small packages would have been significant and, as originally considered, a coming-into-force date of one year following registration would not likely have provided enough time for products under development to implement the new labelling requirements. As such, Health Canada did not choose this approach.

When compared with the other regulatory options, this option would have the most significant environmental impact, as the short implementation period could have resulted in a number of marketed products requiring re-labelling or re-packaging. In addition, having no exemptions for small packages may have also resulted in those products requiring larger packages, thus creating additional environmental impacts.

2. Standardized labelling format with exemptions, but without flexibilities or exceptions, with a one-year coming into force and a three-year transition period

After further analysis and consultation with stakeholders, it became clear that certain products have risk profiles such that a Product Facts table format would not likely further mitigate potential harms. Therefore, Health Canada amended the proposal to exempt certain low-risk products from the Product Facts table requirement (e.g. toothpastes, mouthwashes, throat lozenges, certain inhaled products, and cosmetic-like skin care products). This option was preferable to Option 1 in terms of considering the risk profile of the product; however, it did not go far enough to address the burden the proposal would have imposed on manufacturers, importers, labellers, packagers, distributors, and retailers to re-package products. As a result, the Department made further changes to the proposal.

By exempting certain low-risk products from having to carry the Product Facts table and expanding the transition period, this option would have reduced the environmental impact outlined in Option 1, given that fewer products would require re-labelling or re-packaging. This option would require the Product Facts table to be on small packages that do not have a low-risk exemption; therefore, it could have a more significant environmental impact than Option 3, as the size of some packages could need to be increased to fit the required information.

3. Standardized labelling format with exemptions, flexibilities, exceptions, a delayed three-year coming into force and a three-year transition period

In addition to the proposed Product Facts table exemptions, this option would incorporate a number of other flexibilities that would be expected to further reduce burden on industry, while maintaining the achievability of the policy objectives. This proposed option accommodates, through a risk-based approach: NHPs in very small packages, NHPs where the entire content of the product is to be used in one day or less, and NHPs that contain three or fewer dosage units. These products would be exempt from the Product Facts table requirement and would also be exempt from the proposed minimum type size and contrast requirements. These exemptions would avoid the need to re-package these NHPs and mitigate an increase in package sizes throughout the distribution chain. This would also significantly reduce burden on manufacturers, importers, labellers, packagers, distributors, and retailers.

In addition, flexible approaches to accommodate a Product Facts table were incorporated into this proposed option. These include moving certain information outside of the Product Facts table (i.e. elsewhere on the label), or to a leaflet, an insert, or a website. This would further avoid the need to re-package NHPs due to the proposed amendments. However, in aligning with a risk-based approach, these proposed flexibilities were extended to all products, regardless of the size of the business/product licence holder.

The coming into force of the regulations, following registration, was extended from one year to three years in this option. This delayed coming-into-force date would provide industry with sufficient time to develop product labels that would meet the proposed requirements before submitting a product licence application. It would also provide sufficient time for any products currently under development or under review to potentially become marketed products before the coming into force. These now-marketed products could then take advantage of the transition period, during which existing products could continue to be sold without complying with the proposed amendments.

Furthermore, an additional three-year transition period would be provided for existing products (i.e. already licensed, marketed NHPs) following the coming into force of the proposed regulations. This proposed three-year transition period, combined with the three-year coming into force (i.e. six years in total), would provide manufacturers, importers, and labellers with sufficient time to re-label NHPs within their normal cycle of business. This would minimize the proposal’s incremental costs on industry and avoid the risk of supply chain bottlenecks with third party designers, labellers, and packagers. This extended period would also avoid the need to discard any unused or unsold NHPs throughout the distribution chain as well as costs related to potential voluntary recalls, as product labels could have otherwise been noncompliant (in which case a retailer could charge the manufacturer a fee). In addition, this extended coming into force and transition period would provide time for Health Canada to revise current labelling monographs and guidance to make them more concise and understandable and assure that they are necessary.

