Canada Trims Red Tape Around OTC Switches As Part Of Agency Cuts
This article was originally published in The Pink Sheet Daily
Executive Summary
The process of switching drugs Rx-to-OTC will be streamlined as part of the government’s budget cuts. Health Canada, which must save $200 million annually by fiscal year 2014-15, also is tweaking its regulation of natural health products.
Health Canada faces streamlined regulatory responsibilities for Rx-to-OTC drug switches and natural health products under federal government plans to slash the agency’s budget and staff.
The change likely is a boon to U.S. sponsors seeking Canadian approval for OTC switches.
The Canadian health authority announced April 26 the government’s budget legislation – Economic Action Plan 2012 – calls for eliminating Schedule F of the Food and Drug Regulations, which HC says will reduce the red tape that typically holds up Rx-to-OTC switches 14 to 20 months.
Schedule F historically was a repository for prescription drugs and did not take into account the pharmaceutical industry’s movement toward switches. Thus, once HC’s Therapeutic Products Directorate had approved a switch application, the sponsor then needed a regulatory amendment to have the drug removed from Schedule F before it could be sold nonprescription (Also see "Canadian Rx-to-OTC Approval Process Could Be Smoother, GSK Exec Says" - Pink Sheet, 22 Sep, 2008.).
The regulatory change is not effective immediately. By the time the budget legislation is adopted and new regulatory amendments are issued and commented upon, it may be up to a year before Schedule F is actually phased out.
Self-Care Argument Wins The Day
“This specifically has been a burr under the saddle” for the Canadian OTC industry and a focus of intense lobbying in recent years, said Gerry Harrington, director of public affairs for Consumer Health Products Canada.
The trade association celebrated HC’s announcement by noting the elimination of Schedule F will reduce costs for the federal government, provincial health care systems and consumers. In an interview, Harrington said HC employs two full-time equivalents to manage Schedule F.
“We’ve been making some significant headway on the issue of how self-care and things like Rx-to-OTC switches save the health care system a lot of money,” he said. “And in the current environment where both the federal and provincial governments are all in challenging fiscal situations, there was a little bit more urgency around tackling something like this.”
Schedule F “specifically has been a burr under the saddle.”
– Gerry Harrington, Consumer Health Products Canada
Canadian food and drug attorney Teresa Reguly said the disposal of Schedule F will benefit U.S. drug marketers seeking OTC status for their products in Canada – especially when those products have long since switched in the U.S.
“I think this does present an opportunity for companies that are looking to get their products more easily to consumers more quickly,” said Reguly, an associate with Torys LLP in Toronto.
Merck Canada Inc. cheered Health Canada’s announcement in a May 1 release, saying “we applaud all measures that will make our health care system more efficient without compromising the health and safety of consumers.”
Famotidine, the active in Merck’s antacid Pepcid, is among the drugs stuck on Schedule F in Canada but available OTC in the U.S. The equivalent Pepcid AC (famotidine 20 mg), sold by Johnson & Johnson, was approved to switch by FDA in 2003 (Also see "Maximum Strength Pepcid AC Approval Calls For Postmarketing Study" - Pink Sheet, 6 Oct, 2003.).
Proton pump inhibitors marketed as OTCs in the U.S., including lansoprazole and omeprazole, also remain Rx in Canada.
Staff Cuts Weigh On NHPs
The Canadian government tasked Health Canada with reducing its budget by about $200 million annually by the 2014-15 fiscal year, which represents a 6.4% reduction in the agency’s budget. According to a spokeswoman, Health Canada expects to lay off about 840 employees, mainly in administrative, policy and other internal support services.
The Natural Health Product Directorate, responsible for oversight of products including Canada’s equivalents to dietary supplements, is in line to shed a quarter or more of its staff, Harrington said.
A previous backlog of NHP license applications largely has been cleared up, thanks in part to a temporary regulation that allows products an accelerated route to market with exemption numbers (Also see "Canada Natural Health Product Reg Chips Away At Application Backlog" - Pink Sheet, 25 Apr, 2011.). That regulation sunsets in February 2013.
One major change that could streamline the NHP regime for a contracted workforce is HC’s intention to shift food-like NHPs, including nutrition bars and functional beverages, under the umbrella of conventional foods (Also see "In Brief" - Pink Sheet, 12 Dec, 2011.). Reguly said this transition will require amendments to the food regulations and likely will take some time.
In general, CHP Canada is confident a smaller Health Canada still will be able to manage clearance of new NHPs in a timely fashion, given that “the approval process has improved dramatically” in recent years, Harrington said.
[Editor’s note: This story was contributed by “The Tan Sheet,”
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