Establishment Licence Fees Remission Order (Indication of an Activity in respect of a COVID-19 Drug): SOR/2020-213

Canada Gazette, Part II, Volume 154, Number 21

Registration
SOR/2020-213 September 28, 2020

FOOD AND DRUGS ACT

The Minister of Health, pursuant to section 30.63 footnote a of the Food and Drugs Act footnote b, makes the annexed Establishment Licence Fees Remission Order (Indication of an Activity in respect of a COVID-19 Drug).

Ottawa, September 16, 2020

Patricia A. Hajdu
Minister of Health

Establishment Licence Fees Remission Order (Indication of an Activity in respect of a COVID-19 Drug)

Interpretation

Definitions

1 (1) The following definitions apply in this Order.

Other words and expressions

(2) Unless the context otherwise requires, words and expressions used in this Order have the meanings assigned by the Regulations or the Fees in Respect of Drugs and Medical Devices Order, as the case may be.

Remissions

Establishment licence

2 (1) Subject to subsection (2), remission of an amount equal to the fee referred to in subsection 29(1) of the Fees in Respect of Drugs and Medical Devices Order for the examination of one of the following applications or, if applicable, of the amount referred to in section 49 of that Order is granted to a person described in subsection 29(2) of that Order:

Conditions

(2) The remission is granted on the condition that

Annual review

3 (1) Subject to subsection (4), remission is granted of the amounts referred to in subsections (2) and (3) to the person described in subsection 29(2) of the Fees in Respect of Drugs and Medical Devices Order that submits an application for the annual review of an establishment licence that was issued or amended by the Minister under section C.01A.008 of the Regulations after examination of an application referred to in paragraph 2(1)(a) or (b), as the case may be.

Amount — building located in Canada

(2) The amount that is remitted in respect of each building located in Canada is

Amount — building located outside Canada

(3) The amount that is remitted in respect of each building located outside Canada is an amount equal to the fee referred to in section 40 of the Fees in Respect of Drugs and Medical Devices Order for the examination of an application for the annual review of an establishment licence that was issued by the Minister under section C.01A.008 of the Regulations after examination of an application referred to in paragraph 2(1)(a) or (b) or, if applicable, the amount referred to in section 49 of that Order.

Conditions

(4) The remission is granted on the condition that

Coming into Force

Registration

4 This Order comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Remission Order.)

Issues

Drug submissions approved under the Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19 (the Interim Order) will not be subject to cost recovery fees. However, applications for new drug establishment licences, amendments, and the annual review of drug establishment licences issued in relation to COVID-19 drugs under the Interim Order are still subject to fees fixed in the Fees in Respect of Drugs and Medical Devices Order (the Fees Order). The application of cost recovery fees for these activities may hinder or delay access to drugs for the treatment, mitigation, or prevention of COVID-19.

The situation related to the COVID-19 pandemic in Canada is changing daily, requiring a rapid response to protect the health of Canadians. The Establishment Licence Fees Remission Order (Indication of an Activity in respect of a COVID-19 Drug) [the Remission Order] directly supports the Government of Canada’s response to the COVID-19 pandemic by helping Canadians gain access to important drugs in a timely manner.

Objective

The objective of this Remission Order is to provide for the remission of fees to adopt a consistent approach to the cost recovery of fees associated with the COVID-19 drugs authorized under the Interim Order. This Remission Order contributes to providing Canadians with timely access to drugs for use in relation to COVID-19 by reducing costs associated with the application process. It grants a remission of the fees to qualifying applicants for the examination of applications for new establishment licences, amendments to establishment licences, or annual licence reviews, related solely to COVID-19 drugs.

Description and rationale

Health Canada (the Department) is the regulator responsible for helping Canadians maintain and improve their health. As the regulator for human and veterinary drugs, and medical devices, Health Canada performs scientific evaluations of products before they are authorized for sale, monitors these products once made available to Canadians, verifies compliance, and takes action when non-compliance is identified. Health Canada charges fees for these regulatory activities, including the pre-market regulatory review, the ongoing surveillance of products once they are on the market, and the review of establishment licence applications.

Any person who fabricates, packages, labels, imports, tests, distributes, or wholesales a drug in Canada must hold an establishment licence issued under the Food and Drug Regulations. Fees for the examination of applications for establishment licences, amendments to establishment licences, and the annual review of establishment licences apply, as fixed in the Fees in Respect of Drugs and Medical Devices Order.

Health Canada’s approach in responding to the COVID-19 pandemic has been to rely on the authorities of the Food and Drugs Act and the Food and Drug Regulations. Where it is determined that these authorities do not provide the legislative tools necessary to respond expeditiously to the COVID-19 pandemic, the Minister of Health has recommended the enactment of temporary interim orders under subsection 30.1(1) of the Food and Drugs Act.

