Industry Consultation on International Regulatory Cooperation

Help on accessing alternative formats, such as Portable Document Format (PDF), Microsoft Word and PowerPoint (PPT) files, can be obtained in the alternate format help section.

Contact: Policy Bureau Enquiries

---

Please note that draft guidance documents are only made available in English

Veuillez prendre note que les lignes directrices provisoires ne son offertes qu'en anglais

---

Industry Consultation on International
Regulatory Cooperation

Preliminary Results

Alain St-Pierre
International Policy Division
Bureau of Policy and Coordination

Purpose of Consultation

• Obtain the opinion of the Canadian therapeutic product industry on international trade and regulatory environment
• Give the TPP an idea of the types and the scope of future international agreements and with which countries these agreements could be developed
• Assist the TPP for the planning of future international activities

Approach

• Consultation took place between December 1998 and January 1999 by means of a questionnaire sent to the headquarters of approximately 500 therapeutic product companies
• Response rate was 31% as of April 1999, date at which data capture/processing began
• While the questionnaire respects recognized methodological principles, it is not a scientific survey and is not intended to be used as such

Summary of Results

• Majority of respondents are insufficiently informed of the TPP's international activities
  
  
• TPP's international involvement considered important by a great majority among all groups
  
  
• Harmonization and development of international agreements are the most preferred types of future international involvements
  
  
• Priority countries for international agreements:
  - US, EU, Japan, Australia, Latin America, China and other Asian
  
  
• Preferred types of international agreements:
  - MRA and MMR overall most preferred types of agreements
  - MOC and MOU mostly for nontraditional markets
  
  
• Preferred fields of regulatory activity for agreements:
  - Pre-market review
  - Establishment licensing/quality system audits

About Our Stakeholders ... The Respondents

In Which Therapeutic Product Sector Are Respondents Involved?

• Most respondents are involved in medical device (51%) and drugs (42%) sectors
  
  
• 18% of respondents involved in more than one sector
  
  
• Sample coverage:
  
  - Medical devices sector: 10% of approximately 800 firms (ref. Competitiveness Framework Series, Strategis)
  
  - Drugs sector: 60% of total 106 pharmaceutical firms (ref. Canadian International Business Strategy, Strategis)

In Which Therapeutic Product Sector Are Respondents Involved?

• In terms of gross revenues from sales of therapeutic products
  
  - 64% of sample revenues are generated by drug sales
  - 21% by medical devices
  - 14% by natural health products
  
  
• Out of an estimated total of $6.9 billion of TP revenues
  
  
• Sample weight:
  
  - Declared drug sales represent approximately 85% of Canadian pharmaceutical production (estimated $5.1 billion in 1997)
  - As for medical devices, close to 50% of Canadian production (estimated $3.0 billion in 1997)

Where Are They Established?

• Almost 60% of respondents have establishments in Ontario compared to 34% in Quebec
  
  
• About 1/3 of establishments in Ontario and Quebec are located in the metropolitan areas of Toronto and Montreal
  
  
• Geographic distribution of medical device and drug firms are comparable
  
  
• As for natural health product firms, far less concentrated in Ontario, more in Quebec and in other provinces

What Are Their Size and Country of Ownership?

- Great majority (92%) of respondents are small or medium sized firms

- About half (53%) of respondents are Canadian-owned firms

What Are Their Size and Country of Ownership?

- Medical device and natural health product (NHP) sectors:
Respondents mostly small Canadian-owned firms

- Drugs sector:
Respondents mostly medium sized or large foreign-owned firms

What are Their Main Activities?

• Main activities are distribution as well as fabrication and/or importation of TPs
  
  
• 40% of respondents involved in more than one activity
  
  
• Small differences among product sectors
  
  - Medical devices: fabrication surpasses distribution
  - Drugs: importation as common as fabrication
  - Natural health products: distribution more prevalent

How Many Are Involved in International Trade?

• Overall, almost 90% of respondents are involved in international trade
  
  - 69% import therapeutic products
  - 52% export therapeutic products
  - 89% do one of the previous or both
  
  
• Natural Health product (NHP) sector has greatest share of those not involved in international trade
  
  
• Drug sector has smallest share of those who export only

About the TPP ... Stakeholders' Views on Us

Are Respondents Sufficiently Informed of the TPP's International Involvement?

• Majority of respondents (58%) consider themselves slightly or not informed of the TPPs international involvement
  
  
• Some groups seem better informed:
  - Large and medium sized firms
  - Foreign owned firms

How Can TPP Improve Communication of International Activities?

• Suggestions as to means:
  - Newsletters by mail, fax or e-mail on regular basis
  - Updates or notices posted on the Web Site
  - Communication at events such as seminars, symposia, conferences and meetings
  
  
• Also, suggestions as to type/format:
  - Calendar or summary of current and future activities/events
  - Strategic information such as issues, goals, implications and priorities

Is International Involvement Considered Important for the TPP?

