COSTING COMPANION DOCUMENT FOR FEE
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1 COSTING COMPANION DOCUMENT FOR FEE g PROPOSAL FOR DRUGS AND MEDICAL DEVICES October
2 Table of Contents INTRODUCTION... 3 SCOPE... 3 METHODOLOGY AND DATA SOURCES... 3 SUBMISSION/APPLICATION EVALUATION (EVAL) FEES... 6 ESTABLISHMENT LICENSING (EL) FEES... 7 RIGHT TO SELL (RTS) FEES... 8 FEE LINE ACTIVITIES AND COSTS... 8 MEDICAL DEVICE LICENCE APPLICATION REVIEW ACTIVITIES AND COSTING... 8 HUMAN DRUG SUBMISSION EVALUATION (PHARMACEUTICAL, BIOLOGICS, OVER THE COUNTER DRUGS) ACTIVITIES AND COSTING VETERINARY DRUG SUBMISSION EVALUATION ESTABLISHMENT LICENSING (EL) FEES ACTIVITIES AND COSTING RIGHT TO SELL (RTS) FEES ACTIVITIES AND COSTING FUTHER INFORMATION List of Costing Tables Table 1 of Activities under Medical Device Licence Application Evaluation... 9 Table 2 of Activities under Human Drug Submission Evaluation Table 3 of Activities under Veterinary Drug Submission Evaluation Table 4 of Activities under Medical Device Establishment Licensing Table 5 of Activities under Drug (Human, Veterinary) Establishment Licensing Table 6 of Activities under Medical Device Right to Sell Table 7 of Activities under Human Drug Right to Sell Table 8 of Activities under Human Drug Right to Sell Activity Breakdown Table 9 of Activities under Veterinary Drug Right to Sell
3 INTRODUCTION Health Canada has developed and is consulting on its Fee Proposal for Drugs and Medical Devices (2017), which provides details on changes Health Canada is proposing to its fees. This costing companion document describes Health Canada s methodology, data sources, and costing calculations supporting the proposed fees. This document should be considered supplemental and should be read in conjunction with the Fee Proposal for Drugs and Medical Devices. SCOPE The fee proposal applies to regulatory activities related to human drugs, veterinary drugs and medical devices, for the following three fee lines: Submission / Application Evaluation (EVAL) fees Before a drug or medical device is authorized for sale in Canada, Health Canada reviews it to assess its safety, efficacy and quality. Establishment Licensing (EL) fees Health Canada inspects establishments to assess whether they comply with regulatory requirements to conduct regulated activities related to drugs and medical devices. Right-to-Sell (RTS) fees Health Canada monitors products on the Canadian market through post-market surveillance and compliance and enforcement activities. METHODOLOGY AND DATA SOURCES were determined as per the Treasury Board Secretariat s Guidelines on Costing, and were based on data. Program, corporate and capital costs were added together to determine the full cost of activities being undertaken. Unit costs were calculated so that the fee setting ratios could be applied to determine the final proposed fee. Data Sources Health Canada used an integrated approach to determine costs for program activities, drawing data from multiple sources. The Department developed and implemented a tiered activity structure for the drug and medical device programs that provides consistent definitions of key activities to allow for costs to be compared across programs and product lines. It has also introduced a program-wide time tracking system (the Cross-Application Timesheet Project System; CATS-PS) to collect level of effort (measured in hours) for each activity, including all time spent reviewing individual submissions and applications. The information contained in both the activity structure and time tracking systems are aligned with the data in the Departmental Financial System (SAP) and the Branch s drug tracking system (DSTS), which allows for more accurate mapping of activities to fee lines. 3
4 Methodology The total costs were determined by summing program costs (direct and indirect), corporate costs, and capital costs described in Figure 1. A costing model was developed based on a detailed activity structure that delineates all activities undertaken by employees within the programs. The model maps costs to specific activities, and allows Health Canada to calculate full costs by fee line. Figure 1 Illustration of Costing Methodology Program Direct: Includes costs related to submission review, compliance and enforcement, and post-market surveillance (includes salary for drug reviewers and inspectors, costs associated with laboratory analysis and operating and maintenance costs). Direct Service Support: Includes costs related to the activities that support individual submissions/activities, such as screening, reviewing, and approval processes of individual submissions/inspections or the oversight of direct activities. Indirect: Includes costs specific to program overhead costs (i.e., management, planning and reporting, policy work, and audit and evaluation work). Includes costs related to the services provided by Health Canada s branches, including management and oversight for Access to Information requests, audits and evaluations; communications; human resources; financial management; information management and technology; real property and security; accommodation; and legal services. Capital Includes maintenance, upgrade and investment costs for laboratory equipment, information systems, and fleet costs for Inspectors. Total The total costs are calculated as follows: Allocation of program costs: o Direct costs are calculated within each fee line; o Direct service support costs are allocated proportionally to all direct activities within the associated fee line (EVAL, EL or RTS); o Program indirect costs are allocated proportionally to all direct activities within the given program (Human Drugs, Medical Devices, or Veterinary Drugs); o Branch indirect costs are allocated proportionally to all activities across all of the health product programs; o Employee Benefit Package, calculated as 20% of total salary costs is applied to all salary costs. 4
