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Entering the COVID-19 Marketplace: Proceed with Care

June 19, 2020
While it’s common knowledge that things like ventilators and prescription drugs are heavily regulated, […] other key products we’re relying on to help COVID: things like masks, hand sanitizers, hospital gowns and other PPE, are also considered medical devices, drugs, or NHPs, and they are subject to strict product and facility-specific approvals.
Pei Li, Partner in the Blakes Marketing & Health Regulatory group
COVID-19 is transforming the way businesses create products and go to market, especially when launching health products during a pandemic, on an expedited timeline. How are they managing the regulatory requirements and public health demands? Listen in as Blakes lawyers Pei Li and Laura Weinrib discuss the actions companies can take today to get COVID-19-related health products to market safely and quickly.


Mathieu: Hi, I’m Mathieu Rompré.

Peggy: And I’m Peggy Moss. This is episode 8 of the Blakes Continuity podcast.

Peggy: I don’t think I can do it.

Mathieu: Peggy, what do you mean? The podcast? Because we’re actually taping now.

Peggy: It’s just, I’m on my third wasabi-ginger-COVID breezer, and I don’t think I can take anymore.

Mathieu: What?

Peggy: I read an ad that said it would prevent COVID, but my lips are burning, and I think my teeth are peeling.

Mathieu: Ah, I think, I think you should stop taking it. It turns out we’re talking to a couple of partners today who might be able to help you understand what’s happening in the life sciences industry.

Peggy: Good idea! Today, we welcome Pei Li and Laura Weinrib, partners in our Life Sciences group.

Mathieu: Pei, the life sciences industry in Canada and around the world has been extremely busy over the past three months, as we can imagine. What’s even more interesting is that agribusiness or manufacturing companies have transitioned some of their production towards medical products. From a regulatory perspective, what are the major issues you’ve had to advise clients on?

Pei: Well, Mathieu, we spent a good chunk of time in the last three or so months helping our clients get COVID-related products to market, and while it’s common knowledge that things like ventilators and prescription drugs are heavily regulated, what a lot of people don’t realize is that some of the key products we’re relying on to help COVID, so, things like masks, hand sanitizers, hospital gowns and other PPE, they’re considered medical devices, drugs or NHPs, and they are subject to strict product and facility-specific approvals. And whether you need one or both sets often depends on types of activities you’re engaging in ― what you’re doing. So, for example, for things like medical devices, different devices may need product licences, whereas others may only need a facility-specific licence.

It’s important to keep in mind that these are often products and applications that take a very long time, but obviously due to COVID, you know, a lot of our clients are forced to get these products shipped, distributed and out to market under very extreme time pressures. So, we’ve done everything from helping them put together sample labels, put together product applications on the quick, help sort out things like product ingredients, composition and formulation issues, also, things like helping them negotiate manufacturing agreements on the quick.

Peggy: I imagine that during a pandemic the demand for solutions puts enormous pressure on companies to be first to market with all the risks that that entails as well as opening a window to opportunists. What should business leaders keep in mind when they’re considering launching products that are meant to be helpful in the COVID fight?

Pei: Well, Peggy, the short answer is even though Health Canada is helping to expedite access to a lot of COVID-specific products, and they’re doing this through things like emergency and interim orders, the onus is still on the companies themselves to ensure that products are compliant before they go to market. So, unlike in some jurisdictions, where regulators have exempted specific COVID-related products from certain types of liabilities, so far, we haven’t seen this type of protection from Health Canada.

The level of risk for things like fines, offence provisions, all the usual laundry list of Health Canada enforcement measures under the Food and Drugs Act, also depends on what you’re doing. So, for example, a company that imports a finished medical device into Canada may have more regulatory responsibility for that product as opposed to a company that’s, say, just a parts manufacturer and sells the part to the actual medical device manufacturer.