• Great majority (92%) of respondents consider important that the TPP be involved internationally
  
  
• Industry ratings are consistently high among firm and product categories

Views on the TPP's Regulatory Framework

• Unique (low value added) Canadian requirements/standards not recognized abroad... considered by some as key impediment to trade
• Slow review/authorization times compared to others
• User fees/cost recovery structure considered inadequate and unfair, specially for SMEs
• Lack of internal uniformity/consistency
• Lack of collaboration with other authorities
• Inadequate TPP expertise/skills, specially dealing with biotech products

About the Current International Trade and Regulatory Environment

What Are the Major Regulatory Issues?

• At the forefront:
  - Lack of harmonization
  - Lack of mutual recognition
  - Slow review/authorization times
  - Canadian acceptance of foreign decisions (i.e. FDA, EC)
  
  
• Also, a number of other issues that stand out of which:
  - Product classification and labeling
  - User fees/cost structure
  - The TPP's internal uniformity or consistency

What Are the Key Regulatory Impediments to Trade?

• Most mentioned are:
  - Lack of harmonization
  - Excessive regulatory requirements
  - Tariffs/duties
  - Unequal standards (leading in some cases to unfair trade practices e.g. illegal importation of US NHPs)
  
  
• Also, some specific mention of:
  - TPP's failure to accept foreign decisions (i.e. FDA, EC)
  - Slow review/authorization times
  - Unique (low value added) Canadian requirements/standards... not recognized abroad

Lack of Harmonization: Specific Concerns

• To many different standards and requirements
  - Agreement to accept only one set of international standards and requirements (e.g. ISO/IEC)
  - Common standards or uniformity of standards internationally
  
  
• Harmonization efforts should be directed towards
  - Establishment licensing/audits
  - Advancing ICH/CTD
  - Creation of a single universally recognized approval process

About Our International Activities

What Are the Preferred Types of Future International Involvement?

• Preferences regarding types of future international involvement, in order:
  - Harmonization
  - Development of international agreements (i.e. MRA, MMR, MOU or MOC)
  - Participation in fora for exchanging information
  - Providing training to regulatory authorities in developing countries
  
  
• Order of preferences consistent among product categories and also firm categories (not shown)

What Is the Rational for Developing International Agreements?

• Two most highly rated reasons also considered most important:
  - To harmonize regulatory requirements
  - To obtain faster product market authorizations
  
  
• High ratings for all suggested reasons with one exception:
  - Technical assistance to foreign authorities
  
  
• Similar ratings among therapeutic product sectors and firm categories (not shown)

With Which Countries Should We Develop International Agreements?

• Most often mentioned in the first 4 ranking positions are US, EU, Japan and Australia
• Fifth ranking position is shared by Latin America, China and other Asian countries
• Among firm and product categories
  - US and EU consistently win 1st and 2nd ranking positions
  - Japan and Australia alternate between 3rd and 4th
  - China, other Asian and Latin America take turns for 5th ranking position

What Are the Preferred Types of International Agreements?

• When asked what type(s) of agreement(s) should TPP develop with each country
• Mutual Recognition Agreement (MRA) and Memorandum of Mutual Recognition (MMR) good first in all ranking positions
• Memorandum of Cooperation (MOC) and Memorandum of Understanding (MOU) far behind

What Are the Preferred Types of International Agreements?

• Overall, relative occurrences of agreements are:
  - MRA (42%) and MMR (39%) for a combined 81%
  - MOC (10%) and MOU (9%) for a combined 19%
  
  
• Noted variations in combined MOC-MOU share among:
  - Ranking positions: Grows consistently from 16% in 1st ranking position to 27% in 5th position
  - Preferred countries: Is more important for nontraditional markets such as China (39%) and Latin America (28%)

What Are the Preferred Types of International Agreements?

Comparison of Relative Occurrences of Types of International Agreements for Priority Countries

What Fields of Regulatory Activity Should be Covered in Agreements?

Drugs: establishment licensing and pre-market review overall most checked

Medical devices: quality system audits and pre-market review overall most checked

Any Differences Between Priority Countries Regarding Drugs?

• US, EU, Australia and China: establishment licensing and pre-market review remain most checked
• Japan: pre-clinical and clinical trial data most checked

Any Differences Between Priority Countries Regarding Medical Devices?

• US, EU, Japan and Latin America: quality system audits and pre-market review remain most checked
• Australia and Latin America: Post-market reports second most checked

Key Findings

Key Findings

• Great majority in all TP sectors are involved in international trade and consider important that TPP be involved internationally
• Major regulatory issues = lack of harmonization and mutual recognition = key impediments to trade
• TPPs International Strategy is relatively "in sync" with industry needs i.e. harmonization & agreements
• Accordingly, it would be a mistake to focus uniquely on so called "domestic" issues
• Results also show that TPP needs to:
  - Improve information about it's international activities
  - Develop a communication strategy to address specific perceptions and misconceptions