2019-2020 Compliance Monitoring Project: Terms and conditions on drug establishment licences

Health Canada actively monitors the compliance of regulated parties and health products in Canada. We do this in different ways, including through compliance monitoring projects.

We conducted such a project in 2019 and 2020 to verify whether companies were complying with:

the regulatory conditions of their drug establishment licences (DELs)
the cease importation notices we issued between September 2017 and September 2019

Why we did this project

All Canadian companies involved in the drug manufacturing industry must hold a DEL to fabricate, package/label, test, import, distribute or wholesale a human drug. They must also follow good manufacturing practices (GMPs), which are set out in Part C, Division 2 of the Food and Drug Regulations (regulations). This ensures that all safety and quality standards are met before a drug is sold in Canada.

According to the regulations, Health Canada may add or amend terms and conditions (T&Cs) on the DEL of a company when Health Canada determines that restrictions are necessary to:

ensure that drugs are safe for use
prevent injury to health

Health Canada may also issue a notice to prohibit a drug from being imported from a foreign building if the building does not comply with GMP requirements.

We did this compliance monitoring project to help:

improve the process of adding T&Cs on DEL holders
identify areas where we can improve the overall compliance of companies

What we did

Health Canada visited 9 companies in British Columbia, Ontario and Quebec. For each visit, we verified that the companies complied with the T&Cs on their DEL and/or with any cease importation notices. After each visit, we gave them a summary of our findings.

We chose companies based on the:

presence of complex or high-risk T&Cs or conditions in the cease importation notice
risk associated with the activity conducted by the company

Note: The T&Cs on a company’s DEL may have changed since the project was conducted.

**Table 1: Examples of what we verified during a site visit**
Regulatory conditions	Examples of what we verified
Terms and conditions	Whether companies: tested certain products to confirm they complied to their specifications only imported products from a specific foreign building tested certain products for specific impurities of concern to confirm they were within acceptable limits only conducted certain licensable activities notified Health Canada before conducting certain activities had a third-party overseeing activities
Cease importation	Whether companies: imported from foreign buildings considered non-compliant with GMP requirements following a notice from Health Canada

What we found

Health Canada found that most establishments needed to improve their practices to comply with the T&Cs added on their DEL.

We found serious compliance issues at 3 companies, such as:

not testing certain products for specific impurities to confirm they were within acceptable limits
importing products from a foreign building not listed on their DEL

We did not find any issues related to cease importation notices.

What enforcement actions we took

Health Canada took actions appropriate to the risk identified to protect the health and safety of people in Canada. Our actions included requesting companies to stop selling or importing certain products.

The companies are responsible for putting measures in place to ensure they meet regulatory requirements. They must also take action to eliminate or mitigate any risks.

Table 2 provides details on the actions we took for each company. All companies resolved the issues to our satisfaction.

**Table 2: Findings and enforcement actions**
Establishment names (DEL number/site)	Province	Findings^{Footnote *}	Actions
The Clorox Company of Canada Ltd (DEL 102128, site A)	Ontario	No findings	No actions taken.
H & A c/o Pharmrite (DEL 102259, site A)	Ontario	Did not fully comply with their T&Cs	At our request, the company stopped importing and selling products that did not meet regulatory requirements. The company was able to restart these activities once the issues were addressed.
Halo Pharmaceutical Canada Inc. (DEL 101986, site A)	Quebec	Did not fully comply with their T&Cs	We informed the company of the issues identified. The company’s response was reviewed and found to be acceptable. No other actions were necessary based on the level of risk to health.
Jamp Pharma Corporation (DEL 100590, site C)	Quebec	Did not fully comply with their T&Cs	At our request, the company stopped selling products that did not meet regulatory requirements. The company was able to restart these activities once the issues were addressed.
Methapharm (DEL 100927, site A)	Ontario	No findings	No actions taken.
Omega Laboratories Ltd. (DEL 100277, site A)	Quebec	Did not fully comply with their T&Cs	We informed the company of the issues identified. The company’s response was reviewed and found to be acceptable. No other actions were necessary based on the level of risk to health.
Pharmaris (DEL 3-002451, site A)	British Columbia	No findings	No actions taken.
Sandoz Canada Inc. (DEL 101370, site A)	Quebec	Did not fully comply with their T&Cs	At our request, the company stopped importing and selling products that did not meet regulatory requirements. The company was able to restart these activities once the issues were addressed.
Teva Canada Limited (DEL 101810, site A)	Ontario	Did not fully comply with their T&Cs	We informed the company of the issues identified. The company’s response was reviewed and found to be acceptable. No other actions were necessary based on the level of risk to health.
Table 2 Footnote * based on what was verified Table 2 Return to footnote * referrer

What we will do with the results

Although a small number of companies were visited during the project, Health Canada is using what we found to:

provide better guidance to industry on how to meet their regulatory obligations, which includes clarifying:
- what is necessary to achieve compliance with T&Cs on a DEL and cease importation notices
- consequences of non-compliance
strengthen how we monitor the industry’s compliance with T&Cs and cease importation notices, such as:
- looking at a random sample of DELs with T&Cs each year to verify whether companies are complying with their T&Cs

We will continue to keep the public informed of our proactive monitoring activities.

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2023-09-21

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