5 Allocation of corporate costs: o Departmental internal services, estimated at 22.2% of program costs; o Accommodation, calculated as 13% of total salary costs; o Actual annual legal service costs for each program. Capital costs, including internal estimates for projected capital expenditures (IT projects, laboratories and fleets). o Capital costs for laboratories and information systems were allocated to RTS fees. These costs reflect Health Canada s ongoing commitment toward continuous improvement of its infrastructure, both physical and IT-related, most significantly in how submissions and applications are transmitted and processed. o These improvements are expected to provide lasting benefits to all stakeholders by lowering compliance costs, reducing administrative burden, and increasing global interoperability. o Capital fleet costs, and inspection-related lab and information system costs were allocated to EL fees, since they are incurred on behalf of inspection activities which are supported by establishment licensing fees. Excluded Activities Certain activities were deemed out of scope for cost recovery at this point, and costs for these activities were not included in any fee line. These include activities such as human drug clinical trial review, Special Access Program, investigational testing of medical devices, biologics research, and the biologics blood product compliance program. Validity of Time Tracking Data There were four complete years of data available from the time tracking system. The complete data set was used in calculating costs for EVAL and RTS fees. As a result of the creation of the Regulatory Operations and Regions Branch within Health Canada in 2016, EL fees were set based on data available only for the first year of inception of this new Branch ( ). Prior data on compliance and enforcement was not used, as organizational restructuring to increase effectiveness changed the relationship between types of costs. A comparison of the single-year dataset with historical direct costs indicated that the use of the single year dataset was valid and consistent. Overall time reporting compliance was high over the four years, with approximately 97% of salary costs being captured annually. Compliance gaps in areas contributing to branch overhead were reconciled with actual salaries reported in the departmental financial system. Some adjustments were made to EL costs to account for observed level of time tracking non-compliance. However, no reconciliation was done for direct costs in EVAL and RTS, as it would be impossible to determine to which fee categories missing costs belonged. In addition, bonuses unrelated to base salary, such as bilingual bonuses and executive performance pay, were not included in costs, except where reconciliation with the financial system occurred. All salary costs have been adjusted by 4.8% to bring historical costs to present value to account for salary increases from recent collective bargaining agreements. 5
6 Calculation of The time tracking data, when mapped against employee salary information contained in SAP, allows both direct and indirect program costs to be calculated for activities based on their use of resources: AAAAAAAAAAAAAAAA CCCCCCCC = (HHHHHHHHHH SSSSSSSSSS pppppp EEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEE HHHHHHHHHHHH SSSSSSSSSSSS) These costs, along with projected corporate and capital costs, were then used to establish the proposed new fees. While the costing methodology has been consistently applied across all fee lines at a high level, there were some differences in how the specific unit costs for fee lines were calculated: SUBMISSION/APPLICATION EVALUATION (EVAL) FEES Since submission review often takes place over multiple fiscal years, a calculation of average annual expenditures was not considered optimal. Thus, an hourly rate was determined for each fee category in pre-market human drug submission and medical device application reviews, which was then applied to the volume and average time spent on submissions within each fee category (e.g. New Active Substance). The hourly rate was determined by dividing the total costs by the total direct hours spent on each fee category (both as calculated by SAP PS). This was multiplied by the average time spent on a submission in that fee category for a sample of submissions. The scope of this sample was all submissions received and completed between April 2013 and March The unit costs for each fee category were then arrived at as follows: UUUUUUUU CCCCCCCC = HHHHHHHHHHHH rrrrrrrr Example: New Active Substances TTTTTTTTTT dddddddddddd hoooooooo