Higher Canadian Device User Fees Possible

Government officials in Canada claim the medical device manufacturing costs there are the lowest of the world’s largest industrialized nations. That standing may not last much longer, though.

A proposal recently tabled by the Canadian Parliament more than triples device user fees, increasing the proportion the private sector pays to 50 percent. Health Canada has proposed increases to both its annual Medical Device Authority to Sell (MDATS) fee and Medical Device Establishment License (MDEL); the MDEL would jump from $2,120 to $7,200, while the MDATS fee would go from $100 to $300.

According to the proposal, Canada’s current user fees cover less than a quarter of the expense of regulating medical devices. The increases would generate an additional $65.4 million for the government in the first year, and about $53 million in 2010-11.

Executives with Canada’s medical device trade group have voiced their opposition to the increases, saying the proposal would “put at risk future access to innovations for patients and healthcare providers across the country.” It also could make the Canadian market less attractive to foreign device manufacturers, they added.

“We believe with the current proposal Health Canada is attempting to achieve ‘too much too fast,'” Klaus Stitz, vice president of regulatory affairs for MEDEC (Canada’s device trade group), stated in a recent letter to the government’s Standing Committee on Social Affairs, Science and Technology. “The fee increases stipulated (up to 350 percent) are unprecedented and far out of proportion. We are concerned that if implemented they will significantly weaken Canada’s competitiveness and ability to attract innovative technologies in the future. The fee increases will eventually lead to price increases paid for by the Provinces, who are the buyers of most Medical Technology in order to meet the responsibility of providing healthcare to citizens, and by Canadian patients directly.”

Stitz said MEDEC would agree to fee increases under certain conditions. First, Health Canada must eliminate the backlog in the medical device pre-market review process within two years (by the end of 2012). The agency also must put in place accounting practices that produce an annual report of incoming funds and money spent on pre-market versus post-market activities, and make that report available to the public. In addition, the MDATS fee should be set at $215 (no mitigation and no exceptions for non-profits or charity groups that market their own products), and the MDEL charge should be set at $2,750 (a 30 percent increase).

“We are convinced that this is a fair compromise in recognition of the actual contributions of the Canadian medical devices industry to the advancement of medical technology to the benefit of Canadian patients, the healthcare system, and the Canadian economy,” Stitz concluded.