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Proposed fees for natural health products: Fees and fee policy

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Introduction

Fees are set based on corresponding regulatory costs incurred by Health Canada, in accordance with Treasury Board Secretariat's Guide to Cost Estimating. The portion of the costs recovered by fees (the fee-setting ratio) is determined by analyzing several factors, including the public-private benefit. The goal is to determine the degree to which an activity or service provides private benefit to industry versus the benefit received by the public. Multiple factors are considered, such as financial or competitive advantage, market access and innovation development in Canada, as well as the potential disincentives for regulatory compliance.

To ensure alignment across health products, Health Canada is proposing a fee structure for natural health products (NHPs) similar to that for human drugs and medical devices, as implemented April 1, 2020. The 3 categories are:

Fee details and mitigation and accountability measures (for example, fee remissions) are described in this section.

Small business mitigation

Health Canada is proposing small business fee reduction measures to minimize the impact of fees on small businesses. These are the same as those in place for drugs and medical devices. Applying the same practice to NHPs will help align cost-recovery principles and practices across health products.

To qualify as a small business, a company, including its affiliates, must either have fewer than 100 employees or between $30,000 and $5 million CAD in annual revenue. Qualifying businesses are eligible for the following fee remissions:

Mitigation for publicly funded health care institutions

As is the case for drugs and medical devices, fees for NHPs will not be applied to health care institutions that receive public funding. This applies to institutions that are licensed, approved or designated by a province or territory in accordance with its laws to provide care or treatment to persons or animals suffering from disease or illness. This provision also applies to branches or agencies of the federal, provincial or territorial government.

Performance accountability

It is important that Health Canada provides timely, efficient and effective service. This fee proposal outlines updated performance standards (timelines) for each type of regulatory activity for which a fee is charged. These performance standards will help keep us accountable. They include financial mechanisms (such as fee remissions) for when a performance target is missed.

The approach to NHP performance standards and remissions for missed standards is modelled on the structure in place for drugs and medical devices.

Health Canada will remit 25% of the fee paid if the published performance standard is not met. Note that we may use this provision in conjunction with our established approach for other health products, known as pause-the-clock. This would allow for the count (in days) of a performance standard to be paused under specified circumstances.

Pause-the-Clock allows for a performance standard to be paused if Health Canada is unable to process the file within the timeline due to circumstances beyond Health Canada's control. A company can request a pause-the-clock if it needs more time to respond with required information, such as when an information request notice (IRN) has been issued. (IRNs provide applicants the opportunity to address non-administrative deficiencies or information omissions, as per sections 15 and 37 of the NHPR.) Additional guidance will be published outlining the conditions and processes for the pause-the-clock mechanism.

Fees and performance standards

The NHP fee structure will consist of fees that fall under the 3 categories previously specified:

  1. Pre-market evaluation (EVAL)
    • A fee will be charged for applications for new NHP products or applications to amend existing products.
  2. Site licences (SL)
    • A fee will be charged to assess new NHP site licence applications or amendments to site licences.
    • An annual site licence fee will be charged to each facility that manufactures, imports, labels and/or packages NHPs to support site licence renewal and post-market compliance and enforcement activities. For sites conducting multiple regulated activities, one fee associated with the most expensive activity undertaken at that site will be charged.
  3. Right to sell (RTS)
    • An annual fee will be charged to allow companies the exclusive right to sell their NHPs in Canada.

Table 1 details each activity category for which fees are being proposed, along with corresponding performance standards (existing or proposed standards, whichever applies). For a summary of the costing methodology used to calculate the full costs used to establish these fees, refer to Annex B.

In some cases, a new performance standard is longer than the existing one. This reflects the reality of assessing increasingly complex applications within those categories of activities. Note that the processing or reviewing of applications and the associated performance standard will not begin until the fee has been paid and the screening is complete (where applicable). Non-payment of fees could lead to the withdrawal or withholding of the applicable product, site licence or update to an existing licence (in the case of an amendment request).

Table 1: Proposed NHP fees and performance standards (existing standards included where applicable)
Fee line/category Proposed fee amount (2025) ($ CAD) Existing performance standard (calendar days) Proposed performance standard (calendar days)
Pre-market evaluation (EVAL)
Class I application or amendment $1,124 60 60 to review application/amendment
Class II application or amendment $2,761 90 120 to review application/amendment
Class III application or amendment $7,209 210 210 to review application/amendment
Class III novel application $58,332 210 (if treated as a Class III) 300 to review application
Class III novel safety and efficacy amendment $23,333 210 (if treated as a Class III) 210 to review amendment
Class III novel quality amendment $8,750 210 (if treated as a Class III) 210 to review amendment
NHP site licences (SL)
SL applications or amendments $4,784 30 to 90 180 to review application/amendment
Annual SL - manufacturing - sterile dosage form $40,071 30 to 90 (for renewals) 90 to review licence renewal application or confirm licence information
Annual SL - manufacturing - non-sterile dosage form $23,071
Annual SL - importation $20,035
Annual SL - packaging $7,650
Annual SL - labelling $6,921
NHP right to sell (RTS)
NHP RTS (per NPN or DIN-HM) $542 N/A 60 to update licensed NHP database

Note: Unit costs were adjusted to cover the time between when the costing data was collected/calculated and when the fees will be implemented: 3.4% for 2021-22 and 2% for each of 2022-23, 2023-24 and 2024-25.