iiii ssssssssssss NNNNNNNNNNNN oooo ssssssssssssssssssssss iiii ssssssssssss Hourly rate: The total costs to review New Active Substances during the four-year reference period were approximately $107.9M (Table 2, page 11). According to SAP PS, a total of 324,413 hours were directly charged to New Active Substance review during this time period. Thus, the hourly rate for reviewing a New Active Substance submission is $107.9M / 324,413 = $332.61/hr. Sample: Over the course of the four-year sample period, a total of 123 New Active Substance submissions were received for review and reached Decision 1. According to SAP PS, a total of 247,992 hours were directly charged to these submissions by Health Canada review staff. (Note: This differs from the total number of hours used to calculate the hourly rate, as only full submissions were used in the sample; i.e. any submissions which were received before April 1, 2013 or reached decision after March 31, 2017 are excluded from the sample.)now, the unit cost can be calculated: UUUUUUUU CCCCCCCC = HHHHHHHHHHHH rrrrrrrr TTTTTTTTTT dddddddddddd hoooooooo iiii ssssssssssss NNNNNNNNNNNN oooo ssssssssssssssssssssss iiii ssssssssssss 6
7 = $ , = $666666, pppppp ssssssssssssssssssss The unit cost is then used to calculate the updated EVAL fees, found in the Fee Proposal for Drugs and Medical Devices. EVAL fees for human drugs and medical devices were set at 90% of unit cost. Veterinary Drug Evaluation fees were not based on unit costs, as described on page 12. ESTABLISHMENT LICENSING (EL) FEES To calculate medical device EL fees, the total costs of all activities under that fee line were determined, then divided by the number of medical device ELs processed over that time period. Drug EL Annual Licensing Review (ALR) fees were calculated on a per building basis using domestic inspection program costs. Full program costs were allocated between building types (sterile fabricator, non-sterile fabricator, packager/labeller, importer, distributor, wholesaler and tester) based on the relative level of effort to inspect each building type using salary data as tracked in SAP PS. Relative level of effort was determined for each building type by dividing the fully loaded cost of inspecting each building type by the number of buildings inspected. The actual fiscal year per building inspection cost was multiplied by the total of number of buildings under all domestic ELs to determine the overall cost of the program. Dividing this overall cost by the number of buildings of each type yielded the unit cost per building. These unit costs were the basis of the updated EL fees, found in the Fee Proposal for Drugs and Medical Devices. The overall cost per drug EL holder will depend on the building types and numbers under their drug EL. The following method was used to determine the direct salary cost per facility: Determining cost per facility type: Using inspection time-tracking data; the average direct salary cost of inspecting each type of facility was determined. Determining relative costs: The least costly facility type to inspect (that for packagers/labellers) was designated as requiring 1 unit of inspection activity. The relative level of effort to inspect all other, more complex, facility types was then calculated as a multiplier of the simplest facility type (i.e., testers were 4.56 x more costly to inspect than a packager/labeller, so each tester requires 4.56 inspection units). Total inspection units were multiplied by the number of each facility type in the drug EL holder population to estimate the number of units of inspection activity that would be required by all domestics drug EL holders (a total of 3,777 inspection units would be required to inspect all drug EL holder facilities). 7
8 Calculating the ALR per facility fee: The fully loaded cost to be paid for by the drug EL ALR fee ($22,391,312) was divided by the total number of inspection units (3,768) to find the fully loaded cost per inspection unit ($5,941). The fully loaded cost per facility type was determined by multiplying the inspection units needed to inspect every facility of that type by the fully loaded cost per inspection unit. The fully loaded cost per facility was determined by dividing the fully loaded cost per facility type by the number of facilities of that type in the drug EL holder population. Calculating the Foreign Site fee: Foreign site costs were developed by dividing all costs related to foreign site oversight by the number of sites currently listed on drug ELs. RIGHT TO SELL (RTS) FEES For each product line (human drugs, veterinary drugs and medical devices) the total costs of all activities were calculated based on the four-year dataset, then annualized. Average annual expenditures for capital were then added to arrive at a total annual cost. This was then divided by the total number of annual product notifications to calculate the final unit cost. For the Medical Devices program, annual costs for ongoing IT projects with expected benefit to industry ($1.3M) were included in annual average costs. For the Human Drugs program, costs for ongoing IT projects with expected benefit to industry ($7.9M annually) and capital expenditures ($3.8M annually) were included in annual average costs. These investment costs