This option would minimize the environmental impact of the proposed changes in comparison to the first two options. Given the shelf life of most NHPs and the re-labelling cycle of most business, it is not anticipated that any products under this option would need to be removed from the market prior to their expiry, to be re-labelled or re-packaged. In addition, small packages would be exempt from requiring the Product Facts table, meaning there would be no requirement to increase package sizes.

This option would significantly reduce the burden and impact of the proposed regulatory amendments on manufacturers, importers, labellers, packagers, distributors, retailers and the environment, while still allowing the policy objectives to be met. Therefore, Health Canada has decided to proceed with this proposed option.

Regulatory analysis

The regulatory analysis has been revised based on new data and comments received during the publication of the proposed amendments in CGI.

Key changes in this section include:

Benefits and costs

This CBA provides both qualitative and quantitative costs and benefits of these amendments. Data related to costs were collected in March 2018 using a questionnaire distributed to stakeholders that will be most affected by these amendments, namely,footnote 45

Published literature and focus group discussions were also used to gather relevant information and expert opinions on impacts such as downstream logistic support (e.g. warehousing), availability of shelf-space in retail outlets, and time spent by pharmacists answering consumers’ product use-related questions. All incremental costs and benefits are in 2018 constant dollars, estimated over 15 years, expressed in present value (PV) using 2022 as the PV base year, and discounted at 7% as recommended in the Treasury Board Secretariat’s Canadian Cost-Benefit Analysis Guide. footnote 46 It is assumed that all existing products will be fully compliant with these amendments by 2028; therefore, this CBA assumes compliance costs and benefits will start accruing before 2028.

Due to the high uncertainty and lack of reliable information on the actual number of NHPs being sold on the Canadian market at any one time versus the number of products that have been licensed, this analysis uses 50,000 SKUs to estimate the impacts to industry.footnote 47

The full CBA report is available upon request.

Benefits

The following analysis outlines three expected incremental benefits with reliable and sufficient data to be evaluated quantitatively, and other expected benefits that are described qualitatively. Total quantified benefits are estimated at $292.5 million PV over 15 years.

The first quantified benefit measures the savings to consumers from avoided incorrect purchases. These amendments are expected to improve consumers’ access to, and understanding of, important information on NHP labels, which is expected to reduce inappropriate product selections by 50%. A consumer survey conducted by Health Canada in 2020 revealed that 0.09% of NHPs purchased in 2019 were not products that the consumer intended to purchase. When asked about reasons that contributed to these incorrect purchases, respondents indicated that 79.41% of these incorrect purchases could be attributed to illegible information displayed on product labels, unnoticed food allergens or ingredients in the product that they could not consume, or confusing information on product labels, which are issues being addressed through these amendments. This incidence rate was estimated by:

Incorrect purchases (0.07%) = incorrect purchases made (0.09%) * label related causes (79.41%)

This suggests that incorrect purchases made in 2019 represent 0.07% of NHP sales.footnote 48 The benefit of reduced incorrect purchases of NHPs is calculated as:

Benefit ($) of reduced incorrect NHP purchases

=

Total adjusted NHP sales ($5.1 billion)footnote 49

x

Purchase error percentage (0.07%)

x

Purchase errors avoided (50%)

Based on the above formula, it is expected that these amendments will provide an estimated monetized benefit to Canadians of $10.0 million PV over 15 years through avoided incorrect purchases.

The second quantified benefit relates to the inclusion of food allergen, gluten, added sulphites and aspartame information on NHP labels. This is measured by using Canadian consumers’ willingness-to-pay (WTP) for this information. The benefit was modelled using results from a study that measured Canadian consumers’ WTP for the inclusion of food allergen information on food labels in a safety statement format. The WTP for food allergen, gluten, added sulphites, and aspartame information on NHP labels is therefore estimated as:

Value ($) NHP consumers place on food allergen, gluten, added sulphites and aspartame information

=

Total adjusted NHP sales ($5.1 billion)footnote 49

x

Percentage of NHP users who read labels (89%)footnote 50

x

WTP as a % of expenses on NHPs (0.8%)footnote 51

The WTP is calculated as 0.8 cents for every dollar spent on NHPs. Based on the above formula, the value that consumers gain based on their WTP for food allergen, gluten, added sulphites and aspartame information on product labels is estimated at $197.3 million PV over 15 years.

