Order Amending the Fees in Respect of Drugs and Medical Devices Order (COVID-19 Medical Devices): SOR/2023-21
Canada Gazette, Part II, Volume 157, Number 4
Registration
SOR/2023-21 February 6, 2023
FOOD AND DRUGS ACT
Whereas, under section 30.62footnote a of the Food and Drugs Act footnote b, the Minister of Health has consulted with any persons that the Minister considers to be interested in the matter;
Therefore, the Minister of Health makes the annexed Order Amending the Fees in Respect of Drugs and Medical Devices Order (COVID-19 Medical Devices), under subsections 30.61(1)footnote a and 30.63(1)footnote a of the Food and Drugs Act footnote b.
Ottawa, February 6, 2023
Jean-Yves Duclos
Minister of Health
Order Amending the Fees in Respect of Drugs and Medical Devices Order (COVID-19 Medical Devices)
Amendments
1 The definition performance standard in subsection 1(1) of the Fees in Respect of Drugs and Medical Devices Order footnote 1 is replaced by the following:
- performance standard
- means the document entitled Performance Standards for the Fees in Respect of Drugs and Medical Devices Order, published by the Government of Canada on its website, dated November 1, 2022. (norme de rendement)
2 Subsection 2(1) of the Order is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):
- (e) the examination of an application to amend an authorization in respect of a Class II, III or IV COVID-19 medical device that is not a UPHN medical device or the right to sell such a device under the Medical Devices Regulations.
3 The portion of subsection 6(1) of the French version of the Order before paragraph (a) is replaced by the following:
Remise — norme de rendement
6 (1) Lorsque le ministre conclut que la norme de rendement n’a pas été respectée à l’égard d’un prix à payer visé au présent arrêté, remise est accordée à la personne devant s’acquitter du paiement du prix à payer :
4 Section 59 of the Order and the headings before it are replaced by the following:
PART 3
Medical Devices
DIVISION 1
Fees for Examination of an Application for a Licence, an Amendment Application for a Licence or an Application to Amend an Authorization — Medical Device
Interpretation
Definitions
59 The following definitions apply in this Division.
- authorization
- means an authorization for a COVID-19 medical device referred to in section 68.12 of the Medical Devices Regulations, if the device:
- (a) is a Class II, III or IV device; and
- (b) is not a UPHN medical device. (autorisation)
- licence
- means a medical device licence issued under paragraph 36(1)(a) of the Medical Devices Regulations. (homologation)
5 The portion of subsection 60(1) of the Order before paragraph (a) is replaced by the following:
Fee for examination
60 (1) Subject to paragraph 62(b) and section 64, the fee for the examination of an application for a licence that is filed under section 32 of the Medical Devices Regulations, an application for a licence amendment that is filed under section 34 or an application to amend an authorization filed under section 68.14 of those Regulations is, in respect of the applicable category set out in column 1 of Schedule 8 and described in column 2, as follows:
6 The headings before section 76 and sections 76 and 77 of the Order are replaced by the following:
DIVISION 3
Fees for Right to Sell Licensed or Authorized Class II, III or IV Medical Devices
Interpretation
Definitions
76 The following definitions apply in this Division.
- authorization
- means an authorization for a COVID-19 medical device referred to in section 68.12 of the Medical Devices Regulations, if the device:
- (a) is a Class II, III or IV device; and
- (b) is not a UPHN medical device. (autorisation)
- licence
- means a medical device licence issued under paragraph 36(1)(a) of the Medical Devices Regulations. (homologation)
Annual fee
77 (1) The annual fee that is payable for the right to sell a licensed Class II, III or IV medical device or an authorized Class II, III or IV COVID-19 medical device that is not a UPHN medical device is $381.
Fee payable by holder
(2) The fee is payable either by the person that holds the licence for the Class II, III or IV medical device, if the licence is not suspended under section 40 or 41 of the Medical Devices Regulations, or by the person that holds the authorization.