In this context, the Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19 was enacted to streamline the approval of drugs used for the treatment, mitigation, or prevention of COVID-19. Under this Interim Order, there are no cost recovery fees for the review of a submission, and authorization holders are not subject to fees for the right to sell drugs. The Interim Order also introduces an option for establishment licences to be issued in relation to COVID-19 drugs with certain flexibility, taking into consideration the urgent public health need. Since most provisions of the Food and Drug Regulations still apply to establishment licences issued in relation to COVID-19 drugs, cost recovery fees are still applicable. All drug product authorizations and establishment licences issued on the basis of the Interim Order will expire when the Interim Order ceases to have effect.

Section 30.63 of the Food and Drugs Act allows the Minister to remit, by order, all or part of any fee fixed in the Fees in Respect of Drugs and Medical Devices Order. The policy intent of this Remission Order is to remit the fees associated with the examination of an application for an establishment licence or an amendment to an establishment licence when the applicant indicates it is solely in relation to a COVID-19 drug in accordance with the Interim Order. Fees for the annual licence review for those same establishment licences will also be remitted, but only for buildings or activities that are solely related to COVID-19 drugs. If an applicant chooses to apply for an establishment licence or an amendment to an establishment licence without indicating it is in relation to a COVID-19 drug, fees will continue to apply.

This Remission Order forms part of Health Canada’s response to the COVID-19 pandemic and is intended to work in tandem with the Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19. The purpose of these orders is to streamline regulatory requirements and remove barriers to bring to market drugs used in relation to COVID-19. Remission of fees for establishment licence applications or amendments submitted in accordance with the Interim Order will contribute to providing Canadians timely access to drugs for use in relation to COVID-19 by reducing costs associated with this process.

This Remission Order with respect to COVID-19 drugs addresses the financial barriers presented by the requirement to pay fees for the examination of a new establishment licence, for an amendment, or for an annual licence review in an efficient and transparent manner. This fee Remission Order, and the Interim Order it applies to, will benefit both regulated parties and the Canadians whose health outcomes may depend on timely access to medically necessary COVID-19 drugs.

Consultation

Canadians were informed of the expedited review of COVID-19 drug submissions and applications through the “Notice: Expedited Review of Health Product Submissions and Applications to address COVID-19” published on March 18, 2020. In addition to this published notice, through various other communications, members of the federal health portfolio, provincial and territorial governments, industry associations, and other stakeholders have been made aware of this action to expedite the authorization of drugs with a COVID-19 indication.

Due to the urgent nature of the COVID-19 pandemic, broader stakeholder consultation on this Remission Order was not possible. Health Canada anticipates that most stakeholders will be supportive of this Remission Order, as it provides financial relief. Approximately 56 establishment licence holders (both medical device and drug) have contacted Health Canada requesting information about applications and fees for establishment licences in the context of the COVID-19 pandemic. There have been approximately 45 requests for a fee waiver from establishment licence holders involved in either drug- or medical device-related activities. The Department is managing these enquiries on a case-by-case basis. Stakeholders’ emails indicate an interest in participating in the efforts to combat COVID-19.

Benefits and costs

The Remission Order directly supports the Government of Canada’s response to COVID-19 and the analytical requirements for cost-benefit analysis have been adjusted to permit a timely and effective response.

This Remission Order affects any person who fabricates, packages, labels, imports, tests, distributes, or wholesales a drug used in relation to COVID-19 in Canada in accordance with the Interim Order. The fee remissions granted under this Remission Order will help remove financial barriers to bringing COVID-19 drugs to market, thereby directly benefitting the pharmaceutical industry. It is possible the remission may also provide an incentive to the industry to bring COVID-19 drugs to Canada.

Quicker and increased access to COVID-19 drugs may reduce health resource burden by keeping Canadians out of hospitals and other professional care, reduce the risk of morbidity and mortality, and reduce the economic impacts from further business shutdowns. It is anticipated the Remission Order will result in indirect benefits to Canadians, by facilitating access to drugs that may be needed for treatment, mitigation or prevention of COVID-19. This Remission Order is expected to benefit all Canadians, including Indigenous and remote communities.

Health Canada reviews approximately 800 drug establishment licences annually. The Department also receives approximately 3 500 applications every year, including new applications, amendments to establishment licences, and renewals. The impact on Health Canada of not recovering the fees is expected to be low, as the fees remitted under this Remission Order will apply only to applications submitted solely in relation to a COVID-19 drug. These new applications do not form part of current revenues, were not anticipated as part of departmental revenue forecasts, and are time-limited.

Although there may be an increase in the workload to oversee new buildings or activities related to COVID-19 drugs, the incremental cost to the Department is not expected to be significant. The costs associated with regulatory oversight are expected to be similar to the Department’s usual costs. A small increase in cost is possible due to the extra effort that may be required to expedite applications submitted in accordance with the Interim Order.