The third quantified benefit links to the amendments to the NHPR to further clarify the types of NHPs that are subject to security-packaging requirements to align with the requirements for similar non-prescription drugs. Approximately 10.5% of topical NHPsfootnote 52 (5,250 SKUs) will no longer be subject to security packaging requirements and this will benefit the licence holders of these products. Using cost information available on the internet for security packaging materials,footnote 53,footnote 54,footnote 55 and the assumption that the security packaging would be outsourced, this cost saving was estimated by assuming 1,313 SKUs will no longer apply blister-pack as security packaging with an incremental annual on-going cost of $2,195. It is also assumed that the other 3,938 SKUs will not use shrink wrapping, shrink band, bottle with secure lock, or self-adhesive security tamper as a security packaging for their products, with an annual incremental cost of $1,742 per SKU.

Savings ($) from removing security packaging requirement

=

Number of SKUs

(1,313 SKUs blister pack)

(3,938 SKUs shrink wrap, etc.)

x

Estimated annual cost per SKU of product spent on security packagingfootnote 56

(Blister pack $2,195 per SKU)

(Shrink wrap, etc. $1,742 per SKU)

This amendment will come into force as soon as the regulations are registered; therefore, this benefit will start to be accrued in 2023. It is expected that removing the security packaging requirements for certain NHPs will result in a total cost saving of $85.2 million PV over 15 years. This amendment will also reduce environmental impacts due to the reduction in use of plastics both immediately and in the longer term.

It is anticipated that Canadians will benefit from these amendments in other ways. It is expected that a decrease in incorrect use of NHPs will reduce the incidence of adverse reactions or adverse events, particularly resulting from concurrent NHP-prescription drug or NHP-non-prescription drug use. This will result in cost savings to consumers and the health care system. This benefit was not quantified in the CBA model as data is unavailable for Health Canada to sufficiently estimate the probability that consumers will change their behaviour and avoid harm.footnote 57 Other qualitative benefits include reduced purchasing time for consumers when understanding and comparing products, and an increased ability for consumers to make more informed decisions.

Including modernized contact information provides consumers with an improved means of contacting product manufacturers or importers to pose questions, or to report harms. This is expected to further help consumers avoid incorrect purchases and prevent adverse drug reactions through better consumer access to the most up-to-date NHP-related health and safety information.

Costs to businesses

Label redesign is a common practice in the NHP industry for various reasons, including as part of their business and marketing strategy. Consultations with stakeholders revealed that, on average, businesses re-label their products every five years regardless of company size. Therefore, it is anticipated that businesses will incur re-labelling costs in the baseline scenario (i.e. in the absence of the amendments). As these amendments will also provide existing products with a transition period of three years, after the three-year delayed coming into force, to comply with the requirements, the analysis assumes that most businesses would normally re-label their products within this six-year timeframe. This suggests that businesses will incur at least a portion of the estimated compliance costs under the baseline scenario.footnote 58 This CBA assumes that businesses will incur 20% of re-labelling costs under the baseline scenario.

In this analysis, businesses will either continue with existing labelling configurations,footnote 59 or change to use a different labelling configuration, such as peel-back labels, or choose to adopt outer boxes, inserts or leaflets.footnote 60 No product discontinuation is assumed because these amendments do not require any product to stop being produced. Therefore, any product discontinuation is considered to be a business decision.footnote 61 The survey of businesses and consultation with major stakeholders also revealed that it is likely that businesses will continue using existing labelling configurations for 93.2% of total SKUs. These products will incur a one-time compliance cost only. Correspondingly, 6.8% of SKUs will use different labelling options which will result in one-time and ongoing costs.footnote 62

Distribution of product SKUs by product labelling configurations and updating information on product websites
 

