Compliance and Enforcement Policy for Controlled Substances and Precursors (CS-POL-001)

Effective date: 2019/12/09

Disclaimer - This document does not constitute part of the Controlled Drugs and Substances Act (CDSA) or its applicable regulations. In the event of any inconsistency or conflict between the CDSA or its regulations and this document, the CDSA and its regulations take precedence. This document is an administrative document that is intended to facilitate compliance by regulated parties with the CDSA, its regulations and applicable administrative policies. This document is not intended to provide legal advice regarding the interpretation of the CDSA or its regulations. If a regulated party has questions about their legal obligations or responsibilities under the CDSA or regulations, they should seek the advice of legal counsel.

Table of Contents

1. Introduction

The Controlled Drugs and Substances Act (CDSA) and its associated regulations establish the framework to allow access to controlled substances and chemical precursors for lawful purposes, while minimizing the risk that they will be used for illegal purposes. This framework:

2. Purpose

The purpose of this document is to outline Health Canada's approach to the fair, consistent, uniform and predictable delivery of a national compliance and enforcement program pertaining to activities and substances governed by the CDSA and its associated regulations.

The policy also provides information regarding the roles and responsibilities of Health Canada and regulated parties, including but not limited to licensed and registered dealers, pharmacists, hospitals, health care practitioners and Section 56 exemptees.

3. Background

Health Canada's mandate is to help Canadians maintain and improve their health.

The CDSA provides for the control of substances and chemical precursors that can alter mental processes and that may produce harm to health and to society when diverted or misused. Except as authorized under its related regulations, or via an exemption issued under section 56 of the CDSA, most activities involving substances regulated under the CDSA, such as sell, import, export, production, etc., are prohibited.

The compliance and enforcement function protects Canadians' health through effective compliance and enforcement actions that minimize the risk of diversion of controlled substances and chemical precursors to illegal markets.

The following table shows the types of icons used in this document, and the way they are intended to be used.

Important: Key or cautionary information to know.

Information: Supplementary information like citations and legal references.

4. Scope

This policy applies to Health Canada compliance and enforcement activities conducted in relation to all substances and chemical precursors and regulated activities that are subject to the CDSA and its associated regulations including:

Controlled substances are regulated and grouped into Schedules I to VI to the CDSA. Schedules I to V list controlled substances, while Schedule VI lists chemical precursors, which can be used to produce controlled substances. Designated devices are listed in schedule IX to the CDSA.

When applicable, regulated parties are reminded that they must also meet the applicable requirements of the Food and Drugs Act (FDA) and it associated regulations.

The regulated products under the CDSA include:

Many substances are also captured under the CDSA and its schedules as analogues, derivatives, isomers and salts of listed substances.

The regulated activities under the CDSA include, but are not limited to:

Markets evolve based on needs and the regulatory scheme must adapt. The regulatory landscape is constantly changing to adapt to new sectors and products. As new controlled substances and chemical precursors become available and activities evolve, this policy will apply to the oversight of these products and activities.

5. Guiding principles

Health Canada administers the CDSA to ensure the safe and effective use of controlled substances and chemical precursors and to maintain them within the legal supply chain without impeding legitimate commercial, medical and scientific activities. The work of Health Canada also serves to advance the purpose of the CDSA, which is to protect the public and prevent diversion, including the conduct of an activity that would create a false or misleading impression in relation to controlled substances. Health Canada's Compliance and Enforcement Policy Framework identifies a number of principles that guide Health Canada in carrying out its compliance and enforcement activities. Health Canada emphasizes the following guiding principles in the administration of the CDSA.

5.1 Evidence-based

Health Canada's compliance and enforcement actions and decisions are based on the assessment of the risk to health for a specific situation. Evidence is assessed objectively for each situation and is based on the Health Canada Decision-Making Framework for Identifying, Assessing, and Managing Health Risks along with the scientific information and data available. Where scientific information and data are incomplete or inconclusive, the precautionary principle is taken. As new information or scientific data becomes available, the risk may change and require a different approach to compliance and enforcement.

