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Life Sciences Team

Effective September 13, 2001, products regulated under the Canadian Food and Drugs Act (pharmaceuticals, biologics, medical devices, natural health products, foods and cosmetics) are subject to the New Substances Notification Regulations (the "NSN Regulations") under the Canadian Environmental Protection Act, 1999 ("CEPA").

Confusion reigns rampant as neither Environment Canada nor Health Canada have a clear idea of how to reconcile their separate approval schemes. Legal opinions are being sought by the government as to transitional measures, such as whether the NSN Regulations apply to New Drug Submissions awaiting approval. Health Canada expects to issue a guide for the industry by the end of October. It is to be hoped that this guide will address issues such as whether the NSN Regulations are triggered by the manufacture/import of drugs for clinical trials or only by the filing of a New Drug Submission.

Background

The CEPA is Canada's primary piece of environmental legislation. The NSN Regulations prescribe information requirements that companies must submit for substances that are considered "new" to Canada. All substances that are not listed on the Domestic Substances List (the "DSL") are deemed to be "new". The purpose of the environmental assessment of new substances is to ensure that no substance is introduced into Canada before its toxicity to human health and/or the environment is assessed.

Prior to September 13th, substances manufactured or imported for a use that was regulated under any other Act of Parliament requiring notice to be given and toxicity to be assessed prior to the manufacture, import or sale of the substance were exempt from the NSN Regulations. Effective September 13th, the CEPA was amended and the exemption was narrowed to those products regulated under a list of statutes set out in a schedule to the CEPA. As of September 13, 2001, only products regulated under the following statutes and their regulations were exempted from CEPA review: the Pest Control Products Act; Feeds Act; Fertilizers Act; Seeds Act; and Health of Animals Act. Health Canada had been given a two-year deadline to enact regulations satisfactory to Environment Canada that would provide for an assessment of the risk to the environment from products subject to the Food and Drugs Act and the industry had expected that the Food and Drugs Act would be added to the exempt list. The Food and Drugs Act was not scheduled, as it was decided that Health Canada's required assessments for safety and efficacy were insufficient to identify risks to the environment. The rationale for the decision was the apparent discovery by international monitoring that certain substances contained in food and drug products were present at detectable levels in the environment.

Therefore, as of September 13, 2001, new substances in products regulated under the Food and Drugs Act are also subject to the NSN Regulations.

Health Canada's Response

In response to these changes, Health Canada is proposing the development of new regulations, expected to be in force in the fall of 2003, and is developing an approach to facilitate the transition to a new regulatory regime. The new regulations would define the information and reporting steps required to perform adequate and diligent review of products so that appropriate environmental assessments can be undertaken. However, Health Canada's response does not exempt the industry from complying with the NSN Regulations pending implementation of Health Canada's regulations. In the interim, several policy decisions are being developed by Health Canada to give the industry guidance on its regulatory obligations until the new environmental assessment regulations can be put in place. Health Canada is expected to publish a guide for the industry summarizing its position by the end of October, to be available on its website at http://www.hc-sc.gc.ca/ear-ree/.

How Will These Changes Affect Canadian Manufacturers and Distributors of Products Subject To The Food and Drugs Act?

As of September 13, 2001, companies seeking approval to import and manufacture products regulated by the Food and Drugs Act containing "new" substances (i.e. substances not on the DSL) may need to notify the Minister of the Environment under the NSN Regulations. The notification provisions are based on the importation/manufacture of certain quantities of the new substance. These new substances will be assessed by Environment Canada for effects on the environment as well as by Health Canada for effects on human health under its statutory mandate under the Food and Drugs Act.

It has been decided that products regulated under the Food and Drugs Act that were on the market prior to September 14, 2001 will be assessed under the new Health Canada environmental assessment regulations, once these are developed. However, in a news release dated September 4, 2001, Health Canada warned that "immediate and appropriate action will be taken if, at any time during this parallel process of research and developing new regulations, products are deemed to be hazardous to human health or to the environment". Caught in the middle of this changing regulatory regime are companies who submitted new drug submissions, medical device licence applications or novel food applications or who were conducting clinical trials prior to September 14, 2001 but to whom regulatory approvals have not yet been issued. Neither Environment Canada nor Health Canada has given any indication as to the obligations of these companies.

