Health Committee on Sept. 27th, 2023

[Linsey Hollett]

As I mentioned earlier, inspections of NHPs and NHP entities have been growing at Health Canada for some time now.

When the OAG report was released, we welcomed the opportunity to run an official GMP inspection pilot. For members who may not be aware, that is Health Canada inspectors entering companies and assessing companies against good manufacturing practices or standards.

We welcomed that opportunity, because our program has been a very solid program in the reactive space for a very long time, and the ability to enter into the proactive space puts us in a better position to protect health and safety.

Also, we see the benefits of inspection as being across the board—Canadians, entities involved in the supply chain or involved in the industry, and Health Canada. In 2021 we launched the GMP inspection pilot. It was 36 companies, manufacturers and importers, and we did inspections, as I said, based on those good manufacturing practice requirements. We had a chance to consult with and work with industry and industry associations on the inspection pilot, and then we conducted those 36 inspections over the year. We saw what we would consider serious deficiencies in 42% of the inspections that we conducted.

There was great collaboration with the entities we inspected when we made those observations, in terms of their taking timely action to address them. I do want to make that point. However, what we came away from the pilot with was a confirmation of what we've seen over the last number of years: a non-compliance rate or a serious deficiency rate of around 40% to 42%. What cost recovery would allow us to do....When Dr. Sharma earlier in the meeting referred to there being gaps we needed to fill or improvements we needed to make, one of the initiatives that cost recovery would fund is a more robust permanent inspection program.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Hollett.

Thank you, Mr. Jowhari.

Next we'll have Mr. Majumdar, please, for five minutes.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Good evening. It's nice to see you all.

Like Mr. Doherty, I'm new to this committee and new to this file, so I did not benefit from participating in the decades of experience that you bring to this.

I was doing some math on this, and I'll tell you, in my by-election campaign during this summer, this was a major issue, especially for the smaller side of the small and medium-sized businesses that you're describing. This would crush them. The anxiety they feel about these taxes that are coming their way as well as the heavy-handedness generally of health policy-makers over the last four to five years.... It has created massive anxieties. I think they would benefit from more empathy when considering how to engage them and to ensure the safety of Canadians in the products they consume.

Health freedom is important, but so, too, is safety.

I was just looking at this, and maybe you can help explain this to me. There are 200,000 products. At $542 tax for each product, that amounts to over $108 million of annual tax revenue for the cost recovery piece of a 53-part program from 20 years ago. An annualized $108 million seems like an excessive approach toward cost recovery, when I can think of the Asian infrastructure bank as one immediate means to accomplish cost recovery for these types of services, which I'm sure cost a lot less than $108 million a year.

Could you explain to me the math around how this is the cost recovery that the Treasury Board's strict guidelines produced, Dr. Lourenco?

[Dr. Celia Lourenco]

You're referring to the right to sell fee, which is one of the fees that we are proposing in the cost recovery in the proposal. It is a fee that we would apply to companies to have right of access to the market. It's a fee of just over $500 for a regular company, and there would be a 25% reduction if it's a small business.

In our estimation of the revenues from that fee line, we made an assumption that there are likely to be about 50,000 products on the market, not 200,000. We have authorized 200,000 products but, in consultation with stakeholders in the past, our estimate is that there are probably around 50,000 products on the market.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

There is $30 million in annualized revenue for cost recovery for some 800 facilities that I think Dr. Sharma described. Again, this seems extremely excessive when you think about the 8,000 cases, 5,000 serious ones, that have been considered over the last number of years. It seems very ambitious revenue collection, tax collection, through imposing fees on small companies that are already feeling extremely anxious about heavy-handed health policies that are designed to try to control the products they wish to sell and the consumers who wish to consume them.

I'd like to understand what logic is involved in the $30 million annualized for cost recovery for any program of this scale.

[Dr. Celia Lourenco]

With regard to the right to sell fee that we're talking about and the approximately $30 million, these would be the revenues that would be used to cover postmarket activities, to cover the surveillance of advertising and the assessment of adverse drug reactions.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

You mentioned that. What's the cost of the program?

[Dr. Celia Lourenco]

The overall cost of the program, based on the current proposal, is about $100 million.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Before the proposal, how much was it?

[Dr. Celia Lourenco]

Before the proposal it was about $46 million, so we do need to ramp up the program.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

If you don't mind, it would be very helpful to have these figures tabled for the committee to study in more detail, to understand what revenue you're looking at to pay for the cost of the program as it stands. I would love to see that.

Thank you very much.

[Dr. Celia Lourenco]

The proposal is available online for anyone to download.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Could you table it with the committee, please?

Mr. Chair, I should be directing my comments through you. I apologize.

We would ask the witness to table it for the committee to consider.

[The Chair, Liberal, Sean Casey]

They're able to do that if it's publicly available.

Thank you.

You have 17 seconds. I think we're good. Thanks, Mr. Majumdar.

Mr. Fergus is next, for five minutes.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Mr. Chair.

I'd like to thank the public servants who are here today. We appreciate the value of their years of experience in helping us review the situation.

I'd like to come back to a series of questions that Mr. Thériault, my colleague from the Bloc Québécois, asked you. It's about the number of cases of adverse reactions associated with natural health products. There's a figure of around 700 in the last year, isn't there? Is that a true figure?

[Dr. Supriya Sharma]

There have been more than 1,000 cases in the last two years, 700 of which were serious.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

I see.

Mr. Thériault asked you a question, and I think it makes perfect sense to make a comparison.

So we're talking about 700 serious adverse reactions.

By comparison, how many adverse reactions are associated with regulated products, i.e., medical products that are sold with or without a prescription?

You said this figure was publicly available, but I'd like to have a figure here. Could you give us an estimate?

[Dr. Supriya Sharma]

We would have to come back to you with the specific number for the adverse effects of non-prescription drugs. I wouldn't have that number right now.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Would you know the number for prescription drugs?

[Dr. Supriya Sharma]

It's usually in the tens of thousands.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Tens of thousands, but I'm assuming the prescription drug market is much larger or the number of products available relative to the 50,000 natural health products that are available in Canada for sale right now.... Can you give me an estimate of the comparison between the size of the NHPs as opposed to the size of prescription products?

[Dr. Supriya Sharma]

I can give you the figure for non-prescription products, which are the comparable products to natural health products.

In terms of the size of the industry on a dollar basis—

[Greg Fergus, Liberal, Hull—Aylmer, QC]

I'm not sure if a dollar basis would be a good comparison, because I'm assuming you're going to pay more for a non-prescription drug, since they are considered a bit more organized. They have more obligations to report in terms of their ingredients and the like, and being able to recall the stuff.

I'd like to compare, roughly, apples with apples.

[Dr. Supriya Sharma]

For the numbers of over-the-counter products—that's non-prescription pharmaceuticals—since 1969, there have been over 5,200 products approved. For the natural health products, there have been over 190,000.

Again, it's a bit difficult to compare, because for those over 190,000 or 200,000, we don't know how many of those are marketed. This is because there's no requirement to let us know how many are marketed.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

There have been only how many?