5.2 Risk-based approach

The choice of a particular compliance and enforcement action is informed by a risk-based approach that encompasses identifying, assessing and managing health risks. Compliance and enforcement activities will be conducted; and will take into consideration the level of risk to public health, safety and security as well as the risks presented by the potential diversion of a controlled substance or chemical precursor to the illegal market and/or the likelihood thereof when addressing the identified risk.

When a regulated product or activity does not comply with the law, Health Canada makes an assessment to determine the most appropriate type of administrative action. This assessment takes into account the characteristics of the product or the activity that may pose a risk to the health of Canadians such as:

In determining the most appropriate type of intervention, Health Canada also considers factors related to the conduct of the regulated party and the need to maintain public confidence in the overall integrity of the regulatory regime including the public's perception of risk. For example, Health Canada will take into consideration:

Depending on the issue, additional factors may be taken into considerations such as the need to allow Canadians to have continued access to medically necessary products or other unique circumstances.

5.3 Fairness, consistency and impartiality

Health Canada works to administer the CDSA in a fair, consistent and impartial manner. Health Canada follows a national approach to compliance and enforcement, regardless of where or by whom the products are produced, distributed, advertised, sold, imported or exported. Health Canada applies the same approach to all regulated parties, activities, substances and sites.

To ensure consistency in the compliance and enforcement approach, Health Canada inspectors are trained on the relevant policies, guidelines and standard operating procedures. Qualified and authorized personnel are trained to carry out compliance and enforcement activities in a professional, objective and unprejudiced manner.

While Health Canada strives for consistency in decision-making, the context and the circumstances applicable to a particular situation require a more customized compliance and enforcement response to address issues of non-compliance and to hold a non-compliant party accountable. Health Canada will seek to foster national consistency in the methods and approaches used to ensure compliance with the regulations made under the CDSA.

Health Canada recognizes that some of its decisions may be disputed by regulated parties. The CDSA and its associated regulations provide the opportunity for the regulated party to be heard. In the interest of transparency and fairness, where appropriate, Health Canada will facilitate the resolution of contentious issues that may arise as a result its decisions. Health Canada will, however, ensure that such internal appeals do not compromise its compliance and enforcement activities.

5.4 Transparency

Health Canada strives to make information about compliance and enforcement activities public. By making policies and guidance documents public, information on the decision-making process is clear and understandable to everyone.

Health Canada will carry out compliance and enforcement activities, in an efficient manner using a fair and transparent approach that involves clear communication of responsibilities and authorities.

Health Canada provides access to information regarding compliance and enforcement actions while respecting privacy rights, where appropriate. Health Canada will comply with applicable constitutional law and information and privacy principles in accordance with the Canadian Charter of Rights and Freedoms, the Privacy Act the Access to Information Act and the Personal Information Protection and Electronic Documents Act. As a regulator, Health Canada plays an important role in protecting the health and safety of Canadians. Greater transparency and openness with Canadians strengthens the trust in our regulatory decisions.

Regulated parties can expect to see an increase in the type and scope of compliance and enforcement decisions made public. Aggregated statistics related to compliance and enforcement activities as well as information on high risk non-compliance issues may be made available to ultimately support Canadians in making better decisions about their health. This approach is consistent with the Government of Canada's Open Government commitment to make government decisions, data and information more accessible to everyone.

Information: All documents related to controlled substances and chemical precursors made available to the public by Health Canada are located on the Compliance and Monitoring of Controlled Substances Documents and Reports page.

6. Roles and responsibilities

Compliance and enforcement activities help safeguard the controlled substances and chemical precursors that Canadians access. As the regulator, the Office of Controlled Substances (OCS) in the Controlled Substances and Cannabis Branch (CSCB) and the Controlled Substances Program (CSP) in the Regulatory Operations and Enforcement Branch (ROEB) within Health Canada are jointly responsible for assessing, monitoring and promoting compliance with the regulations to the CDSA.

Regulated parties are responsible to ensure that they meet all applicable legislative and regulatory requirements.

6.1 Health Canada

Within Health Canada, the CSP and the OCS are jointly responsible for delivering a national compliance and enforcement program for substances listed in schedules I to VI and devices listed in schedule IX to the CDSA.

The OCS and the CSP are responsible for administering the legislation and regulations related to controlled substances and chemical precursors in order to minimize the risk of diversion of controlled substances and chemical precursors to illegal markets.

