Initial Health Canada proposals to increase service fees for veterinary drug approvals and reviews could drastically increase the cost of products for livestock producers, a recent study indicates.
Fees charged to veterinary drug makers could increase 39 to 500 percent if current fee proposals go into effect as planned in April 2019, according to a study commissioned by the Canadian Animal Health Institute.
Higher fees could discourage drug manufacturers and distributors from registering drugs in Canada or seeking the necessary re-approvals, the study said. That would result in livestock producers not having access to the most effective treatments for their animals, making it an animal welfare issue as well as one of market competitiveness.
“You can’t just go and put fee structures in that will cause companies to say, ‘well, we could never possibly recover our costs out of marketing products in the Canadian market with these fees, so we’re just not even going to bother trying to get registration for the Canadian market,’ ” said Al Mussell of Agri-Food Economic Systems, who wrote the study along with colleague Douglas Hedley.
The paper suggests that the proposed fee increases would result in fewer animal health products coming to the Canadian market, particularly those for minor species because the number of animals is not large enough to warrant registration expense.
“Inability to access animal health products could hurt the health status of food animals, result in the substitution of unlicensed product as a means of keeping animals healthy and as a result bring into question the phytosanitary standards of Canadian food animal exports,” said the report’s executive summary.
CAHI president Jean Szkotnicki said last week she is fairly confident that Health Canada plans to revise its fee proposals and believes a new set of proposals might be presented later this month or in May.
In the meantime, she said it is important to keep the issue in the public eye to ensure a full range of livestock treatments remains available to Canadians.
CAHI represents developers, manufacturers and distributors of animal health products in Canada.
Szkotnicki said many members of the organization do not have the sales thresholds that would justify increased costs for submitting new drugs for review or for annual licensing costs to keep them in the marketplace.
Passing those costs to pet owners and producers is not a likely option, she added.
“I think if drug costs are too high, we often have the animal owner considering a number of different avenues,” she said.
Those include failure to treat, finding alternative products that may not be licensed or ultimately euthanasia.
If effective treatment options are not available to Canadian livestock producers, it could affect international trade, she added. Animal health status and disease control are vital to the country’s trade reputation and export ability.
Mussell said in an interview and in the report that Canada’s animal health status is “really quite outstanding” and requires constant attention from producers.
“We’ve got very good animal health status, but boy, that’s hard earned because we’re combating bugs all the time,” he said.
“We need our veterinary infrastructure. We need management practices that act in a preventative role.”
Trade agreements that increase the opportunity for meat exports are dependent on animal health status, he added. That same status is important to maintain trade already established.
“The red meat segments of livestock in Canada exist in a deeply integrated North American market in hogs-pork and cattle-beef that has developed over almost 30 years,” the report said.
“Canada’s high animal health status has been a crucial element of success in this environment.”
Szkotnicki said Health Canada is aiming to recover the costs associated with drug approvals and licensing and says the fee proposals will benefit private industry. However, she thinks the department needs to recognize the public good derived from having an array of treatment options, especially considering that most emerging diseases in people come from animals.
The fee proposals would also affect treatments available for companion animals including dogs, cats and horses, the report said.