A “loophole” that creates a major headache for Canada’s animal drug manufacturers is getting worse, the industry says.
When industry representatives sat down a little more than a year ago with Canadian Food Inspection Agency officials, they complained about a loophole that allows more than 20 percent of the Canadian market to be filled by unregulated imported animal drug products.
A 2007 study prepared for the Canadian Animal Health Institute (CAHI) and the International Federation of Animal Health estimated that more than $100 million worth of unregulated and unregistered foreign veterinarian drugs are brought into Canada each year.
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“That’s over 20 percent of a $500 million market, and if you take out biologics, it is larger,” said CAHI president Jean Szkotnicki.
The problem has grown in the past year, she added.
“The rise in the Canadian dollar has made it much, much worse.”
CAHI said Canadian sales of endectocide fell 75.8 percent and beef implants by 11.5 percent from 2002 to 2007, when the value of the dollar rose from 64 cents to parity with the U.S. dollar. A more valuable dollar made American products cheaper to buy and bring across the border.
The main issue is a longstanding “own use” import rule that originally was meant to allow companion animal owners to bring in medicines but over the years has increasingly been used by farmers and feedlot owners.
“If you have a 55,000 head feedlot, you can bring in pharmaceuticals for them all,” Szkotnicki said.
“Some do.”
CAHI said the import of unlicensed and unregulated foreign drugs undermines customer confidence in Canadian food safety and discourages manufacturers from investing in Canada.
Based on CFIA briefing notes prepared for a meeting with the industry last year and obtained by researcher Ken Rubin under access to information rules, there apparently is sympathy for that argument within Health Canada, which houses the Veterinary Drugs Directorate.
However, the cattle industry is opposed.
“HC Veterinary Drugs Directorate is working to close the regulatory loopholes, but livestock producers have been opposed because they are concerned that it will reduce their options for sourcing animal health products and result in increased costs for licensed products,” CFIA officials wrote in preparation for the meeting.
The study prepared for CAHI concluded that compared to rules governing the industry in the European Union, the United States, Australia and Japan, Canada’s regulatory system burdens the industry with higher costs, slower product approval times and a regulatory climate of caution that often morphs into risk aversion.
A survey of Canadian animal health product manufacturers produced harsh criticism of the Veterinary Drugs Directorate (VDD) for the quality and training of its staff, the unpredictability of its decisions and the undue caution and slowness of its decision-makers. Several years ago during controversy over whether to approve a bovine growth hormone product manufactured by Monsanto, the VDD was often accused of being too close to the industry.
“The agency has experienced significant failings for nearly 20 years,” said the 2007 report based on interviews with industry leaders.
“Performance has been poor since the late 1980s and problems have not been resolved. This is, companies argue, partially a failure of management.”
The industry also complained about a regulatory loophole that allows veterinarians and pharmacists to prepare unlicensed and unregulated products in Canada by mixing imported active pharmaceutical ingredients.
Szkotnicki said there still are problems within the directorate, but there also have been improvements.
The backlog of products under assessment is being cleared, and an impending report after consultations on some of the problems is expected to recommend some improvements, she said.
Importers of active ingredients may have to be licensed as part of a Health Canada effort to improve the traceability of the flow of the material into the country where it is mixed into product.
However, she does not expect any movement on the largest problem facing the industry – competition from unlicensed imports.
The industry report made it clear that is the key issue.
“Canada’s market for unregulated products needs to be closed,” it said.
“This may require changes in primary law but it is essential if the competitiveness of the animal health industry is to be restored and citizens are to be protected fully against risks to human health, animal welfare and the environment.”
