Guidance on evaluation fees for human drugs and disinfectants: Fee deferrals and remissions
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As of April 1, 2020, Health Canada no longer offers:
- deferrals to sponsors who have not completed their first calendar year of selling a drug
- remission fees based on individual product sales
The following information applies to sponsors who have applied for or been granted a fee deferral or remission before April 1, 2020. This is in accordance with the Regulations Amending and Repealing Certain Regulations Made under the Financial Administration Act.
Deferred payments
If a sponsor has not completed the first full fiscal year on the filing date of the drug submission or application, a 2-year deferral of payment is granted from that filing date. At the end of the 2-year period, the sponsor must pay all of the applicable fees.
To qualify for the deferral period, the individual responsible for the sponsor’s financial affairs must sign a statement. The statement must specify the start date of the sponsor’s fiscal year and accompany the drug submission or application at the time of filing.
Using the information available to Health Canada, if we determine that the statement submitted by the sponsor is inaccurate, we will notify the individual that the payment cannot be deferred. The full applicable fee must be paid at the time of filing.
Fee remissions
A sponsor who files a drug submission or application is eligible for a remission of fees when the fee is greater than 10% of the actual gross revenue from that drug in Canada during the fee verification period.
This period begins on the day the drug is first sold in Canada and ends 3 years after that day.
For an SNDS where no new DIN is issued (for example, for a new use), the fee verification period begins on the date that the NoC for the SNDS is issued. The exception is if the sponsor can prove that the sale of the drug with the new use started later.
Payment procedure
Health Canada will notify the sponsor in writing if the application for remission of fees has been accepted or rejected.
If the application for a fee remission is accepted, the fee for the review of a drug submission or application will be an amount equal to 10% of the anticipated gross revenue. While the remission processing fee must be included when the drug submission or application is filed, the review fee is not to be included at the time of filing. The review fee is payable when the sponsor receives the invoice.
If the application for a fee remission is rejected, the sponsor will receive an invoice for the full amount of the review fee.
Confirmation of the actual gross revenue following the fee verification period
Within 60 days of the end of the fee verification period, the sponsor must provide sales records covering sales of the drug in Canada during this period. The sales records must be prepared in accordance with generally accepted accounting principles. The person responsible for the sponsor’s financial affairs must certify them.
The sales records should include either:
- a sales report from an automated accounting system showing the financial period covered and the actual gross revenue in Canadian funds or
- a report from an auditor if no automated accounting system exists
If it’s determined at the end of the fee verification period that the amount paid by the sponsor was less than 10% of the actual gross revenue for that product, the sponsor must pay the lesser of either the:
- difference between 10% of the actual gross revenue and the amount originally paid or
- difference between the fee payable and the amount originally paid
Payment is due within 60 days after the day on which the fee verification period ended.
However, if it’s determined at the end of the fee verification period that the amount paid by the sponsor was more than 10% of the actual gross revenue for that product, the difference between the amount paid and 10% of the actual gross revenue will be credited to the sponsor.
With information available to us, if we determine that the sales records are not adequate to determine the sponsor’s actual gross revenues, we may require sales records that have been audited by a qualified independent auditor (for example, a chartered accountant).
The difference between the amount of the fee paid and the full applicable fee will be immediately payable if the sponsor does not provide Health Canada with either the:
- sales records within 60 days after the end of the verification period or
- audited sales records within 60 days of request