are included in this fee line as they will benefit all stakeholders. The unit costs were then used to calculate the updated RTS fees, found in the Fee Proposal for Drugs and Medical Devices. FEE LINE ACTIVITIES AND COSTS This section provides the overall costs for each fee line that were used to calculate the proposed fees, as well as a description of the activities included within each fee line. MEDICAL DEVICE LICENCE APPLICATION REVIEW ACTIVITIES AND COSTING Included in this fee line are review activities for individual licence applications, as well as activities in support of groups of submissions (direct service support): Pre-submission meetings: Pre-submission meetings are held with application sponsors to discuss scientific details of the application and provide advice in terms of the application and the details required within the application. This is expected to elicit a complete application reducing the need to follow-up with the sponsor during the application review process. The activities associated with pre- 8
9 submission meetings include reviewing pre-submission packages, arranging and attending meetings, preparing correspondence, reviewing files, and developing recommendations. Application coordination/management: This involves the coordination and management of an application once it has been received by Health Canada. Activities include processing binders, CDs, DVDs and other electronic media, data entry into Medical Devices System (MDS database), creating SAP- Project System projects to allow tracking of time and application correspondence. Application screening & processing: Once an application has been received and entered into the MDS database (see coordination and management description above), an application is screened to ascertain whether it meets scientific content requirements and is administratively complete before it is formally accepted for review. Scientific/technical management: activities include coordinating and resolving issues related to complex applications, internal team meetings and management review of final decisions for a medical device application. External advice/consultation: Health Canada seeks external advice from experts when warranted (e.g. when reviewing new technology). Activities include preparing and attending Expert Advisory Committee meetings and Panels; preparing correspondence; reviewing files; arranging meetings; and preparing notes and recommendations. Joint review coordination: Health Canada receives applications with joint drug/devices technology (otherwise known as combination products). These products need to be reviewed from the perspective of medical devices but also from a specialized area of pharmaceuticals and biologics. As a result, this activity encompasses the coordination between the Medical Devices Bureau and Pharmaceutical Bureaux. Table 1 of Activities under Medical Device Licence Application Evaluation Activity Class II Licence Application Class II Licence Amendment Class III Licence Application Class III Licence Application (near patient) Class III Changes in Manufacturing Class III Significant Changes Class IV Licence Application Class IV Changes in Manufacturing Class IV Significant Change (not related to Program Total Average Hourly Rate Unit Cost $2,078 $740 $2,819 $ $696 $872 $306 $1,178 $ $355 $19,320 $6,876 $26,196 $ $15,401 $1,732 $608 $2,340 $ $35,852 $497 $176 $673 $ $11,062 $13,596 $4,836 $18,432 $ $12,363 $10,602 $4,049 $15,455 $ $33,403 $585 $200 $785 $ $8,427 $5,651 $2,011 $7,662 $ $17,674 9
10 Activity Manufacturing) Private Label Applications Program Total Average Hourly Rate Unit Cost $128 $45 $173 $ $191 While Class II amendments and Private Label Applications/Amendments are new fee lines, they are existing application types that are currently received and processed by Health Canada for no fee. Data was available to determine the costs for reviewing these applications; however, the data used to calculate unit costs were adjusted based on further internal analysis of actual level of effort for these submission types. HUMAN DRUG SUBMISSION EVALUATION (PHARMACEUTICAL, BIOLOGICS, OVER THE COUNTER DRUGS) ACTIVITIES AND COSTING Included in this fee line are review activities for individual submissions, as well as the following activities in support of groups of submissions (direct service support): Pre-submission meetings: Pre-submission meetings are held between Health Canada and Industry to allow sponsors to deliver a brief presentation of their drug product prior to filing the drug submission application with Health Canada. This activity includes administrative processes related to the meeting set-up, review of pre-submission packages, preparation for and participation in Pre-Submission meetings, and preparing correspondence, notes and recommendations. Submission coordination/management: Regulatory project management of a drug submission is conducted throughout the drug submission lifecycle. Activities include screening a drug submission to determine acceptance for review, responding to inquiries and providing regulatory process advice to industry/staff and project planning a drug submission through the review processes, as well as associated administrative processes including updating databases and issuing Regulatory Letters & Notices. Screening: The screening of a drug submission to assess the completeness of the filing to determine acceptance to the review phase of the submission life cycle. External advice/consultation: Health Canada seeks external advice from experts when warranted in the cases of new innovative therapies. Activities include preparing and attending Expert Advisory Committee meetings and Panels including arranging meetings, preparing correspondence, reviewing files and preparing recommendations. Periodic Safety Update Reports-Confirmatory (PSUR-C): A PSUR-C is an update of the worldwide safety experience of a medicinal product at pre-defined times after the product has received a Notice of Compliance with Conditions. As part of a Notice of Compliance with Conditions, sponsors commit to filing the PSUR-C. Activities include the review of a PSUR-C. Submission processing & support: This involves the administrative activities related to processing a drug submission application when it is initially filed with Health Canada and upon completion of the review process. Activities include processing of binders, CDs, DVDs and other electronic media, data entry in the Drug Submission Tracking System (DSTS), Drugs Product Database and Docubridge 10
11 document management system, creation of SAP-Project System projects to allow tracking of time, financial processing of submissions as per cost recovery requirements and issuance of Drug Identification numbers. Scientific/technical management: Scientific managers manage and authorize numerous decisions once an application has been reviewed. Activities include coordinating and resolving issues related to complex submissions, internal team meetings, responding to internal submission questions, discussions with review managers/staff on issues relating to submissions/applications, assigning submission workload to review staff, and managing science issues relating to regulatory research and development for market authorization. Intellectual property (patents, data protection): All submissions seeking a Notice of Compliance (NOC) are considered under the Patented Medicines (Notice of Compliance) Regulations (under the authority of the Patent Act) and the data protection provisions of the Food and Drug Regulations at the point of filing and prior to NOC issuance. The Patented Medicines (Notice of Compliance) Regulations continue to be applied with respect to brand-name submissions after NOC issuance where there are relevant patents that have not expired, and to innovative drugs where a supplemental submission is filed that contains pediatric data. Activities associated with the Patent Regulations include screening/processing of patent lists, maintaining information in the Patent Register, auditing patents, processing Notices of allegation, processing materials related to prohibition applications and ensuring compliance with court orders. Activities associated with data protection under the Food and Drug Regulations include conducting an NAS/innovative drug determination and maintaining information in the Register of Innovative Drugs. Table 2 of Activities under Human Drug Submission Evaluation Activity Program Total Avg. Hourly Rate Unit Cost New Active Substance $79,927 $27,988 $107,916 $ $670,687 Clinical or Non-Clinical $56,616 $19,835 $76,452 $ $347,291 Data and Chemistry & Manufacturing Clinical or Non-Clinical $47,709 $16,738 $64,447 $ $138,865 Data Only Comparative Studies $36,531 $12,689 $49,220 $ $78,261 Chemistry & $42,165 $14,772 $56,937 $ $48,150 Manufacturing Data Only Clinical or non-clinical $31,137 $10,831 $41,969 $ $25,413 data only, in support of safety updates to the labelling Labelling Only $10,216 $3,561 $13,777 $ $6,998 Labelling Only $1,422 $489 $1,911 $ $2,626 (Generic) Administrative $3,364 $1,167 $4,531 $ $1,690 Submission Disinfectants Full Review $1,262 $443 $1,705 $ $18,016 11
12 Activity Labelling Only (Disinfectant) Drug Identification Number Application Labelling Standard Program Total Avg. Hourly Rate Unit Cost $191 $67 $258 $ $3,276 $878 $305 $1,184 $ $2,112 Several fee categories have been changed and as a result some adjustments were made in calculating unit costs: The Prescription to Non-Prescription Switch fee category has been eliminated as a result of a low number of submissions received over the four-year period. Submissions were reassigned into the Clinical / Non-Clinical Only fee category, and are included in costing and level of effort data to calculate the unit cost for that fee. The Published Data fee category has been eliminated as a result of a low number of submissions received over the four-year period. Submissions relying on third-party data were included in the Clinical / Non-Clinical Only fee category, which has a comparable level of effort. Level of effort used to calculate unit costs for Labelling Only and DIN Labelling Standard was based on internal estimates derived from further analysis of the time tracking data. For these fee lines, the time tracking data did not adequately reflect the level of effort which will be required for these submissions in the future, given the recent requirements imposed by the Regulations Amending the Food and Drug Regulations (Labelling, Packaging and Brand Names of Drugs for Human Use). Costing and