Category of Products

Percent of total SKUs

Number of SKUs

1

Products continuing with existing labelling configurations

93.2%

46,600

2

Products using different labelling configurations (such as peel-back, outer box, insert or leaflet)

6.8%

3,400

3

Products that require website updates to comply with new requirements

5.0%

2,500

(1) Products continuing with existing labelling configurations

Through a survey of businesses, respondents indicated that the average incremental cost to redesign product labels, without using different configurations, is $5,333 per SKU.footnote 63 This takes into account the various labelling requirements that products will have to comply with (some will require food allergen, gluten, added sulphites and/or aspartame information; some will have to meet all of the new labelling requirements; and some will require all changes with the exception of a Product Facts table). The total incremental cost for these combined compliance actions for these 46,600 SKUs (93.2%) that will maintain their existing labelling configurations is estimated at $114.4 million PV.

Estimated one-time compliance costs for products that will continue with their existing labelling configurations

Labelling Configuration

Distribution %

Number of SKUs

Net Incremental
One-Time Cost table d5 note *

Small packages that only need to include food allergen, gluten, added sulphites and/or aspartame information

20.00%

10,000

$1,067

Products that do not need a Product Facts table

12.00%

6,000

$3,200

All new requirements on existing labelling configuration

61.20%

30,600

$4,266

Table d5 note(s)
Table d5 note *

After deducting 20% of redesigning cost to be incurred in the baseline scenario.

Return to table d5 note * referrer

(2) Products using different labelling configurations

The survey of businesses and consultation with major stakeholders also revealed that 3,400 SKUs (6.8%) will require more expensive labelling configurations to comply with the amendments. As such, product suppliers that decide to use different options may incur additional compliance costs on top of the $5,333 for label redesign per SKU.footnote 64 This anticipates that businesses adopting different labelling options will incur ongoing costs due to uptake of more expensive labelling options (which will be associated with every unit of product). Furthermore, these packaging options may result in incremental tooling costs.footnote 65 This analysis uses the survey of businesses, web-search information, and stakeholder’s feedback from pre-publication to re-estimate the one-time cost of the leaflet configuration, and on-going cost of products using different packaging or labeling options.footnote 66 The total compliance cost for the 3,400 SKUs that will require different labelling options is estimated at $42.6 million PV.

Estimated one-time compliance cost for products that will use a different labelling configuration

Labelling Configuration

Distribution %

Number of SKUs

Incremental One-Time Cost

Annual On-Going Cost

Peel back

3.40%

1,700

$5,770

$1,365

Leaflet or insert

2.72%

1,360

$7,825

$1,888

Outer Box

0.68%

340

$8,357

$2,070

(3) Products that require website updates

For some products to fully comply with the requirements, suppliers of these products will need to use flexibilities, such as moving selected information to product websites. They would incur incremental costs in creating or updating existing product websites. This is estimated with an assumption that 5% of products (2,500 SKUs) will need to update information on their product websites in order to continue with existing or using different packaging or labelling options, which is approximately $1.9 million PV.

Products required to update website information to be fully compliant

Additional Compliance Cost

Distribution %

Number of SKUs

Net Incremental One-Time Cost*

Updating a website to fully comply with all regulatory requirements

5.00%

2,500

$1,050

Costs to consumers

Costs to consumers are expected to be negligible since NHPs are sold in a competitive market and thus manufacturers and importers are likely to absorb costs to maintain existing market shares rather than increase product prices. However, some consumers may experience inconvenience if businesses decide to discontinue their preferred products.

Costs to government

Costs to government are not expected to be significant since the requirements will be incorporated into existing compliance and enforcement activities for NHPs managed by Health Canada. There may be a minimal incremental cost associated with consultation and engagement activities to inform and educate regulated parties on how to appropriately comply with the new requirements. However, Health Canada engages with NHP stakeholders on an ongoing basis and these types of activities fall within the normal day-to-day business of the Department.

