The cost of maintaining a healthy horse will soon skyrocket, if potential changes to medication fees in this country go through. Health Canada has proposed increases to veterinary drug service fees which would lead to higher prices for some medications, and the elimination of others. Not only would this hit horse owners in the pocketbook, but it would put many horses’ health at risk.

According to a report commissioned by the Canadian Animal Health Institute (CAHI), Health Canada is seeking to increase service fees associated with regulatory reviews for animal drugs in addition to ongoing quality oversight of licensed products, similar to human medicine fee structures. The increases would range between 169 to 500% by April 2019, and would affect more than half of the veterinary drugs for livestock and companion animals.

The CAHI, which is a trade association representing the developers, manufacturers and distributors of animal pharmaceuticals, biologics, feed additives and animal pesticides in Canada, says such substantial increases in our small Canadian market would present significant challenges for their members as well as Canadian veterinarians and owners of food and companion animals.

The report states: The changes in fees are material and represent very large increases to suppliers of animal health drugs bringing new licensed products to market and maintaining them in the marketplace without consideration for market size and the public good contributions veterinary drugs provide to food safety, human health and the human-animal bond.

The proposed fees also do not consider alternative or higher risk options that exist within animal health such as the use of less effective (and sometimes illegal) products to reduce cost, not treating an animal, and euthanasia.

Health Canada implies that the proposed fees appear to be in-line with those applied in the United States (US), Australia and the European Union (EU). The great difficulty with this comparison is that the animal numbers in the US, the EU and Australia are much larger than in Canada, providing for a much larger market served by the drugs. This provides for a much larger population over which to spread costs of product registration and regulatory service fees. In Canada, these costs are concentrated on a much smaller volume of veterinary drugs and animal populations. As increases in these costs are passed along, it creates the strong likelihood of disproportionate increases in prices versus other countries, and that for some products, the relatively small size of the Canadian market, would not warrant the costs of product registration/renewal.

Health Canada announced the proposed changes in October 2017, and gave industry members a chance to comment and issue feedback. The CAHI prepared a response on behalf of its members, which president Jean Szkotnicki, says focuses on the importance of maintaining healthy animals and suggests a more practical fee structure for the Canadian veterinary drug market.

In it, the CAHI points of that “the Canadian animal health business is only 2.5% of the global animal health market. The human pharmaceutical industry in Canada which benefits from socialized medicine is a 35 times larger market than the Canadian animal health market. From a transnational corporation perspective, animal health in Canada is considered a lower tier commercial market. Therefore, Canada at 10% of the sales of the USA, has a lower return on investment and is therefore a lower priority for registration. Drug innovation costs are $29 million and $39 million Canadian for companion and livestock drugs, respectively, and the return on investment is not realized for 3-7 years. For Health Canada to calculate the service fees based on program, corporate and capital costs without consideration of the market size and benefit to society makes no sense. It becomes a budgeting exercise that will stymie innovation and negatively impact the availability of safe and effective animal health products in the Canadian market. A consequence of this situation will be the introduction of greater risks to Canadians due to use of unlicensed animal drugs. As noted previously, increased pressures on Health Canada compliance and enforcement costs will be a consequence.

“With Canada being only a small player in the overall global animal health market, it is estimated that any approved “blockbuster” drugs presently sold in the Canadian veterinary market would represent only 2-4% of the industry’s current approved drug portfolio with over 50% of this portfolio falling into sales of less than $500,000 annually. The proposed fees will make justifying a Canadian registration next to impossible when registration and maintenance fees surpass yearly sales. Niche products are likely to disappear from the market and alternative products not come to the market due to the inability to justify high regulatory costs with the small Canadian market size.”

The CAHI also noted the importance of maintaining access to appropriate medications for food and companion animals. “Registration of animal drugs is a benefit to both animal health companies and to our public. Our pets are important household members providing emotional stability and health benefits to their owners. Animal health products contribute to the welfare of our food and companion animals and to food safety in the case of production animal drugs. Keeping our animals healthy is also critical to keeping people healthy.

“The government of Canada is implementing new measures to ensure responsible or prudent use of medically important antimicrobials used in veterinary medicine. Lack of accessibility to licensed veterinary drugs will undermine this initiative as animal owners and veterinarians seek options to manage animal welfare using compounded and other unlicensed products. Furthermore, the Federal Plant and Animal Health Strategy will be challenged to meet its goals to manage animal diseases without access to the same health management tools as those used in other developed countries that food animal producers compete with.”

The CAHI agrees that veterinary drug service fees must be revisited and modernized, but say that consideration must also be given to ensure Canadian veterinarians and animal owners have access to the same health management tools as their counterparts in other countries.

Contact Honourable Ginette Petipas Taylor to express your concerns about the potential consequences of Heath Canada’s proposed fee changes. She can be reached at: House of Commons Ottawa, Ontario, K1A 0A6. Telephone: 613-992-8072 Fax: 613-992-8083 Email: