3 Ways Health Canada Could Simplify Compliance for Medical Device Companies
I have prepared hundreds of medical device submissions for Health Canada over the years. Low risk devices, high risk devices and everything in between. While Health Canada offers a well-documented path to compliance and is generally very competent, there are some keys areas that continue to confound device companies and that could be improved.
Improvement #1: Clarify MDEL fee requirements
Manufacturers of low-risk Class I medical devices must obtain Medical Device Establishment Licenses (MDEL) in order to sell in Canada. While the MDEL application process and Health Canada requirements are fairly straightforward, the process by which MDEL holders determine if and when to pay license fees needs more transparency.
- Health Canada typically bases MDEL fees on either a flat-based fee (approximately CAD$7,800) or on one percent of a firm’s sales revenues for the device covered by the MDEL. However, when a company first applies for an MDEL, that firm has not completed a full calendar year with the license; therefore, Health Canada requires you to delay payment of the initial license fee until your company has completed a full calendar year, which based on the timing of the issuance of your license can be in excess of 18 months.
- Further complicating this situation is the fact that some firms may have to renew their MDELs before they’ve made a single payment to Health Canada, and again these firms may still not be able to pay renewal fees because they have yet to complete a full calendar year.
- Every April, Health Canada raises their licensing fees by 2%, making it even more challenging for MDEL holders to determine when and how much to pay.
- Health Canada requires MDEL holders to consider their worldwide sales—not just their sales in Canada—when calculating their 1% license fees. If a company’s revenues from other markets are larger than what it earns in the Canadian market, that firm must nonetheless pay 1% of its total sales to Health Canada; these firms are being penalized because they are unable to sell more in Canada, which may have nothing to do with firms’ intentions and everything to do with restrictions placed upon them by other entities—insurance, reimbursement rates, etc. Is this fair?
So how could Health Canada make MDEL fees easier to calculate and more equitable? Canadian regulators should consider the licensing fee structures implemented by the US Food and Drug Administration for a good example. The US regulator has set a flat fee for all US market registrants regardless of their size or sales. Each US registrant must pay US$3,845 for the right to sell in the US, and that payment must be made before a registration is processed.
A similar process in place at Health Canada would clear up much confusion and frustration for MDEL applicants and holders.
Improvement #2: Make Health Canada databases easier to use
Health Canada maintains two medical device databases. The first is a very simple, online searchable database which allows users to search for licensed Class II, III and IV devices and manufacturers, but with very limited search parameters.
The second database allows users to search for MDEL holders, but also with limited search parameters.
Again, the US FDA provides an example of more effective and usable medical device databases that Health Canada would do well to emulate. The FDA maintains a much more useful database for manufacturers, distributors and even the agency’s own staff. Canadian regulators should evaluate the features and functionality of the FDA database in order to develop and implement a similar system for their market. Health Canada could create a near exact replica of the databases that FDA has in place, perhaps employing the same programmers that FDA has used to “drop” the same system into Canada, and this should not come with a big price tag.
Improvement #3: Update guidance documents
Finally, how Canadian regulators releases and maintains guidance documents it publishes to assist device manufacturers and reviewers can often prove a source of confusion. Many Health Canada guidance documents are outdated, have never been officially released, or both.
Guidance documents such as the Keyword Index to Assist Manufacturers in Verifying the Class of Medical Devices (from 2006) and Guidance for the Interpretation of Sections 28 to 31: Licence Application Type (from 1999) are still widely used as reference tools today, even though updates to such guidances are greatly needed by industry as well as regulators.
Updating guidance documents may require additional resources that Health Canada currently does not have. However, Canadian regulators should look to other agencies in the US, Europe and Australia to see how those entities manage their guidance publication and updating processes. Could those processes be easily replicated in Canada? If internal resources are an issue, could Health Canada bring in contractors tasked solely with drafting updates to existing guidance documents? Considering how depdendent license applicants are on these documents, it’s worth the effort.
Conclusion: Minor tweaks could yield major benefits
Addressing the issues mentioned above would not require major costs or effort on the part of Health Canada. Minor adjustments to the regulator’s existing MDEL fee structure, medical device license databases and guidance document maintenance system would provide greater efficiency and transparency for both Health Canada and medical device registrants alike.
About the author
Daryl Wisdahl is Managing Director of Emergo’s business in Canada. With more than 20 years of experience in the medical device industry, he has previously held senior quality assurance and regulatory affairs roles at Urodynamix Technologies, VSM MedTech and Xillix Technologies.