Distributional impacts

A review of the literature indicated that Canadian NHP users that are more likely to read product labels are those with higher levels of education.footnote 67 These NHP consumers will benefit most from these amendments. Although the literature revealed that females are more likely to use NHPs,footnote 68 the anticipated impacts of these amendments are expected to equally benefit consumers, independent of sex or gender.

Other distributional impacts may be based on ethnicity of NHP consumers. Certain cultural communities (e.g. users of traditional Chinese medicines and Ayurvedic medicine) may be more likely than others to benefit from these amendments due to improved legibility and more standardized product information.

Environmental impacts

The environmental costs associated with these amendments will depend on the extent of changes to labelling configurations. Based on stakeholder feedback, NHP manufacturers and importers will likely maintain most of their current labelling configurations. Feedback from the wholesale industry outlined that due to warehousing and distribution constraints, there is little to no capacity to accommodate new labelling configurations that result in an increase in overall package size as pallet size(s) remain fixed. As such, this CBA assumes that the majority of stakeholders will choose peel-back labels, inserts, or leaflets to avoid increases in packaging size. In addition, most labelling and packaging materials used in Canada are recyclable or biodegradable; therefore, any incremental labelling or packaging materials used are expected to have a minimal environmental impact.footnote 69

The amendments to the security packaging requirements will offset these environmental impacts by removing the requirement for topical NHPs (10.5% of total SKUs) to have security packaging. This will help reduce plastic use and environmental impacts associated with the extraction of raw materials required in the production of plastic packaging. In addition, there will be a reduction in energy consumption associated with both the production and the waste disposal processes. In addition, these amendments provide a transition period of three years after the delayed three-year coming into force to prevent waste from unsold stock.

Table 1: Cost-benefit statement

Monetized costs (in millions)

Impacted stakeholder

Description of cost

Base Year
(2022)

Year before CIE
(2027)

Final Year
(2036)

Total
(PV)

Annualized Average

Industry

One-time compliance costs with existing labelling configurations

$0.00

$160.41

$0.00

$114.37

$12.56

One-time and on-going compliance costs with different labelling configurations

$0.00

$23.29

$5.59

$42.58

$4.68

One-time updating information on product websites

$0.00

$2.63

$0.00

$1.87

$0.21

All stakeholders

Total costs

$0.00

$186.33

$5.59

$158.83

$17.44

Monetized benefits (in millions)

Impacted stakeholder

Description of benefit

Base Year (2022)

Year before CIE
(2027)

Final Year
(2036)

Total
(PV)

Annualized Average

Industry

On-going cost saving from amendment related to security packaging table d9 note *

$0.00

$9.74

$9.74

$85.19

$9.35

Canadians

Benefits from reduced incorrect purchases

$0.00

$1.87

$1.87

$10.01

$1.10

Benefits from the value of allergen information

$0.00

$36.82

$36.82

$197.29

$21.66

All stakeholders

Total benefits

$0.00

$48.43

$48.43

$292.49

$32.11

Table d9 note(s)

Table d9 note *

This cost saving will come into effect upon registration of the amendments, thus will start in 2023.

Return to table d9 note * referrer

Summary of monetized costs and benefits (in millions)

Impacts

Base Year
(2022)

Year before CIE
(2027)

Final Year
(2036)

Total
(PV)

Annualized
Average

Total costs

$0.00

$186.33

$5.59

$158.83

$17.44

Total benefits

$0.00

$48.43

$48.43

$292.49

$32.11

Net impact

$0.00

- $137.90

$42.84

$133.67

$14.68

Qualitative impacts

Positive impacts:

Negative impacts:

Small business lens

The small business lens applies as there are impacts on small businesses associated with these amendments.

Based on the 2011 Functional Food and Natural Health Products Survey, there were 750 establishments operating in the functional food and NHP space, of which 566 establishments (including 144 establishments actively involved in both functional food and NHPs) were active in the NHP market.footnote 70,footnote 71

The functional food and NHP sectors experience a high rate of new product failures in the current market; the sectors’ success is highly influenced by the wide range of products as well as market segments and economic conditions.footnote 71 The latest database maintained by Health Canada indicates there are slightly more than 4,000 entities,footnote 72 including fewer than 2,800 Canadian entities that have applied for authorizations to market NHPs in Canada, although historical records show that not all products issued with product licences are actively marketed.

