Agriculture Committee on April 1st, 2008

[Dr. Siddika Mithani]

We are taking slices of the 25% that is not harmonized and looking at ways in which we can look at the calculations of MRLs and withdrawal periods. So we are looking at specific sectors as we move forward.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

So there's no target date?

[Dr. Siddika Mithani]

We don't have a target. I cannot tell you there's a target for 2009 or 2010, but we are actively pursuing each sector and are able to do that within that particular sector.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

My next question is about the veterinary drugs directorate. Given the fact that you work with CFIA and Agriculture Canada a lot, is there a portion of your budget or are there cost-recovery mechanisms within VDD? How is that managed? Who is charged? Because CFIA obviously has a significant cost-recovery component in some areas.

[Dr. Siddika Mithani]

We do have cost recovery for review and evaluation. Cost recovery for veterinary drugs was introduced in 1995. Right now, our cost recovery is just 7% of our budget, so it's very, very small.

On the human side, we are looking at a cost-recovery initiative. At this point, we have not gone into re-examining the cost-recovery situation in the veterinary drugs area. We are targeting 2010, but before we do that there will be a lot of stakeholder consultation. We will be looking at how we calculate the cost recovery. Are we looking at 50%, 75%? What kind of percentage are we looking at in terms of—

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Excuse me, but that's 50% to 75% of what?

[Dr. Siddika Mithani]

Of the cost of doing business, the cost of each submission evaluation. As submissions come in, the cost is based on the cost of reviewing that submission. Right now it's only 7% of our budget; however, we really need to re-examine how we are going to do cost recovery for veterinary drugs after the elimination of the backlog and be able to go back to our stakeholders and come up with a system, a process, a mechanism to implement cost recovery.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Can you tell me how that compares with other jurisdictions with respect to their cost-recovery mechanisms? Are we doing something that could end up hurting R and D in Canada?

[Dr. Siddika Mithani]

Right now, when you look at cost recovery, we are much lower than the U.S. The U.S. is probably $300,000 per submission. We go around $100,000 per submission. Again, it depends on the type of submission, but the average new active substance is $100,000, versus the U.S, which is $300,000, so we are much lower. We really need to look at our cost-recovery system once we've eliminated backlog.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

On Mike's point, we're seen as a high regulatory cost area by companies applying for drug approvals. We're not a big market. We like to think we are, but Canada as a whole, compared to the United States, is not. That's just to point out that I think certainly most of us around this committee feel that the cost should be kept very low, that we can't be a higher cost regime than our competitors or it's difficult for our producers.

I want to make one point as well on emergency approvals, based on Lloyd's question. I don't want to leave the impression, at least from my own point of view, that we're opposed to that, because sometimes it is necessary. I've made requests myself for the horticultural industry, where there is a pest and there is a product in the United States that may be approved by their system and not in ours. I think there was a product in Mike's area in aquaculture that we had to approve one time under emergency approval. So that system is important to us and is necessary, as long as the proper guidelines are in place.

You'd mentioned in your opening remarks that a number of companies have decided not to file their submissions here, implying probably the high cost of doing so. I'm not sure why. Is it because there's a backlog? Is it because there's a high-cost regime?

When we get over this backlog, does Health Canada have any strategy to inform industry that we are a place for R and D, that they should be asking for approvals under our system parallel to the United States? That's important. We have to have access to the same kinds of drugs as they do.

I'll tell you how serious this is from a producer point of view. A producer in my riding couldn't use a feed additive for pork for five years. It got approval last year. He went broke on December 19, just before Christmas, as a hog producer. The cost, according to his calculation, of not being able to use that feed additive on his production base over that five-year period was $470,000. It had made that much difference, and he might still have been in business today.

So that's why I think you see us raising the concerns on the cost end. That is an example of how our cost regime and our lack of quick access to the same products as are available everywhere else has an economic impact on rural Canada.

Anyway, my question is on your backlog and the reason for submissions not being done here. Do you have a strategy?

[Dr. Siddika Mithani]

In response to your question, I believe the reason that companies are not coming is not because of cost recovery or the cost of submissions. It was because of two reasons. One was the fact that when submissions came in, they were evaluated on a case-by-case basis and there were no clear-cut guidelines on what requirements were. We've moved forward in articulating what our requirements are, and we continue to do so. We have a guidance document that articulates the requirements for drug submissions. So we are very clear in what we want. We weren't clear before.