level of effort data for Labelling Only (Generics) were based on submissions identified through an internal survey of Labelling Only submissions. These submissions were in support of changes to the labelling to be in line with the Canadian Reference Product, but which did not include any additional labelling updates, as described in the Fee Proposal for Drugs and Medical Devices. An analysis of the Administrative Submissions led to the identification of a subgroup of submissions with a disproportionate level of effort. These disinfectant submissions were clearly more complex than Administrative Submissions but not complex enough to be included with Labelling Only submissions. As a result, a new fee category was created to allow Disinfectants Full Review submissions to be charged a fee consistent with the level of effort required to process and review. VETERINARY DRUG SUBMISSION EVALUATION For this fee line, all staff report all their time in the SAP PS time tracking system, and level of effort is recorded against each individual veterinary drug submission. However, data is not tracked against the individual submission components that are used to assess the associated fee. As a result, a slightly modified costing approach was taken for this fee line, where the overall costs of program delivery were determined and then factored against the submission components. As fees for veterinary drug submissions are component-based, unit costs for these submissions were not calculated. The total cost of the cost-recoverable activities for recent years was calculated, then compared to total revenue for those years to derive the actual cost recovery ratio, which was 12
13 approximately 15%. To adjust to the desired cost recovery ratio of 75%, existing fees were multiplied by a factor of 5. Submission evaluation fees not only support submission screening and review activities, but also other supporting activities. Pre-submission meetings are a service made available to submission sponsors who wish to seek regulatory or scientific guidance in advance of filing a submission, with the goal of filing higher quality submissions. Other essential activities which support submission evaluation include regulatory project management of submissions, coordination between review divisions, team meetings, preparation and issuance of regulatory correspondence, responding to industry inquiries, and the processing, acknowledgement and uploading of incoming submissions into the electronic repository. Table 3 of Activities under Veterinary Drug Submission Evaluation Activity Program ($ Total 000) Veterinary Drug Submission $21,338 $7,923 $29,260 Evaluation Veterinary Health Product Notification $964 $367 $1,331 ESTABLISHMENT LICENSING (EL) FEES ACTIVITIES AND COSTING Activities under the EL fee lines apply to active pharmaceutical ingredients (APIs), finished dosage form (FDF) drugs, veterinary drugs and medical devices. They include the following: Domestic Inspections: Health Canada inspects drug and medical devices establishments in Canada to help ensure that safety and quality standards are met before drugs and medical devices are sold to Canadians. Foreign Inspections: Health Canada conducts virtual and on-site inspections of foreign facilities exporting to Canada to achieve an appropriate level of regulatory oversight. Licensing and Billing: Health Canada processes applications in order to issue, amend, suspend, and review an EL which regulated parties must possess in order to conduct licensable activities. This includes review of Good Manufacturing Practices evidence, meetings with licence holders and discussion with international partners to ensure that regulatory standards are met. Laboratory Analyses: Health Canada laboratories proactively review the quality of authorized human drugs through its Drug Quality Surveillance Program, and perform chemical, microbial and other laboratory tests on drug products sampled during inspections. Laboratory analyses activities include the collection of products, the testing of methodologies from manufacturers and importers and of manufacturer testing protocols. Given oversight activities and level of effort are equivalent between product lines, there is no difference between fees for human and veterinary drug establishment licences. for human and veterinary drug establishment licensing were calculated together. 13
14 Table 4 of Activities under Medical Device Establishment Licensing Activity Program ($ 000) Medical Device Establishment Licence Total Volume Unit Cost $9,962 $2,890 $12,852 2,845 $4,503 Table 5 of Activities under Drug (Human, Veterinary) Establishment Licensing Activity Program Total Unit Cost Sterile Fabricator $30,132 $10,983 $41,114 Non-Sterile Fabricator $22,338 $8,142 $30,481 Packager/Labeller $4,355 $1,587 $5,942 Importer $23,265 $8,480 $31,745 Distributer $11,874 $4,328 $16,202 Wholesaler $7,219 $2,631 $9,851 Tester $19,868 $7,242 $27,109 RIGHT TO SELL (RTS) FEES ACTIVITIES AND COSTING The RTS fee supports the monitoring of a product for sale in Canada by supporting activities that uphold regulatory compliance. This includes post-market surveillance as well as product specific compliance and enforcement activities. Post-market surveillance activities include: Collecting and monitoring