The OCS within the CSCB leads the development of policies and operations that govern regulated activities involving controlled substances and chemical precursors, including compliance and enforcement - in partnership with the CSP.

The CSP within the ROEB serves as the regional contact for compliance and enforcement activities conducted under the CDSA and its associated regulations. The CSP conducts inspections and other compliance activities with respect to the CDSA and its associated regulations.

Health Canada provides support to regulated parties and other stakeholders to become aware of their responsibilities with respect to the legislation and regulations governing controlled substances and chemical precursors in Canada, including the consequences associated with non-compliance.

Health Canada, where appropriate, communicates with regulated parties and fosters collaboration amongst other federal departments, provincial licensing authorities, and law enforcement for the purposes of minimizing the risk of diversion of controlled substances and chemical precursors to the illegal market.

Health Canada also participates in co-operative training initiatives and collaborative efforts involving other branches of Health Canada and federal departments including the Royal Canadian Mounted Police (RCMP) and Canada Border Services Agency (CBSA), and provincial licensing authorities.

Health Canada also works in collaboration with Canadian and international stakeholders in the public and private sectors to ensure that controlled substances and chemical precursors remain within legal distribution channels, while enabling legitimate industrial, medical, and scientific activities.

6.2 Regulated parties

Regulated parties that conduct regulated activities with controlled substances or chemical precursors have mandatory responsibilities under the CDSA. Any party conducting a regulated activity can be inspected.

The regulated party must be knowledgeable of all applicable regulations and understand the associated risk of diversion of the substances for which they are responsible. Regulated parties are required to establish and maintain appropriate internal controls and security measures in order to minimize the opportunity for diversion of the controlled substances or chemical precursors to an illegal market or use. It is also the responsibility of the regulated party to take the necessary steps to secure controlled substances or chemical precursors during transportation. In addition, the regulated party must know their clients and have systems in place to identify suspicious transactions.

During an inspection, a regulated party is required to provide all reasonable assistance and information necessary for the inspector to perform their duties. An inspector may request that a regulated party provides evidence that its facility, equipment, practices and procedures meet the applicable regulatory requirements. Obstructing or hindering an inspector who is carrying out their duties or functions is an offence under the CDSA.

Regulated parties are expected to:

Practitioners and pharmacists must adhere to the professional standards and obligations mandated by their respective licensing authority at the provincial/territorial level. In addition, practitioners, hospitals and pharmacists must also comply with the applicable requirements of the regulations.

Practitioners and pharmacists are responsible for all controlled substances they administer, sell or prescribe to patients. Practitioners and pharmacists must ensure that the controlled substances they buy, use, or sell are authorized for sale in Canada and that they have reasonable measures in place to minimize the risk of diversion of these products.

Regulated parties must also be aware of any communication from Health Canada regarding actions or measures to be taken under the CDSA and its associated regulations.

Regulated parties who fail to comply will be subject to compliance and enforcement actions.

7. Compliance and enforcement actions

Health Canada manages the risk posed to public health and safety by controlled substances and chemical precursors through various types of compliance and enforcement activities.

In order to verify compliance or prevent non-compliance, an inspector may enter any place, including a conveyance, to conduct compliance and enforcement actions. However, the inspector may only enter and inspect premises if they believe on reasonable grounds that the premises contain a controlled substance, chemical precursor, designated device or document relevant to the legislation, or that the premises are conducting an activity to which the provisions of the legislation apply.

Information: Inspectors' powers are described under section 31 of the CDSA. Subsection 31(1.1) states that "The inspector may only enter a place in which they believe on reasonable grounds

  1. a controlled substance, precursor, designated device or document relating to the administration of this CDSA or the regulations is located;
  2. an activity could be conducted under a licence, permit, authorization or exemption that is under consideration by the Minister;
  3. an activity to which the provisions of this CDSA or the regulations apply is being conducted; or
  4. an activity was being conducted under a licence, permit, authorization or exemption before the expiry or revocation of the licence, permit, authorization or exemption, in which case the inspector may enter the place only within 45 days after the day on which it expired or was revoked."

Health Canada chooses the compliance and enforcement actions and tools that are most appropriate for the situation, based on a number of factors. Some activities are designed to support voluntary compliance by helping regulated parties understand their responsibilities under the CDSA and its associated regulations. Others are designed to induce or compel compliance.

Health Canada's Compliance and Enforcement Policy Framework provides an illustration of the different levels of compliance and enforcement actions and shows how the different types of actions and tools can be used.

Informed by the assessment of available evidence and risks pertaining to the situation of non-compliance, the inspector will decide to use these actions and tools individually or together. The inspector will also decide if the seriousness of the non-compliance and the risk posed to the health and safety of Canadians warrants an immediate strong and unequivocal response such as a seizure, a licence suspension or a prosecution. In other circumstances, a compliance and enforcement response proportionate to the identified risk will provide the regulated party with an opportunity to come into compliance. When the risk changes or considerations related to risk management evolve, Health Canada will adapt the type of enforcement response and the type of actions to the situation. If the situation of non-compliance persists, additional actions will be taken and will graduate towards stronger compliance and enforcement actions. Health Canada recognizes that some of its decisions may be disputed by regulated parties. The CDSA and its associated regulations provide the opportunity for the regulated party to be heard.

The compliance and enforcement activities include:

7.1 Compliance promotion

Health Canada strives to support regulated parties in actively preventing compliance issues from occurring in the first place. Compliance is facilitated when legislative and regulatory requirements are understood and accessible to regulated parties. Health Canada develops and publishes policies, guidance documents and circular letters to promote a common understanding among regulated parties of all requirements and to ensure that regulated parties understand Health Canada's interpretation of the legislation, the processes to be followed and the scientific standards or principles that will be applied.

Information: All documents related to controlled substances and chemical precursors made available to the public by Health Canada are located on the Compliance and Monitoring of Controlled Substances Documents and Reports page.

Health Canada encourages and promotes compliance through educational activities and the sharing of information on regulatory matters. Staff in the OCS and CSP work with partners within Health Canada and external partners, including the RCMP, local police forces, CBSA and provincial/territorial licensing authorities, through co-operative training initiatives and other collaborative efforts aimed at clarifying applicable regulatory requirements.

7.2 Compliance monitoring

Health Canada carries out compliance monitoring to verify the extent to which regulated parties are carrying out activities in accordance with the regulations made under the CDSA. Compliance monitoring also includes the analysis of information that must be maintained by the regulated party and submitted in response to a request from Health Canada, as set out in the regulations under the CDSA. In order to demonstrate their compliance with regulatory requirements, regulated parties submit, as applicable:

The frequency, intensity and nature of compliance monitoring activities may vary according to the risks identified. Health Canada uses the information gathered through compliance monitoring to determine if further regulatory action is required.

7.3 Compliance verification

Health Canada will take steps to review information received from internal or external sources and determine if a situation of non-compliance has occurred by initiating compliance verification.

For example, compliance verifications may be initiated in response to:

The receipt of any such information will trigger an initial assessment to identify any health, safety or security risks, or risk of diversion of controlled substances and chemical precursors from the legal supply chain.

7.4 Inspections

Inspections are conducted with the predominant purpose of verifying and achieving compliance with legislation administered and/or enforced by Health Canada.

While conducting inspections, inspectors may exercise authorities provided to them within the legislation under which they are designated.

Inspections may involve visually examining facilities, inventories and equipment, obtaining and reviewing copies of documents and records, collecting samples for analysis and taking photographs or recordings. The regulated party must provide the inspector with all reasonable assistance during the inspection and provide any information the inspector may reasonably require.

Inspectors must verify that regulatory requirements are met in order to determine whether the regulated party is in compliance and take the appropriate steps to manage the non-compliance if legislative requirements are not met. Instances of non-compliance identified during an inspection are responded to with appropriate compliance and enforcement actions.

To inspect a private dwelling, inspectors must obtain the consent of the occupant or present a warrant prepared by a justice of the peace.

8. Responses to non-compliance

Health Canada will evaluate instances of non-compliance to determine the most suitable compliance and enforcement action that will permit the regulated party to meet their legislative and regulatory requirements.