Small business lens

This Remission Order applies to a person who submits, in accordance with the Interim Order, an application for a new establishment licence or an amendment to an establishment licence to conduct activities solely related to a COVID-19 drug. Fees will also be remitted for the annual licence review of those same establishment licences.

The Fees Order contains mitigation measures in respect of the fees that are payable by small businesses, which represent approximately two thirds of establishment licence holders. This Remission Order will provide further relief to small businesses by remitting the payable fees for establishment licences solely in respect of COVID-19 drug-related activities, if the conditions of this Remission Order and the Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19 are met.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on businesses.

Regulatory cooperation and international obligations

User fees are commonly charged across all levels of government for services. Other countries charge fees to industry for regulatory services, such as the user fees for new drug submissions and the registration of drug establishments charged by the United States Food and Drug Administration.

A remission is an extraordinary measure that allows the government to provide full or partial relief when it can be justified. This Remission Order enables an integrated and consistent approach to the cost recovery of fees associated with the COVID-19 drugs authorized under the Interim Order, resulting in a more coherent regulatory approach.

The COVID-19 pandemic is a global threat that does not recognize borders and can only be overcome through coordinated action all around the world. Canada continues to contribute to international efforts to address the ongoing pandemic.

Gender-based analysis plus

While the COVID-19 drugs authorized under the Interim Order would benefit all Canadians, some populations are at higher risk of developing serious symptoms or dying of COVID-19. These include older adults; people at risk due to underlying medical conditions; people who have compromised immune systems; or anyone facing socio-economic challenges, such as difficulty accessing medical care or health advice, unstable employment or inflexible working conditions, social or geographical isolation, or inadequate housing conditions. Racialized communities have been disproportionately impacted by COVID-19. A significant proportion of deaths due to COVID-19 have occurred in long-term care facilities in Canada. In addition, Indigenous communities may be particularly vulnerable due to challenges presented by overcrowding, remote locations, and lack of access to clean water.

Recent information released by the Public Health Agency of Canada indicates that, among the general public, a higher proportion of severe cases of COVID-19 has been seen in males. This includes the risk of hospitalization, the risk of admission to an intensive care unit, and the risk of death. Within First Nations communities, public health evidence revealed exposure being currently limited, with a higher proportion of Indigenous cases among females.

It is anticipated the Remission Order will result in indirect benefits to Canadians, including Indigenous and remote communities. The Remission Order is expected to facilitate access to drugs that may be needed for treatment, mitigation or prevention of COVID-19.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, section 4.4, the Remission Order is exempt (2.1, urgency) from conducting a strategic environmental assessment, as it is time sensitive and related to COVID-19.

Implementation, compliance and enforcement

This Remission Order comes into force on the day on which it is registered.

Proceeding directly to the final publication in Part II of the Canada Gazette allows the Remission Order to come into force in a timely manner. It provides regulated parties with the opportunity to benefit from fee remission for establishment licensing solely related to COVID-19 drug activities without significant delay. Proceeding directly to final publication allows the coming into force for both the Interim Order and the Remission Order to be aligned and for a coherent approach to the application of cost recovery fees.

Fees will automatically be remitted by Health Canada for the review of applications for new establishment licences, amendments, and annual licence review submitted in accordance with the Interim Order. Establishment licence holders will be notified in writing of the scope and implementation of the Remission Order.

Health Canada issues drug establishment licences pursuant to the Food and Drug Regulations. The Department is working to maintain the integrity of its legislative frameworks, while ensuring key priorities are being managed and addressed, and Canadians continue to have access to safe, high-quality products in the context of the COVID-19 pandemic.

Contacts

General enquiries

Catherine Hudon
Director
Compliance Policy and Regulatory Affairs
Policy and Regulatory Strategies Directorate
Regulatory Operations and Enforcement Branch
Health Canada
Address Locator: 1907A
200 Eglantine Driveway
Jeanne Mance Building
7th Floor, Room 705A
Tunney’s Pasture
Ottawa, Ontario
K1A 0K9
Telephone: 343‑540‑8524
Email: hc.prsd-questionsdspr.sc@canada.ca

Questions related to the issuance of establishment licences

Kim Godard
Director
Health Product Inspection Licensing
Health Product Compliance Directorate
Regulatory Operations and Enforcement Branch
Health Canada
Address Locator: 1913C
200 Eglantine Driveway
Jeanne Mance Building
13th Floor, Room 1321C
Tunney’s Pasture
Ottawa, Ontario
K1A 0K9
Telephone: 613‑404‑7882
Email: kim.godard@canada.ca

Questions related to fee payment

Eileen Dent
Acting Director
Planning and Accountability
Planning and Operations Directorate
Regulatory Operations and Enforcement Branch
Health Canada
Address Locator: 1904B
200 Eglantine Driveway
Jeanne Mance Building
4th Floor, Room 455B
Tunney’s Pasture
Ottawa, Ontario
K1A 0K9
Telephone: 613‑797‑3372
Email: eileen.dent@canada.ca