adverse reaction and medication incident data; Reviewing and analysing marketed product safety data, through: o Signal assessments early indicators or warnings of a potential safety problem between a product and an adverse event or incident), o Causality assessments possible relatedness between exposure to a medicine and an adverse event or device incident, o Ad-hoc reviews used to review safety information that Health Canada has requested from the market authorization holder, o Periodic Safety Update Reports (PSURs) standard reports used internationally by regulatory authorities to systematically monitor the safety of marketed drug products and medical devices, o Benefit-risk assessments requested when other regulatory interventions have been shown, or are expected to be unsuccessful in mitigating an identified risk and would be requested by means of invoking specific authorities in the Food and Drug Regulations; Product risk management and intervention, used once a risk has been identified, which may include interventions such as communicating risk information to health care professionals and the public, requesting product labelling changes, regulatory advertising interventions or recommending the removal of a product from the market; Advertising oversight, which verifies that the minimum standards in product advertising are met through the development of regulations, guidelines and policies. Also within the RTS fee lines, compliance and enforcement activities include: Compliance promotion, which includes providing information through various means to help regulated parties understand and comply with regulatory requirements (e.g., guidance 14
15 documents, targeted stakeholder notices, information updates, webinars, transparency initiatives, etc.). Compliance monitoring, which includes activities to monitor the compliance status of regulated parties through actions such as targeted inspections, border blitzes, product sampling, risk intelligence, international monitoring, and compliance monitoring projects. As part of compliance monitoring, Health Canada also conducts laboratory analyses of product samples. Health Canada inspects market authorization holders and importers to verify compliance with adverse drug reaction reporting requirements (good pharmacovigilance inspections). Risk Management includes taking actions to evaluate and mitigate against identified risks related to non-compliance with regulatory requirements, including product seizures, recalls, stop sale orders, warning, letters, import alerts, and investigations. Risk Communication include activities to communicate risks related to non-compliance to the general public through various communication products, via advisories and social media, and through openness and transparency initiatives. RTS fees also include activities to assess the regulatory compliance of products at the Canadian border, making recommendations to Canada Border Services Agency (CBSA) regarding entry of these products into Canada. For each product line (human drugs, veterinary drugs and medical devices), the total costs of all activities were calculated based on the four-year dataset, then annualized. Average annual expenditures for capital were then added to arrive at a total annual cost. This was then divided by the total number of annual product notifications to calculate the final unit cost. Table 6 of Activities under Medical Device Right to Sell Activity Post-Market Surveillance Program Total Program and Average Annual Program and Average Annual Capital Unit Cost $54,926 $16,998 $71,924 $17,981 $1,286 $556 Table 7 of Activities under Human Drug Right to Sell Activity Post-Market Surveillance Program Total Program and Average Annual Program and Average Annual Capital ($ 000) Unit Cost $181,919 $60,246 $242,165 $60,541 $11,672 $5,097 The following table gives a cost breakdown of the direct activities included in the Human Drug RTS fee line for the fiscal year. All costs in this table include both program and corporate costs. 15
16 Table 8 of Activities under Human Drug Right to Sell Activity Breakdown Activity Total Program and Adverse Drug Reaction Processing $5,353 Border Integrity $4,727 Causality Assessment $552 Compliance Verification (incl. Drug Shortages) $8,510 Drug Safety and Effectiveness Network $642 Good Pharmacovigilance Practice Inspections $641 Investigation $467 Lab Analysis $1,802 Management $1,280 Medical Incident Analysis $280 Periodic Safety Update Reports $3,728 Regulatory Activities $3,686 Risk Communication $1,674 Risk Management Plan $8,596 Signal Assessment $6,288 Signal Detection $10,832 Other $1,010 The following table gives the total cost of the Veterinary Drug RTS fee line for the fiscal year. Table 9 of Activities under Veterinary Drug Right to Sell Activity Post-Market Surveillance Program Total Average Annual Unit Cost $2,626 $799 $3,426 $856 $622 FUTHER INFORMATION For further information on the details of revised fees, please consult the Fee Proposal for Drugs and Medical Devices. The consultation period for this proposal closes January 4, Health Canada welcomes any comments on the proposal and/or on this costing document. Please send all comments to CRI_IRC_Consultations@hc-sc.gc.ca. 16
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