7 The portion of section 79 of the Order before paragraph (a) is replaced by the following:
Remission — small business
79 Subject to section 80, remission is granted to the person referred to in subsection 77(2) of an amount equal to 25% of the fee that is payable under subsection 77(1) if the person provides the Minister with the statement provided under subsection 43(1) or section 68.24 of the Medical Devices Regulations, in a form established by the Minister,
8 The heading of Schedule 8 to the Order is replaced by the following:
Fees for Examination of an Application for a Licence, an Amendment Application for a Licence or an Application to Amend an Authorization — Medical Device
| Item |
Column 1 Category |
Column 2 Description |
|---|---|---|
2 |
Applications for Class II licence amendment or applications to amend Class II authorization |
Applications for amendment of Class II medical device licence, applications to amend authorization filed under section 68.14 of the Medical Devices Regulations for a Class II COVID-19 medical device that is not a UPHN medical device, other than applications referred to in item 10. |
| Item |
Column 1 Category |
Column 2 Description |
|---|---|---|
5 |
Applications for Class III licence amendment or applications |
Applications for amendment of Class III medical device licence or applications to amend authorization filed under section 68.14 of the Medical Devices Regulations for a |
6 |
Applications for Class III licence amendment or applications to amend Class III authorization — significant changes not related to manufacturing |
Applications for amendment of Class III medical device licence or applications to amend authorization filed under section 68.14 of the Medical Devices Regulations for a |
| Item |
Column 1 Category |
Column 2 Description |
|---|---|---|
8 |
Applications for Class IV licence amendment or applications to amend Class IV authorization — changes in manufacturing |
Applications for amendment of Class IV medical device licence or applications to amend authorization filed under section 68.14 of the Medical Devices Regulations for a Class IV COVID-19 medical device that is not a UPHN medical device — changes referred to in paragraph 34(a) or 68.13(a) of the Medical Devices Regulations that relate to manufacturing |
9 |
Applications for Class IV licence amendment or applications to amend Class IV authorization — significant changes not related to manufacturing |
Applications for amendment of Class IV medical device licence or applications to amend authorization filed under section 68.14 of the Medical Devices Regulations for Class IV COVID-19 medical device that is not a UPHN medical device — any other changes referred to in paragraph 34(a) or (b) or 68.13(a) or (b) of the Medical Devices Regulations |
10 |
Applications for Class II, III or Class IV licence, applications to amend such a licence or applications to amend Class II, III or Class IV authorization — private label medical device |
Applications for Class II, III or IV medical device licence, applications to amend Class II, III or IV licence or applications to amend authorization filed under section 68.14 of the Medical Devices Regulations for a Class II, III or Class IV COVID-19 medical device that is not a UPHN medical device — private label medical device |
Coming into Force
10 This Order comes into force on the day on which the Regulations Amending the Medical Devices Regulations (Interim Order No. 3 Respecting the Importation and Sale of Medical Devices for Use in Relation to COVID-19) come into force but, if it is registered after that day, it comes into force on the day on which it is registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
Issues
In general, Health Canada charges fees for regulatory activities related to medical devices (e.g., the examination of licence submissions, amendment submissions and the right to sell a medical device) as outlined in the Fees in Respect of Drugs and Medical Devices Order (Fees Order). In light of the COVID-19 public health emergency, devices that were authorized under the three medical devices interim orders were not subject to fees. The Fees Order will now be amended to include fees for COVID-19 medical devices related to the Regulations Amending the Medical Devices Regulations (Interim Order No. 3 Respecting the Importation and Sale of Medical Devices for Use in Relation to COVID-19) (Part 1.1 of the Medical Devices Regulations (MDR)). In particular, fees will be applicable when a COVID-19 medical device is no longer on the List of Medical Devices for an Urgent Public Health Need in Relation to COVID-19 (UPHN list) under the MDR, and therefore no longer is an urgent public health need medical device.
Background
From the outset, the COVID-19 pandemic created challenges in global supply chains including an unprecedented demand for certain medical devices.
The Government of Canada took action to provide a faster way to authorize the importation and sale in Canada of medical devices that are used to diagnose, treat, mitigate or prevent COVID-19. Since March 2020, the Government of Canada made three consecutive interim orders respecting the importation and sale of medical devices for use in relation to COVID-19. Interim orders are emergency measures and are intended to be temporary. The third, and latest, interim order (Interim Order No. 3 Respecting the Importation and Sale of Medical Devices for Use in Relation to COVID-19) maintains many of the flexibilities of the first and second interim orders, including the consideration of urgent public health need. It is set to expire on February 21, 2023.
