FEATURE NEWS: Health Canada Proposes Regulation to “Exempt” the NPN Back-log

IHR Editor Robert McMaster provides a news round-up of Health Canada's recent proposed regulation to "exempt" the NPN back-log, and some background on the issue for retailers.

Health Canada Proposes Regulation to “Exempt” the NPN Back-log
by Robert McMaster

Health Canada has taken action to address the large class of Unprocessed Product License Applications. Regulations have been published in the Canada Gazette Part I (May 8, 2010) detailing a protocol for the “orderly transition” of the existing backlog of natural health product applications that Health Canada has not processed. In an attached Regulatory Impact Analysis Statement, Health Canada acknowledges there are about 10,000 natural health products (NHPs) currently being sold for which outstanding license applications have been made that the department has not processed. This is a situation that has been festering for many years, so Health Canada explains its current impulse to act:

“As a result of recent stakeholder feedback regarding the sale of unlicensed NHPs, Health Canada is of the opinion that a temporary solution is needed to allow Canadians access to products that meet certain safety criteria, while also making sure safety measures are in place…”

The “recent stakeholder feedback” refers to statements and actions taken by the National Association of Pharmacy Regulatory Authorities (NAPRA) in January 2010 against the sale of unprocessed NHPs in drug stores which they alleged were “unsafe”. The regulations HC proposes is described as a “temporary instrument” that “would make the sale of these products legal”. To qualify for exemption a product would have to comply with specified safety criteria. These are:

• The product is not a sterile product for ophthalmic use;
• “To the best of the applicants knowledge” the product is not likely to result in injury by its user;
• The product is not recommended for any health condition listed in Schedule A;
• The product is not recommended for use by children, pregnant or breastfeeding women;

Health Canada will also publish a registry of exempted products on its website. Also, manufacturers must ensure that an exemption number designated as an “EN” be printed on product labels “within a reasonable time”. An exemption number would remain valid until the application is withdrawn, is formally approved or refused or until the regulations expire at the end of 30 months after coming into force. In their cost-benefit statement, HC says “the proposal could preserve $245 million or more of the product sales for the affected products in the first year of its implementation,” and that “there would be no additional cost to consumers and retailers”. These regulations would require HC to issue an exemption number to qualifying NHPs either within 180 days from when applications was first made or by 15 days after the regulations come into force. Since most affected products have been long outstanding HC would have issue thousands of exemption licenses within a two week period.

Carl Carter, regulatory affairs director of the Canadian Health Food Association (CHFA) is quoted in the Toronto Sun (May 19th) as saying, “The proposals reassure the CHFA”. “A big concern to us was really the unnecessary potential for consumer confusion,” he said. Lawyer Shawn Buckley of the Natural Health Products Protection Association (nhppa) has issued a personal discussion paper expressing deep reservations. “As the law currently stands, persons who have submitted licence applications are not in danger of convictions for selling without a licence. There is no need to exempt them or deem licences to avoid convictions,” he writes. Manufacturers who go to the expense of acquiring an exemption licence are no better of than those who decline this route and simply wait for their application to be processed. Buckley also is concerned that HC will use this regulatory initiative to ramp up enforcement at the retail store level. “Once the back-log is cleared, Inspectors can walk into health food stores and seize every product that does not have a licence number on the label”.


The Backstory
by Robert McMaster

With pharmacy regulators throwing a fit and Health Canada’s (HC) exemption regulations for outstanding NPNs, how is a retailer to make sense of this and is there anything you can or should be doing? To get a fix on this, frame it politically. The Harper government is preparing to introduce its third version of consumer safety legislation. Twice before – as Bills C6 and C51 – the Harper government has failed in this mission and that rankles. Two public constituencies rallied to sufficiently fuel legislator concerns. These were civil libertarians and the natural health community. The Prime Ministers Office (PMO) aims to neutralize these threats this round by pre-emptive action. So, there have been leaked press stories that many authoritarian provisions will be deleted from the forthcoming Bill. That’s meant to send a friendly signal to the civil liberties folks. Now, what about the natural health freedom crowd? More than anything the PMO wants to ensure that nothing occurs to provoke a repeat incident of MP and media-directed consumer fury over fears that Health Canada is about to ban popular natural health products (NHPs).

Into this scenario the pharmacy regulator initiative precipitates. Apparently, relations are such that when pharmacy regulators want to communicate some concern to Health Canada the rational thing is to issue a hostile press release. By throwing down the gauntlet the pharmacy people intended to create a “public safety” pretext that would allow HC to outright ban the offending class of products. In this event, the industry and consumers would go ballistic and start pounding on MPs. HC would deflect the blowback onto the pharmacy regulators (they forced us to do it!).

Such a situation would jeopardize the pending consumer safety bill, so a Higher Power has forced an alternative solution. Since there is concern over the ambiguous status of outstanding NPNs, a decision has been made to resolve the problem by effectively ‘legalizing’ the lot through the magic of the Canada Gazette. The PMO hopes that thus assuaged the natural health community will not be inclined to interfere with their legislative plans. For the PMO, this is an easy ‘give’. They could care less that this puts noses out of joint at HC. For them, this is a major defeat. But it is not a victory for natural health. It’s not yet clear how this will play out and the situation is unstable. There’s a lot of money on the line and reputations at stake so expect more trouble.

In politics there are two currencies – money and people. We don’t have the money but we can surely mobilize the power of hundreds of thousands of registered voters. In the absence of national organizations that command the confidence of natural health consumers’ only retailers as a group have a direct and trusted relationship. Natural health retail establishments are the local constituency offices of the natural health movement. Every store can be the hub of a neighbourhood support network. If retailers proactively organize, support, and sponsor their customers to speak up and act then they will make a force that has serious political weight. Your customers want you to step up to the plate.