Food and Drugs Act Matters
MILLAR KREKLEWETZ LLP is a boutique Canadian law firm with lawyers who have significant expertise in assisting businesses dealing with products regulated under Canadas Food and Drugs Act (including vitamins, supplements, and other natural health products), particularly in the direct selling context (an area where we also possess significant expertise).
The following is a short introduction to Food and Drugs Act matters and to our services in this area.
Food and Drugs Act Matters
A wide range of health products commonly available in the market-place today are regulated under Canada s Food and Drugs Act as natural health products (or NHPs). Typical NHPs include vitamins, minerals, essential fatty acids, health products made from plant materials and their extracts, homeopathic and traditional medicines.
In order to import and sell NHPs in Canada, companies must comply with the requirements of Canadas Food and Drugs Act and Natural Health Product Regulations. This means obtaining various approvals from Health Canada, the Canadian regulatory authority, before doing so. The two main approvals required to import and sell NHPs in Canada are: (1) a Product License; and (2) a Site License.
Where a product is considered to be a drug, similar, but more much more onerous approval and licensing requirements apply.
Obtaining a Product License involves submitting an application to Health Canada with evidence of the NHPs safety, efficacy, and quality. This can be an onerous process and may include submitting clinical test data or studies from the scientific literature to Health Canada for assessment. However, in some cases where a products safety and efficacy are already well-established (e.g. calcium, Echinacea), it may be possible to base the NHP application on a monograph for that product, providing a quicker route for NHP approval.
If Health Canada approves an NHP, it will issue a Product License for that product. Until an NHP is approved and issued a Product License, claims made in advertising or marketing the NHP are unverified and may be considered misleading or deceptive.
At present time, there is a very long waiting list for Product Licenses, and most new entrants to the market-place attempt to enter the market on the basis of a submission number provided by Health Canada on receipt of a complete Product License application.
Note, however, that even where submission numbers are obtained, the Canada Border Services Agency will still require a valid Site License (see below) before allowing commercial shipments of NHPs across the Canadian border.
Apart from the requirement to have a Product License, any company importing an NHP for sale in Canada must hold a Site License before the Canada Border Services Agency will allow commercial shipments of NHPs across the Canadian border.
As foreign companies cannot apply for a Site License, they may wish to import through a Canadian subsidiary, or engage another company, such as a broker or logistics company, holding a valid Site License, in order to import.
An Alternative Way to Sell to Canadians
Faced with the fairly daunting requirements for entering the Canadian market-place, and an untested Canadian market, some non-resident vendors seek an alternative means to sell NHPs to Canadians.
One currently available option is to structure sales to Canadians around Health Canadas personal use importation policy (the Personal Importation Policy). Generally speaking, the Personal Importation Policy allows individual Canadians to import unapproved NHPs for personal use, but not for commercial or other distribution.
If the Personal Importation Policy applies, then the NHP does not require a Product License and the individual importing the NHP does not require a Site License.
However, there are important limitations to the Personal Importation Policy, which must be taken into account of in structuring the non-resident companys sales policies, and sales agreement with any Canadian customers.
Further, the Personal Importation Policy will not apply to all health products, as certain drug ingredients are subject to specific import restrictions and cannot be imported under the Personal Importation Policy.
Accordingly, with the proper structuring and limitations, it is often possible for a non-resident to sell to Canadians, yet without coming under the jurisdiction and control of the Canadian Food and Drugs Act..