Where non-compliance is brought to the attention of a regulated party, it is the regulated party's responsibility to take timely and appropriate action to comply with legislative and regulatory requirements. Health Canada will clarify what is necessary to achieve compliance, but will not dictate how compliance is to be achieved. Preferably, compliance can be achieved through a cooperative approach between the regulated party and Health Canada. However, in some situations, most notably when the regulated party fails to correct situations of non-compliance, a number of enforcement actions may be taken by Health Canada. The role of Health Canada is to help ensure that the regulated party complies with the timelines of the regulatory decisions.

The primary objective of the response strategy is to manage the risk to Canadians and use the most appropriate level of intervention to help ensure that the responsible regulated party brings the product or activity into compliance. To this end, Health Canada evaluates instances of non-compliance to determine the most appropriate action(s) to be taken. Such actions may be undertaken independently, concurrently or sequentially with other actions, if the circumstances warrant it.

The evaluation of non-compliance considers the various circumstances of each case and takes into account any combination of the following factors, or other relevant factors:

8.1 Compliance actions led by the regulated party

A number of compliance activities may be considered when it is believed that the risks associated with the non-compliance may be appropriately managed without recourse to enforcement activities.

Where Health Canada informs a regulated party of an instance of non-compliance and the regulated party is willing to comply, Health Canada may establish an appropriate timeframe in which the regulated party must achieve compliance.

One or more of the following compliance actions may be considered, if appropriate, in order to remedy regulatory violations. The number and type of actions taken depends in part on the severity and extent of the non-compliance. The following options do not represent consecutive steps to be taken to address non-compliance and the list is not exhaustive.

8.1.1 Corrective Action Plan

A corrective action plan may be prepared by a regulated party in response to observations of non-compliance communicated to them by Health Canada. A corrective action plan states the actions the regulatory party will undertake in order to meet the requirements of the applicable regulations, lays out the methods to be used, and the timeline in which the actions will be completed.

8.1.2 Voluntary Disposition

Voluntary disposition is an action by a regulated party to prevent further distribution of a non-compliant product, by actions such as disposal and destruction.

8.1.3 Voluntary Detention

A voluntary detention is an agreement between a regulated party and Health Canada to maintain control of a particular substance. While the CDSA provides authority for product seizure or detention, a voluntary detention under the custody of the regulated party may be appropriate if Health Canada is confident that the company will comply with the conditions of the agreement.

Health Canada will monitor the effectiveness of a detention and may take other enforcement actions as appropriate, such as seizure.

8.1.4 Voluntary Forfeiture

Voluntary forfeiture is an agreement between Health Canada and the regulated party for the latter to surrender control of the product to the Crown.

8.1.5 Voluntary Stop Sale

The prevention of the sale and distribution of a product at any level in the distribution chain with the consent of the regulated party is considered a voluntary stop sale.

8.1.6 Voluntary Recall

A recall is a method for removing a distributed product from the supply chain. The regulated party is required to establish a system of control, which permits the rapid and complete recall of every lot or batch of a controlled substance or chemical precursor. Recalls may be undertaken anytime, in response to a formal request by Health Canada or on the initiative of the regulated party to carry out the combined responsibility of ensuring compliance with the legislation. The regulated party's recall does not preclude other actions which could be taken by Health Canada or the regulated party.

8.2 Health Canada led compliance and enforcement actions

Where the regulated party fails to take corrective actions or is unable to meet legislative or regulatory requirements, a number of regulatory tools are available to Health Canada in order to achieve compliance by regulated parties. Regulated parties who are subject to a regulatory action or a decision will be provided with a reasonable opportunity to be heard as prescribed by the CDSA.

Based on the severity of the risk posed by regulatory non-compliance, Health Canada determines the most appropriate level of intervention. In alignment with the Health Canada's Compliance and Enforcement Policy Framework and informed by the specifics of each case, Health Canada will choose the most appropriate tool to achieve compliance and mitigate any risks to health. One or a combination of the actions below may be considered.

8.2.1 Regulatory Letter

Health Canada may issue a warning letter to any party when it is believed that non-compliance has occurred, or is ongoing, but may not warrant an immediate and stronger enforcement action. In assessing the appropriateness of a warning letter, Health Canada will consider, among other factors, the compliance history of the regulated party and its efforts to achieve compliance when using this action. Where a warning is ignored or disregarded, Health Canada may escalate its enforcement activities or make a referral to appropriate authorities.