Secondly, we had the backlog, and there was no incentive for industry to come in at the time when their submissions would take three years, five years, or eight years for approval. We've put in place process improvements such that we are beginning to eliminate the backlog. Our strategy as we eliminate backlog is the sustainability of being able to continue to review on time.

We've had discussions with the CAHI in encouraging their members to understand that we're getting rid of the backlog. We're eliminating backlog such that we are going to get submissions coming in. We've also talked to the livestock producers in saying that when you go to those companies in the U.S. you are buying drugs from, you have to tell them that we've reduced the backlog, that there will be elimination of backlog, and that there is a real opportunity to bring those drugs in.

I think we also need to understand that in order for us to be competitive, it's a shared responsibility. Health Canada's responsibility is to review on time, and we are committed to do that by early 2009. There has to be a commitment from CAHI to bring these drugs into the Canadian market, because Health Canada cannot make people bring in drugs, cannot make a manufacturer file a submission. They have to be encouraged to bring those in.

I think livestock producers also have a role to play in encouraging companies to come in with these submissions. If these are the drugs they truly require, it really has to be a partnership, and we're committed to that partnership.

[The Chair, Conservative, James Bezan]

Thank you.

I want to follow up on Mr. Easter's comment.

You're saying you want to reduce this backlog within 12 months from now. What are we looking at, then, for length of time for approval of new products? How is it going to reduce the cost and regulatory burden that so many companies are facing right now, which makes it difficult for them to make the decision to bring new products to Canada?

[Dr. Siddika Mithani]

There are a couple of things. We're talking about elimination of backlog. By early 2009 there will be no backlog; it will be review on time. Our review-on-time timelines are 300 days.

We've also said to industry that if they brought in submissions earlier, during the early drug development phase when we are able to tell them what our requirements are, and were developing those products based on our requirements—which, by the way, would be very internationally harmonized, so we would not really be asking for any more than what any other regulator would be asking—there would be an opportunity to further decrease that timeline.

The fact that companies will be able to file a virtual submission in two or three or four countries will decrease PR costs by allowing them to use that same submission with the same data across the world.

[The Chair, Conservative, James Bezan]

Which countries are we then comparing ourselves with? I would think it would be the Americans, the European Union regulatory burden, Australia, New Zealand. Are those the countries we're modelling ourselves after or that we're working collaboratively with so that we can have our livestock industries on the same level playing field?

[Dr. Siddika Mithani]

Yes, we are. We also hope or anticipate that in the next year, when we have eliminated the backlog, there will be real opportunities to discuss submissions with the U.S., with Europe, with Australia when they are filed, simultaneously in all these countries. You would really be looking at virtually all countries being able to approve a product almost at the same time. That's the objective.

[The Chair, Conservative, James Bezan]

That's fantastic.

Mr. Storseth.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much, Mr. Chair.

We all talk about the backlog, and maybe I'm out of the loop here. First, how big is the backlog?

[Dr. Siddika Mithani]

It's about 180 submissions right now.

[The Chair, Conservative, James Bezan]

Mr. Hills, you can make a comment.

[Bob Hills, Manager, Transmissible Spongiform Encephalopathy(TSE) Secretariat, Veterinary Drugs Directorate, Health Products and Food Branch, Department of Health]

Thank you.

There are approximately 180 submissions that were in backlog when we started at the beginning of this year. We have addressed that backlog by targeting greater than 90% of that backlog. The backlog is basically saying that if a submission is beyond our published time under our management of regulatory submissions, which is, say, 300 days for a new drug submission, it would be considered backlog if it were at 301 days.

We have addressed over 90% of that this year, meaning that this year—right now, as we speak today—there are approximately 50 submissions that we would consider to be in backlog right now. So we've made a significant difference between that and this year.

By the time we finish the fiscal year this year, towards the end of 2008 or the beginning of 2009, those 50 submissions as well as any new submissions coming in will be picked up and be reviewed on time, meaning that by fiscal year 2009 we'll be in a position such that all submissions will be reviewed within our management of regulatory submission timeframes.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

In your backlog, which it seems you've made tremendous progress on—

[Bob Hills]

Yes.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

—of the 130 you have gotten done—

[Bob Hills]

Approximately.