Through the interim orders, Health Canada has authorized over 800 COVID-19 medical devices including diagnostic test kits (e.g., rapid test kits and serological test kits) and other important non-testing medical devices (e.g., personal protective equipment, syringes and ventilators). Authorizations have been issued to a mix of domestic and international manufacturers. These emergency measures have allowed Canadians to have expedited access to safe and effective COVID-19 medical devices.
To encourage manufacturers of COVID-19 medical devices to enter the Canadian market by filing applications under the interim orders, the review of the applications was not subject to fees. Under the existing medical devices regulatory framework, Part 1 of the MDR, Class I medical device manufacturers are required to obtain a medical device establishment licence (MDEL) if they do not import or sell solely through an existing MDEL holder. Class II to IV medical device manufacturers are required to seek a medical device licence. These Class I to IV requirements were waived under the interim orders and associated fees normally recovered as per the Fees Order were not charged to authorization holders.
Amendments to the MDR to create a new Part 1.1 will introduce a permanent regulatory framework for COVID-19 medical devices. Part 1.1 will:
- enable manufacturers, importers and distributors to continue to import or sell COVID-19 medical devices that were authorized under the third interim order and provide a permanent regulatory framework for these devices;
- maintain the regulatory flexibilities set out under the third interim order for COVID-19 authorizations while there is an urgent public health need for the devices;
- enable new authorizations for COVID-19 medical devices and expanded use indications to be issued when there is an urgent public health need;
- continue many of the regulatory obligations and other requirements originally set out in the third interim order after the interim order expires, as well as existing applications in queue; and
- introduce additional requirements for long-term oversight of the authorized devices that are in line with requirements other medical devices are subject to in the MDR, once a COVID-19 medical device no longer meets an urgent public health need.
Objective
The objective of these amendments to the Fees Order is to ensure that once a Class II to IV COVID-19 medical device is no longer on the UPHN list under Part 1.1 of the MDR, the authorization holder for the device will be charged:
- fees for the examination of applications to amend an authorization; and
- annual right to sell fee.
Description
Under Part 1.1 of the MDR, once a COVID-19 medical device is no longer on the UPHN list, specific portions of the Fees Order will apply.
All new applications for COVID-19 medical devices that are eligible for authorization through the permanent COVID-19 pathway under Part 1.1 will continue to not be subject to fees.
Class I COVID-19 medical device
Manufacturers of Class I COVID-19 medical devices that hold an authorization under Part 1.1 of the MDR will continue to be exempt from the requirement to hold an MDEL and paying associated fees until the medical device is no longer on the UPHN list. At that point, the manufacturers who decide to continue to market their medical devices will then be subject to Part 1 of the MDR and MDEL requirements will apply, including any associated fees. To achieve this, no amendments were required to the Fees Order for Class I COVID-19 medical devices.
Class II to IV COVID-19 medical device
Manufacturers of Class II to IV COVID-19 medical devices that hold an authorization under Part 1.1 of the MDR will not be subject to fees as long as the COVID-19 medical device remains on the UPHN list.
Authorization holders for Class II to IV COVID-19 medical devices that are no longer on the UPHN list will be required to pay amendment examination fees if they file an amendment to their COVID-19 medical device authorization under Part 1.1 of the MDR.
Should the authorization holder choose to maintain their authorization under Part 1.1 of the MDR once their medical device is no longer on the UPHN list, a right to sell fee will be charged. This is an annual fee initiated by the annual renewal requirements in Part 1.1 of the MDR, which are due to the Department on November 1st. Through the annual renewal process, the authorization holder must confirm that the information and documents submitted with their authorization application and any subsequent amendments are still correct, or to describe any changes to the information and documents to maintain their authorization. Following the receipt of the annual statement, the authorization holder will be issued an invoice for payment by December 20th of that same year, as per the current Fees Order.
In the scenario that a Class II to IV COVID-19 medical device or category of medical device is added back on the UPHN list after the manufacturer started paying fees, future fees will not apply while the medical device is on the UPHN list.
Some manufacturers may be eligible for existing small business fee mitigation, with a 25% reduction for all annual right to sell fees and a 50% reduction in all examination fees for amendments. Existing penalties and performance standards for medical device applications will apply as per the Fees Order.
