Good morning, Mr. Chair.
Thank you for the opportunity to appear before the committee. Thank you to committee members for all of your work on the pre-budget consultations.
I'm Dr. Emily Bond. I'm programs director at the Canadian Animal Health Institute, CAHI. It's a national organization representing developers, manufacturers and distributers of animal pharmaceuticals, biologics, feed additives, veterinary health products and animal pesticides. Our members make up the sales of approximately 95% of the animal health product market in Canada.
Over the last five years, Canada has seen a 40% decrease in the availability of licensed veterinary medicines in Canada due to Canada's regulatory environment and increasing regulatory fees. For 2023, an additional consumer price index increase resulted in an annual rise of regulatory costs for veterinary medicine of up to 20%. This increase will inevitably trickle down the supply chain to livestock and poultry producers, and then to Canadian consumers, who are already faced with drastic increases in the price of food. Veterinarians and producers must resort to alternative strategies, such as using compounded products, off-label drug use, own-use importation and online purchases of products that are not available in Canada but are available in other countries. These strategies come with significant risk.
We have three key recommendations for the committee today.
First, the government should amend the fees related to the veterinary drug services policy to an amount that would make Canada proportionally competitive to key trading partners. The Canadian market is already of a considerably smaller market size, which hinders return on investment for drug developers and deters companies from making the initial investments required to bring products into Canada. On April 1, 2020, the regulations came into effect, introducing up to a 500% fee increase for regulatory reviews of veterinary drugs. These higher fees surpass those of similar markets like Australia and the EU, making it very challenging for Canadian veterinary drug companies to compete globally.
Second, the government should amend the Food and Drugs Act to allow foreign decisions by trusted regulatory authorities in other jurisdictions for manufacturing quality and clinical efficacy reviews related to the authorization of veterinary drugs. The regulatory process can be streamlined and made more cost-effective, making it easier for companies to access the Canadian market based on approvals and reviews already completed and approved in the EU and the United States.
Third, the government should amend its policy and abolish drug establishment licence fees for low-risk active pharmaceutical ingredients. In 2017, regulatory changes were introduced that increased good-manufacturing process requirements for active pharmaceutical ingredients to improve oversight. These changes inadvertently put the availability of many veterinary drugs at risk in Canada, without significantly improving safety or quality. These changes came with new regulatory fees and increased costs for drug components. A growing number of API sources can no longer meet the new Canadian requirements, particularly many of the low-risk active pharmaceutical ingredients, which are considered food ingredients in other markets.
Adopting these recommendations is crucial to addressing the declining access to veterinary products in Canada. Animal health products play a vital role in the well-being of animal health, but also human health and the health of our planet.
Thank you very much. I'll be pleased to take any questions.