The proposed performance standards reflect the level of effort and time required to review and process. Each standard has a unique set of activities:

Performance, revenue and costs for each fee line will be reported in the annual Report on Fees. As is the current approach to fees for drugs and medical devices, fees for NHPs will be adjusted annually after implementation, according to the consumer price index (CPI) from the previous year, to factor in inflation. (Fees are rounded to the nearest dollar.)

Pre-market evaluation (EVAL) fees

To sell NHPs in Canada, a company must hold a valid product licence. Under this fee proposal, there will be 3 classes of NHPs in Canada for which product licences can be obtained. These classes are differentiated by their level of adherence to pre-cleared information (product monographs).

Fees for product evaluation allow for Health Canada to review product safety, efficacy, quality and specific conditions of use. We will charge the same fee for applications or amendments, as the level of effort to review these is comparable. We will not charge a fee for notifications, which are changes to NHPs that do not have a significant impact on the product's safety, efficacy and/or quality, as per section 12 of the NHPR).

As per the NHP Management of Applications Policy, classes of NHPs are as follows:

Health Canada is also proposing a new sub-category called Novel Class III, to ensure the Class III fee is not skewed by certain exceptional applications. The fee for this new category reflects the cost of reviewing products with novel active ingredients, a novel combination of active ingredients, a novel use or purpose, or a novel physical form. This means that some existing Class III products will be re-profiled into Novel Class III NHPs. However, we expect this new category to apply to just 1% of applications going forward.

Note: The cost of conducting risk management plan (RMP) reviews is not being factored into the proposed fees at this time. However, these costs may be included in the future, at least for the higher-risk Novel Class III category.

Site licence (SL) fees

Site licence application fees will be charged to review applications for new SLs. The same fee will be charged to review amendments to an existing SL as per section 32 of the NHPR, as the level of effort for us to review is the same.

We calculated SL application and amendment fees on a per site basis, rather than per application, as this is how fees will be charged upon implementation. We determined the unit cost for each new SL application or amendment application by dividing the fully loaded cost by the average number of sites listed on applications over the past 3 years. As the fee-setting ratio for SL is 100%, the unit cost is equivalent to the proposed fee. Refer to Annex B for more information.

We will be charging an annual fee to offset the costs of renewing SLs, as well as for compliance and enforcement activities such as inspecting facilities that manufacture, import, package or label NHPs. This fee will offset activities related to verifying that facilities (rather than products) meet regulatory requirements (for example, good manufacturing practices). The annual SL fee will be tiered based on the complexity of the activity or activities being undertaken at each facility. Although the 1- to 3-year licence renewal schedule under the NHPR is the same, we will be charging the annual SL fee every year.

Right to sell (RTS) fees

Industry will be required to pay an annual fee for the right to sell NHPs in Canada. The fee will offset costs incurred by Health Canada to conduct post-market surveillance and compliance and enforcement activities, which together ensure the safety of NHPs being sold in Canada.

Surveillance activities include:

Compliance and enforcement activities include compliance verifications to handle:

Summary of fees policy

Table 2 summarizes the fee policy according to its key elements.

Table 2: Breakdown of proposed fee policies for NHPs
Fee-setting ratios
(ratios that are applied to the full costs to determine what the fee should be)

Fee-setting ratios proposed for NHPs are the same as the established ratios for human drugs and medical devices:

  • 100% for SL fees
  • 75% for EVAL fees
  • 67% for RTS fees
Annual fee adjustments

Annual fee adjustments will be tied to the CPI of the previous year, rounded up to the nearest dollar.
Small business mitigation

Fee-reduction measures that have been established for cost recovery for drugs and medical devices will also be applied for NHPs. Companies must meet our small business definition (fewer than 100 employees or between $30,000 and $5 million in gross annual revenue, including affiliates).

Registered small businesses will be eligible for the following fee remissions:

  • 100% for first-ever NHP EVAL product submission
  • 50% for all subsequent EVAL submissions
  • 25% for SL and RTS fees
Performance standard

Each fee category has a corresponding performance standard, as per Table 1.
Penalty provision(through remission)

Applicants will receive a 25% fee remission when we are unable to meet a performance standard (note that the pause-the-clock mechanism may be applied).
Pre-market evaluation (EVAL) fees

The applicable Class I, II, III or III novel fee will be charged for:

  • a product licence application
  • an amendment of an application
Site licensing (SL) fees

There are 2 types:

  • fee per application for new SL application and amendment to an existing SL (per site)
  • annual fee per site listed on the SL (a tiered fee based on the complexity of regulated activities conducted at the site)
Right to sell (RTS) fees

Annual fee for each individual NPN or DIN-HM held by a company

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