In the interim, any substances that can be shown to have been on the market prior to December 1986 will be nominated to the DSL. Health Canada has prepared a list of such substances, and others which, in Health Canada's opinion, have been sufficiently assessed for toxicity to the environment and has provided that list to Environment Canada.

Until more clarification is forthcoming from the government, companies that are concerned about products currently on the market or that propose to enter the market with new products should take the following steps:

1. Determine whether the product contains a "new" substance. A "new" substance could be a chemical, a polymer or an organism and is defined as any substance not currently listed on the DSL at http://www.ec.gc.ca/cceb1/nsd/download/DSL.pdf (for Chemicals and Polymers) and at http://www.ec.gc.ca/cceb1/nsd/download/biolist.pdf (for Organisms).
2. If the substance is not listed on the DSL, determine if it is listed on the Non-Domestic Substances List (the "NDSL") at http://www.ec.gc.ca/cceb1/nsd/download/NDSL.pdf. Substances listed on the NDSL may enjoy certain exemptions from the NSN Regulations if the relevant quantities manufactured or imported are within prescribed limits. The NDSL is based on the United States Environmental Protection Agency's Toxic Substances Control Act Chemical Substances Inventory.
3. If the substance is not on the DSL or the NDSL, contact Health Canada to inquire whether the substance has been nominated to the DSL by Health Canada. If proof exists that the substance was on the Canadian market prior to December of 1986, it should be possible to have the substance nominated to the DSL.
4. If the substance in question has not been nominated to the DSL by Health Canada and was not on the Canadian market prior to December of 1986, then:

Date First Available on the Canadian Market	Assessment Required
January 1987 - September 13, 2001	New substances will be assessed under Health Canada's environmental assessment regulations, once finalized (expected in 2003)
For all other products	New substances will be subject to notification and assessment under the NSN Regulations of the CEPA

Under the NSN Regulations, any person in Canada who manufactures or imports a new substance must provide a notification package to Environment Canada, containing all the information specified in the NSN Regulations at http://www2.ec.gc.ca/cceb1/nsd/eng/reporting_e.htm. Based on this information, an assessment will be conducted to determine whether the substance is likely to harm the environment. Substances manufactured or imported in a quantity below the maximums prescribed are exempt from the NSN Regulations.

It is to be hoped that the information required to be submitted under the NSN Regulations will be similar in many respects to information required in the United States under the FDA environmental assessment procedures at http://www.access.gpo.gov/nara/cfr/waisidx_99/21cfr25_99.html, and may be readily available for many companies. As part of its guidance to the industry, Health Canada is conducting a comparison between the two regimes.

At this time, there are no fees associated with notification or assessment under the NSN Regulations, however a cost recovery initiative has been proposed and is in the process of being considered. It is important to note that there are requirements for claiming confidentiality for the information provided to Environment Canada under the CEPA.

Under the terms of the NSN Regulations, the information that must be provided, as well as the information provision dates and the assessment periods, varies according to the type of substance concerned and/or the quantity that is produced or imported. Therefore, it becomes important to determine if the concerned substance is a polymer, an organism, or another type of substance.

The information provision dates will vary from five (5) to ninety (90) days before the date on which a person manufactures or imports a substance in a quantity that triggers the requirement to provide the information specified in the applicable schedule. The assessment periods will vary from five (5) to ninety (90) days following receipt of the information, depending on the applicable schedule.

For more detailed information on the NSN Regulations, including the prescribed information to be submitted to Environment Canada, guidelines are available at http://www.ec.gc.ca/cceb1/nsd/eng/gui_e.htm.

Industry members may also wish to provide input and prepare submissions with respect to Health Canada's proposals for environmental assessment. Health Canada is soliciting comments on the scope and applicability of this regulatory initiative, the issues which the regulations should address, and how interested parties would like to be involved and informed during the development of the regulations. Further information and updates can be found on Health Canada's Environmental Assessment Regulations website located at www.hc-sc.gc.ca/ear-ree. The deadline for submission of comments is October 31, 2001.

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