Dive Brief:

• Health Canada is raising fees for regulation of medical devices and drugs to reflect the increased complexity and actual costs of the work involved, the agency said. The fee increases are detailed in a final report released Wednesday.
• In general, fees will be set at 50% to 100% of costs and phased in over four to seven years. Starting in April 2021, fee increases also will be tied to the Consumer Price Index and adjusted annually.
• The final fee schedule reflects a compromise after industry pushed back against higher rates that were initially proposed. The revised fees will go into effect April 1, 2020.

Dive Insight:

Health Canada said it now covers 43% of its costs of regulating drugs and device makers. By contrast, the European Medicines Agency recovers 100% of its costs from industry.

Canada first introduced fees for regulatory services in the mid-’90s to partially recover the costs for some of its activities. It had not revised those fees since 2011. The agency said stakeholders acknowledged that the regulatory fees needed updating but were concerned with the size of the proposed increases. Fee-setting ratios were reduced and a staggered approach to phasing in the increases was adopted in response to industry concerns.

Health Canada had proposed setting fees for pre-market evaluation of a drug or device at 90% of costs. The final fee, however, was set at 75% of costs, with the increase phased in over four years after industry suggested gradual increases.

Health Canada said it faces new challenges stemming from increasingly complex submissions, greater risks from counterfeit or contaminated products, and an overall higher volume of products imported into Canada. The costs of doing business have risen and placed pressure on the regulatory system as it works to remain internationally competitive in meeting performance standards, the agency said.

Health Canada had proposed specific changes to the medical device pre-market evaluation fees that included merging Class IV device applications into a single fee category and initiating a charge for applications currently reviewed without a fee, such as Class II amendments and Private Label applications. Industry presented counter proposals, including new fees for administrative submissions.

In response, Health Canada said it will implement a significantly reduced Medical Device Establishment Licence fee, based on updated costs.

Health Canada said it will cancel 25% of the fee paid if the government does not timely review the device.