8.2.2 Recall

The Food and Drug Act (FDA) allows Health Canada to take quick and appropriate action when a serious or imminent risk of injury to health is identified. A mandatory product recall for therapeutic products containing controlled substances or a chemical precursor can be ordered to remove a non-compliant product from the supply chain.

8.2.3 Seizures

Administrative seizures or detentions are an immediate and effective enforcement tool for addressing non-compliance. Health Canada may take control of non-compliant articles, such as products or equipment, under the authority for administrative seizure and detention provided in the CDSA. When determining whether to implement such an action, Health Canada will consider, among other things, the risk to public health, safety, or security, as well as the reliability, level of cooperation and compliance history of the regulated party.

8.2.4 Refusal, Suspension, or Revocation

When a regulated party is not in compliance with regulatory requirements made under the CDSA or its associated regulations, Health Canada may refuse to issue, renew or, amend a regulated party's licence, or Health Canada may suspend or revoke a regulated party's Dealer's Licence, registration, registration number, import or export permits, or exemptions that allow them to conduct activities with substances controlled under schedules I to VI and devices listed under schedule IX to the CDSA.

8.2.5 Notification

A notice may be issued by Health Canada to licensed dealers, pharmacies, and professional licensing bodies within relevant provinces or territories, not to sell or provide a controlled substance to a pharmacist named in the notice or fill a prescription or order for a controlled substance from a practitioner named in the notice of restriction.

8.2.6 Prosecution

A prosecution is a legal proceeding in which the courts determine whether non-compliance contravenes the applicable legislation and, if so, the appropriate penalty. Health Canada may consider recommending prosecution in response to a violation of the regulations that:

Prosecutions may be undertaken in conjunction with other enforcement actions, such as seizures, recalls, or public announcements, if the circumstances warrant it.

Important: Investigation by law enforcement agencies and prosecution under the CDSA may also occur independently of any other compliance actions taken by Health Canada.

Appendices

Appendix A - Glossary

For the purposes of this policy, terms will be understood to have the same meaning as those provided in the CDSA or its associated regulations.

Acronyms

BOTSR
Benzodiazepines and Other Targeted Substances Regulations
CDSA
Controlled Drugs and Substances Act
CDSS
Canadian Drugs and Substances Strategy
CSP
Controlled Substances Program
CSCB
Controlled Substances and Cannabis Branch
FDA
Food and Drugs Act
FDR
Food and Drug Regulations
NCR
Narcotic Control Regulations
OCS
Office of Controlled Substances
PCR
Precursor Control Regulations
ROEB
Regulatory Operations and Enforcement Branch
SOP
Standard Operating Procedure

Terms

Important: These definitions explain how terms are used in this document. If there is any conflict with a definition in the CDSA or its associated regulations, the definition in the CDSA or regulations prevails.

Compliance
The state or act of conformity with legislative and regulatory requirements as carried out by regulated parties (including a corporation, institution, individual or other regulated entity).
Compliance Actions
Those actions authorized by the CDSA and its associated regulations aimed at bringing the relevant party into compliance with the regulations.
Compliance Management
Compliance management includes compliance promotion, compliance monitoring, compliance verifications or other compliance activities including fact gathering and assessments conducted during inspections.
Compliance Verification
Actions taken to verify compliance in response to a complaint or a reported situation, or a known or suspected non-compliance, with the applicable requirements of the CDSA and its associated regulations. This includes actions such as information gathering off-site, or on-site and virtual visits.
Designated device
A device included in Schedule IX, including manual, semi-automatic or fully automatic device that may be used to compact or mould powdered, granular or semi-solid material to produce coherent solid tablets and to fill capsules with any powdered, granular, semi-solid or liquid material.
Enforcement Actions
Actions taken to address non-compliance, such as issuance of warning letters, seizure and detention, suspension, revocation, and cancellation, or refusal of a licence or permit.
Inspection
Fact gathering and assessment regarding compliance with the regulations made under the CDSA.
Inspector
Any person designated as an inspector under subsection 30(1) of the CDSA, for the purpose of the administration and enforcement of the CDSA and regulations.
Regulated Party
Those who are licensed, authorized, or otherwise subject to the CDSA or regulations.

Appendix B - References

Laws and regulations

Other related documents

Websites

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