Comprehending the Canadian Regulatory Market for Natural Health Products

A Natural Health Product (NHP), as defined by Health Canada, is “any plant or plant material, a bacterium, fungus, alga, non-human plant material, or an extract or isolate of these materials.” This includes vitamins and minerals, herbal remedies, homeopathic medicines, traditional medicines such as Traditional Chinese Medicine (TCM), probiotics and other ingredients such as amino acids and essential fatty acids. It is essentially equivalent to the U.S. “dietary supplement” regulatory definition.

The NHP regulations were implemented in January 2004 by Health Canada through its newly formed Natural Health Products Directorate (NHPD). As an addition to the scheme of the Canadian Food and Drug Act and Regulations, NHPs are considered a subset of drugs, in which health claims such as disease treatment or prevention, as well as structure/function claims, are allowed. The regulations include product licenses, labeling requirements, evidence summary reporting, safety summary reporting, quality summary reporting, clinical trial guidance and procedures, GMP and site licenses.

The regulations require pre-market approval from NHPD for all NHPs that are new to the Canadian market, as well as re-approval of all existing NHPs in a six-year transition period. In addition, site licenses are required for Canadian companies that manufacture, package, label or import NHPs.

Seventy-one percent of Canadians have used NHPs and 27 percent of Canadians regularly take NHPs on a daily basis, according to a 2005 survey by Ipsos Reid. Information on the NHP market size in Canada is somewhat limited and relatively inconsistent. According to the Canadian Health Food Association (CHFA), NHP retail sales hit approximately $2.5 billion in 2005 and are expected to grow to $2.75 billion by 2010. However, Euromonitor International placed retail sales of vitamins and dietary supplements in Canada at $764 million in 2005, with projected growth to $889 million by 2010. It is speculated that the market size discrepancy may due to different interpretations and inclusion of functional foods and nutraceuticals in addition to NHPs.

Multivitamins, herbal remedies, algae and fungal products are the most commonly used NHPs, according to the Euromonitor report. Demand for multivitamins is strong compared to that for herbal products, as half of Canadians who report using NHPs take multivitamins. Retail sales of multivitamins, vitamin C, vitamin E, calcium and glucosamine have showed good growth. Fish oil sales, although having positive growth for their omega-3 fatty acid benefits, are still relatively low, possibly because of consumer concern over fish heavy metal contamination and/or the use of alternative omega-3 ingredients such as flaxseed.

The use of herbal supplements reportedly dropped by 10 percent between 2001 and 2004, because of consumer disappointment at exaggerated health benefits associated with botanicals. Concerns over herb and conventional drug interactions, along with recalls by Health Canada of a number of herbal products on account of safety issues have also contributed to the decline of herbal sales. There have been withdrawals of some brands and manufacturers from the market because of inability to meet the new NHP regulations.

Vitamins and dietary supplements saw a 13-percent value growth from 2000 to 2005. Bone, joint and heart condition-specific products are the top three categories, occupying a retail value of 31 percent, 15 percent and 7 percent, respectively, among all dietary supplements in 2005, according to the July 2007 NHPD Status of Submissions Report.

It is projected that multivitamins, including those reputed to possess antioxidant benefits, such as vitamin E and vitamin C, will remain as the best sellers by 2010. Other NHPs such as calcium, minerals, glucosamine and eye health products, addressing age-related problems, are expected to have elevated sales growth because of the rise in the number of aging Canadians. Many herbal NHPs have reached maturity and are expected to continue to face challenges and further sales value decline over the next few years. Nevertheless, demand might strengthen for those herbal NHPs with approved efficacy claims, safety and quality from NHPD under the new regulations. NHPs with secured product licenses and proven efficacy and safety, especially for the elderly, will perform well. NHPs targeting chronic diseases that conventional drugs have not been able to fully address and properly manage, e.g. osteoporosis and arthritis, will have strong demand. A significantly reduced number of NHPs in the Canadian marketplace where overall demand will remain strong is expected.