It is believed that small businesses are more vulnerable to any external challenges, including compliance with new regulatory requirements. This is due to lower profit margins, lower business volumes over which to spread fixed costs, and reduced access to capital or disadvantaged cash flow conditions. However, Health Canada’s survey of businesses revealed that medium and large businesses own a larger proportion of total product SKUs than small businesses (31.5%).footnote 73 Small businesses also reported a shorter period for their re-labelling life cycle, averaging 4.3 years,footnote 74 compared to an average of 5.1 years for all businesses which responded to the survey. The small business re-labelling life cycle period is shorter than the six-year compliance period of the amendments. This suggests that most, if not all, small businesses will have gone through at least one re-labelling cycle during this time, even without these amendments, thus limiting the incremental cost of these amendments.

Stakeholder consultations revealed that more than half of the impacted manufacturers and importers of NHPs in Canada are small businesses.footnote 75 Assuming that the sector impacted by these amendments is comprised of 70% (2,847) small businesses, and 20% (813) and 10% (407) medium and large businesses,footnote 76 approximately 15,742 SKUs impacted (31.5%) by these amendments will be owned by small businesses. This suggests that small businesses will be impacted with approximately $50 million (PV) of the total compliance costs, including 1,070 SKUs that will require different labelling options. This means that, on average, each small business will be impacted with $17,564 (PV) of compliance cost over the 15-year period. Medium and large businesses will be impacted with $69,062 and $129,453 respectively, per business, over the 15-year period.

In order to minimize impacts to all businesses (including small businesses) while maintaining the achievability of the policy objectives, these amendments, after various stakeholder consultations, now incorporate a number of flexibilities, namely:

Table 2: Small business lens summary

Compliance costs

Activity

Annualized value

Present value

Low-risk products

$0.47 M

$4.31 M

Small packages

$0.26 M

$2.39 M

Full compliance using existing labelling configurations

$3.28 M

$29.89 M

Full compliance using different options

$1.47 M

$13.41 M

Total compliance cost

$5.49 M

$50.00 M

Administrative costs

Activity

Annualized value

Present value

Total administrative cost

$0

$0

Total compliance and administrative costs

Totals

Annualized value

Present value

Total cost (all impacted small businesses)

$5.49 M

$50.00 M

Cost per impacted small business

$1, 928

$17,564

One-for-one rule

The one-for-one rule does not apply to these regulatory amendments, as they are not expected to increase or decrease administrative burden on businesses. Health Canada has confirmed that the purpose of the notification is to ensure the Department has updated and accurate information for products on the market. It is only required in cases where the product licence holder chooses to remove or modify the approved risk information displayed on the label of an NHP. This notification requirement does not meet the definition of administrative burden, as defined by the Red Tape Reduction Act, as its intent is not for compliance demonstration. The notification allows Health Canada to take corrective action in the event that approved risk information is found to no longer be appropriate.

Regulatory cooperation and alignment

In Canada, NHPs are regulated as a unique subset of drugs. In the U.S., some NHPs are regulated as non-prescription drugs while most are regulated as dietary supplements. The U.S. Food and Drug Administration requires non-prescription drug labels to contain a Drug Facts Label, which is very similar to the requirements of these amendments. In addition, the U.S. requires labels of dietary supplements to contain a Supplement Facts Table, which has similarities to the requirements included in these amendments (e.g. contrast, font size, and standardization). As such, all products in the U.S. that are considered NHPs in Canada will have a standardized table on their label containing important information. Furthermore, the ’Allergy Alert’ subheading required in the ’Warnings’ section was modified to ’Allergen(s)’, to align with labelling of international partners such as the EU and U.S., thus mitigating unnecessary label changes for imported products. Overall, these amendments will improve international label alignment with the U.S., especially from a consumer perspective.

