EMERGO SUMMARY OF KEY POINTS:

• Health Canada wants to implement Medical Device License application fee increases for Class II, III and IV medical device registrants.
• MDL fees have not been significantly adjusted since 2011, according to Health Canada.
• If implemented, these major MDL fee increases could complicate Canadian market entry for many medical device companies.

Canadian medical device regulator Health Canada has proposed raising Medical Device License (MDL) application fees by nearly 60% for Class II devices and by more than double for Class III devices, potentially raising the cost of Canadian market entry substantially for manufacturers.

Health Canada’s new fee proposal for devices and drugs notes that the regulator has not adjusted market authorization fees since 2011, necessitating increases to address current operating costs. Health Canada would set new fees at 90% to 100% of actual costs, and tie annual fee adjustments to the previous year’s Consumer Price Index; currently, Health Canada fees are adjusted two percent every April. The proposal would also give Health Canada the authority to withdraw approval or review of applications if fees are unpaid, and sets an annual schedule whereby fees undergo review and adjustment.

Steep MDL fee hikes for all device classes

Health Canada has proposed significant fee increases for MDL applications and amendments for Class II, III and IV devices; the regulator claims that these increases are necessary to address major resources and workloads necessary for processing applications and lower administrative burdens.

Along with these fee increases, Health Canada also seeks the ability to charge full fees up front before application reviews get underway; currently, MDL applicants have the option of paying 75% of their fees upon submission to Health Canada and then the remaining 25% when their reviews are concluded. The revised policy would reflect similar approaches by medical device regulators in the US, Europe and Australia, notes Health Canada.

Proposed Health Canada fee increases are listed below, in Canadian dollars:

Fees for Medical Device Establishments Licenses (MDEL) required for low-risk Class I devices, however, would decrease by nearly half under Health Canada’s proposed new pricing, from $8,109 currently to $4,500.

Small business waiver options

Acknowledging that its proposed across-the-board and in some cases massive MDL fee increases will affect smaller market registrants most heavily, Health Canada also plans a small business waiver option for qualifying manufacturers.

Any company that has less than 100 employees or between $30,000 and $5 million in annual gross revenues would not have to pay a registration fee larger than $10,000 for its first premarket submission in Canada. Qualification for the waiver requires applicants to provide breakdowns of its staff numbers over the past 12 months prior to MDL application, as well as certified financial statements attesting to overall revenue figures.

New barriers to Canadian market entry?

Health Canada is seeking stakeholder comments on its proposed fee increases through January 4, 2018. Assuming these new fees go into effect next year, many prospective Canadian market registrants may think twice about pursuing MDL approval considering the much heftier price tags.

“In December 2015 Health Canada announced that it will replacing the existing CMDCAS system with the MDSAP (Medical Device Single Audit Program) system and will also move from the ISO 13485:2003 standard to the ISO 13485:2016 standard,” says Daryl Wisdahl, Director of QA/RA at Emergo.

“Manufacturers are currently seeing substantial increases in fees associated with maintaining their ISO quality management system certifications. The combined impact of the proposed MDL fees and the increased quality system certification fees may lead to some companies opting out of making their devices available for sale in Canada.”

Additional Health Canada regulatory resources:

• Health Canada MDL and MDEL registration consulting
• CMDCAS, MDSAP and Health Canada ISO 13485 quality system compliance support
• Canadian medical device classification consulting
• Whitepaper: Preparing a Canadian MDL application
• Regulatory process chart: Health Canada regulatory approval