Coming into Force
These amendments to the Fees Order will come into force on the day the amendments to the MDR (Regulations Amending the Medical Devices Regulations (Interim Order No. 3 Respecting the Importation and Sale of Medical Devices for Use in Relation to COVID-19)) come into force. This will be the day after the day on which the third interim order ceases to have effect.
Regulatory development
Consultation
On May 2, 2022, Health Canada posted a Notice of Intent on the proposed regulatory amendments to the MDR to continue the sale and importation of COVID-19 medical devices for public consultation.
The Notice of Intent intended to seek stakeholder feedback on the associated amendments to the MDR, including the fees policy, to continue the importation and sale of COVID-19 medical devices after the third interim order expires. The consultation was open for a 21-day period, ending May 22, 2022.
Health Canada sought comments from medical device stakeholders, MDEL holders and authorization holders under the third interim order and received six stakeholder responses following the publication of the notice.
Half of the responses received related to the scope of the amendments. The other half of the feedback pertained to input beyond the scope of the amendments that related to specific individual interim order applications as well as a general question about the interim order. Regarding the feedback received about the scope of the amendments, stakeholders primarily sought clarifications (e.g., implementation details related to the proposed annual authorization requirements and process related to amendment applications and QMS certificates) but no concerns were raised.
Health Canada also consulted with Medtech Canada, a key medical device stakeholder association. Overall, the proposed regulatory amendments were well received and supported. As well, Health Canada informed provincial and territorial partners through the Public Health Agency of Canada (PHAC) Logistics Advisory Committee about the updated approach. No concerns were raised and there were no comments on the fee proposal for the regulatory package.
Modern treaty obligations and Indigenous engagement and consultation
As required by the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an assessment of modern treaty implications was conducted on the proposal. The assessment did not identify any modern treaty implications or obligations.
Instrument choice
It is necessary to maintain an alignment between the different types of fees being charged in respect of a medical device licence, an establishment licence and an authorization for a COVID-19 medical device. Amendments to the Fees Order represents the only instrument for achieving this objective and ensuring that fees would be charged for a COVID-19 medical device that is not an urgent public health need medical device.
Regulatory analysis
Benefits and costs
As the demand for the number and types of COVID-19 medical devices begins to return to pre-pandemic levels and global supply chains begin to stabilize, the need to incentivize manufacturers and importers has decreased. The expiration of Interim Order No. 3 Respecting the Importation and Sale of Medical Devices for Use in Relation to COVID-19 would immediately require all products given an authorization to either withdraw from the market or come into full compliance with the requirements of Part 1 of the MDR and pay fees in accordance with the relevant Fees Order. Amendments to the MDR to create a new Part 1.1 will maintain many flexibilities from the third interim order and prevent a hard end to those flexibilities, thus providing some benefit to manufacturers and accessibility to Canadians while a COVID-19 medical device remains on the UPHN list.
Savings to industry of fees are balanced as equivalent costs to Canadian taxpayers creating a net $0 present value.
Small business lens
No disproportionate impacts on small businesses are expected.
The charging of fees may cause some manufacturers to exit the market, but the return to a more normal (pre-pandemic) demand for medical devices will be the principal reason for withdrawal from the market.
Class II to IV COVID-19 Medical Devices
Some manufacturers may be eligible for existing small business fee mitigation, with a 25% reduction for all annual right to sell fees and a 50% reduction in all evaluation fees for amendments. Existing penalties and performance standards for medical device applications will apply as per the Fees Order.
One-for-one rule
The one-for-one rule does not apply because these amendments will not cause administrative burden to any stakeholders.
Regulatory cooperation and alignment
These amendments to the Fees Order are not related to a work plan or commitment under a formal regulatory cooperation forum.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus impacts have been identified for this proposal.
Implementation and service standards
Forms and webpages will be updated to reflect the revisions to the Fees Order. Existing performance standards, as per the Performance Standards for the Fees in Respect of Drugs and Medical Devices Order will continue to be applicable, and the document will be updated to include the new regulatory pathways.
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
Address locator: 3000A
Email: lrm.consultations-mlr@hc-sc.gc.ca