In addition, the Australian Therapeutic Goods Administration (TGA) introduced new drug labelling standards in 2016. These standards included font, type, and format requirements (similar to those contained in these amendments) for all therapeutic goods in Australia, including NHP-equivalent products (i.e., listed medicines). These amendments to the NHPR will improve regulatory alignment with the Australian TGA.

These regulations amend the NHPR to clarify the types of NHPs that would be subject to security packaging requirements in order to align with the requirements in the FDR for similar non-prescription drugs in Canada and requirements for similar products in the U.S. As part of the Canada-United States-Mexico Agreement (CUSMA) negotiations, Canada committed to addressing this long-standing industry irritant to better align with their North American trading partners. Canada’s bilingual labelling requirements apply to manufacturers importing products into Canada. U.S. manufacturers cannot use a nearly identical label for an NHP intended to be marketed in Canada; Canadian labels will always be unique to accommodate both official languages.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan did not identify important environmental impacts and concluded that a detailed strategic environmental assessment is not required.

The additional environmental impact of this initiative over and above the normal labelling process is expected to be minimal. Though it is anticipated that a small number of products will require new or modified labelling configurations or resizing, it is not expected to have a significant additional impact on waste or greenhouse gas emissions. Further, a three-year delayed coming into force followed by a three-year transition period for already marketed products will provide companies with ample time to incorporate new labelling requirements without having to re-label or dispose of products currently on store shelves.

Gender-based analysis plus (GBA+)

These amendments are expected to protect the health and safety of all Canadians (rather than specific population sub-groups) who use, or are considering using NHPs, by ensuring important information on the label is displayed in a standardized, easy-to-read and understand format that supports their safe and effective use. However, there are certain gender and diversity considerations related to these new requirements. A review of literature indicated that there are three categories of consumers most likely to benefit from these new requirements:

In partnership with researchers at McGill University, Health Canada assessed the sex and gender considerations of these amendments by conducting a sex-and gender-based analysis of the April 2016 feedback received from over 2,500 Canadians through public opinion research. This analysis found that labels are one of the most common methods for both male and female frequent users to access critical information about an NHP. This includes safety information, intended uses, and dosage. Males who frequently use NHPs reported reading product labels more often than female frequent users; however, the overall reading of product labels for information did not differ greatly, and in some specific cases (e.g. for sunscreens, vitamins, and homeopathic products), female frequent users reported relying on product labels more often than male consumers. Improved NHP labelling should positively impact all Canadian consumers regardless of sex or gender, by helping them more easily access and understand the important safety and usage information on NHP labels.

Implementation, compliance and enforcement, and service standards

These amendments to the NHPR will come into force three years following registration, with the exception of those that clarify existing rules and those related to security packaging, which will come into force upon registration. Once in force, all new products (i.e. those not yet licensed) will have to comply with these amendments. All marketed NHPs (i.e. those which are licensed and labelled) at the time of the coming into force of these regulations will be provided an additional three-year period before their labels will have to comply with these requirements.

Guidance will be published alongside these amendments to provide greater detail on how to comply with the new labelling requirements.footnote 77 For submission-related processes, the Department will adhere to existing service standards as provided in its Natural Health Products Management of Applications Policy.footnote 78 Health Canada will revise the current Compendium of Monographs to make required warning statements more concise and understandable, after a review to verify which warning statements continue to be necessary

Compliance and enforcement

Compliance and enforcement of the regulations will be conducted in accordance with a risk-based approach and aligned with Departmental policies.

Contact

Bruno Rodrigue
Executive Director
Office of Legislative and Regulatory Modernization
Policy, Planning and International Affairs Directorate
Health Products and Food Branch
Health Canada
Holland Cross, Suite P2108, 11 Holland Avenue
Ottawa, Ontario
K1A 0K9
Mailstop: 3000A
E-mail: lrm.consultations-mlr@hc-sc.gc.ca