Support for Innovation

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Vision in Brief:

Consumer Health Products Canada and its member companies are seeking a regulatory climate that rewards innovation. When this vision is achieved, consumers will see their self-care options greatly expand as product knowledge and selection will improve and grow.

Summary:

Where would we be today without innovation? We certainly would not have the medical knowledge or the health products that we have today. Innovation benefits everyone, from the ordinary citizen to the innovator and the country in which the innovation is developed. While innovation requires significant human and financial resources, it pays dividends in the end.

Canada is lagging behind our major trading partners - notably the European Union and the United States - in setting a regulatory climate that rewards innovation in the consumer health products industry. Regulatory barriers and the lack of incentives stifle innovation in this industry. As a result, Canadians do not have access to some of the self-care products that are available in other countries, Canada is missing out on potential economic benefits to the health care system, and it is failing to attract R&D investors to Canadian industries.

Canada's consumer health products industry has much to offer in terms of developing new and innovative self-care products and discovering new uses for existing self-care products, but the Canadian government could make it much easier for the industry to do so, for the benefit of all Canadians.

Vision in Detail:

Currently there are no regulatory incentives in place to reward companies for developing an innovative consumer health product for Canadians or in discovering new uses for existing products. If a company develops an innovative new product or discovers a new use for an existing product, another company can also market a copy of that product or use the same claim, simply by piggy-backing on the innovator's research and development. This is very discouraging for the company that put significant financial and human resources into the innovation.

Over time, Canadian companies will become less competitive in developing new products for self-care, which in turn, has a negative impact on consumers as product selection will not improve and grow.

In addition, CHP Canada research has demonstrated that switching a product from prescription to over-the-counter status can significantly reduce Canadian healthcare costs. Switching a product can include everything from conducting research to determine that a prescription product can be safely used without the intervention of a health professional, to determining that a lower dosage or a variation of a prescription product can be used for self-care. Given that making more products available for self-care can save the health care system money, the government should be creating incentives for research in this area.

The regulatory process that the government must follow is also an impediment to switching products. Once a government committee approves the switch application, it can take more than a year before the switch clears all the administrative hurdles. The regulatory process for switching products needs to be re-evaluated to find greater efficiencies without compromising the safety of Canadians.

The lack of incentives for innovation hurts Canada's overall economy as well. Currently, Canada is lagging behind its major trading partners - notably the European Union and the United States - in setting a regulatory climate that rewards innovation through market exclusivity provisions. To remain globally competitive in attracting research investment and providing Canadians with innovative consumer health products, Canada must ensure that the regulatory environment encourages innovation, rather than penalize it.

The Solution:

CHP Canada recommends that industry innovators be granted a period of market exclusivity as a reward for being leaders in developing new and innovative consumer health products for Canadians.

CHP Canada Success to Date:

  • CHP Canada was successful at having regulations amended to allow all consumer health products to make risk reduction and prevention claims for ailments - provided the claim is supported by appropriate evidence - that they previously were unable to make (2008). Being able to make claims for these additional ailments provides companies with an incentive to conduct research to support their new claims. The next step is to secure market exclusivity for these innovations to encourage them to be competitive in being the first to market.
  • The Association was also successful in having modifications made to the process for removing an ingredient from Schedule F (prescription drug list), which reduced the regulatory process for switching ingredients to consumer access to 14 months from the previous 18-24 months. However, more efficiencies need to be identified to further reduce this lengthy administrative process.

CHP Canada in Action:

  • CHP Canada is lobbying Health Canada to include innovation incentives for the consumer health products industry in a modernized consumer health products regulatory framework.
  • The Association is developing a research and policy paper outlining the benefits to consumers and the Canadian healthcare system of supporting innovation in switch initiatives.
  • As a first step towards developing this paper, CHP Canada organized a symposium where representatives from government, the health care professions, and industry provided insights to the issues that affect prescription to over-the-counter switch in Canada. Further stakeholder conferences are planned at various steps in the process.