Another challenge some of our clients have been dealing with is the fact that some of Health Canada’s guidance and processes for these product approvals have changed, understandably, as they themselves are also getting onto a learning curve, and so the difficulty is, for example, if you’ve applied for a particular product licence, say back in March, and you’re looking to apply for another very similar product in May, it’s possible that the application process and the actual pathway may have itself changed. So, it’s important to go back and to refresh yourself to make sure that everything is still the same.

Mathieu: Laura Weinrib, let’s turn over to you. The government is warning companies about false and misleading advertising. What are some of the regulations currently in place and are they still relevant in the context of the current pandemic?

Laura: So, the very short answer is the same rules regarding advertising that applied before COVID-19 continue to apply now. False and misleading advertising is prohibited, any claims you want to make requires substantiation before you make those claims, and also, in making any sort of therapeutic claims, industry needs to be very careful not to make claims that inadvertently transform what was previously an unregulated product into one that requires approval by Health Canada as either a medical device or a drug.

We’ve started to see a lot of COVID-type claims on the market. I think everyone has personal experience with their inbox being filled with products with COVID claims like simple, washable, cloth face masks being marketed as coronavirus protection. Both Health Canada and the Competition Bureau have increasingly become concerned that these types of ― with these of types of claims, and they both issued statements about false and misleading advertising related to COVID-19 and done a lot of investigating. As an example, Health Canada maintains a publicly available list of COVID-related advertising complaints that they’re investigating or have resolved, and that list is currently at 175. That is a staggering number for Health Canada in just a few months ― way more than advertising complaints being investigated than are normally investigated.

Peggy: How have these steps impacted legitimate businesses entering the health products market during COVID?

Laura: There’s a lot of pressure for legitimate businesses to put out products to keep up with demand and also to stay ahead of competitors who are making new products and new claims. There’s also been a flood of counterfeit and non-compliant products on the market.

As Pei mentioned, Health Canada has opened up some new avenues to get COVID-related health products approved a little bit quicker and, at times, with slightly relaxed regulatory requirements. The total opposite is true regarding advertising. Regulators, both Health Canada and the Competition Bureau, generally view offences that target or take advantage of vulnerable groups as particularly serious and take action accordingly. In this case, industry needs to be particularly careful when making any implied or express claims related to COVID, because regulators these days consider our entire population to be vulnerable as it relates to COVID claims. Understandably, we’re all extremely concerned about our own health. So, advertising is truly subject to significantly increased scrutiny right now.

There are challenges in ensuring compliance in short time frames, especially when it feels like not everyone is playing by the same rules. But Health Canada and the Competition Bureau, as I mentioned, are investigating both small new entrance to the market as well as established national retailers and manufacturers. And, in my opinion, the increased scrutiny surrounding claims should ultimately benefit legitimate businesses that are properly substantiating their claims and taking a reasonably cautious approach.

Mathieu: Pei Li, let’s end this episode with you. I understand non-compliance can lead to large fines, monetary penalties and possibly imprisonment. What should companies keep in mind in this climate?

Pei: Well, I think the key is to make sure that your products and services are continually vetted by both the business and legal teams to make sure that it’s legally compliant. Just because there’s unprecedented demand for certain products, understandably, doesn’t mean that you should just act with blinders on. So, it’s important to continue to scrutinize and assess the issues and risks we’ve discussed. Whether it’s considering: does your product need a product specific licence before you can import or sell it or whether we need facility-specific licences, things like that.

If you are going to proceed, understanding that there is some regulatory risk in your particular situation, you need to obviously make sure you understand the nature of the risk, whether it’s the possibility of things like fines, product seizures, reputational risk and to make sure that this is consistent with your organization’s risk tolerance. Remember that for many COVID-related products, Health Canada also has a list of approved and pending product approvals on their website that they do update regularly. So, for example, if you’re a retailer and you’re in a situation where you’re partnering with an importer or distributor who says they have an approved product, remember that you can check it against both Health Canada’s usual databases as well as their COVID-specific databases.

Peggy: Thank you, Laura and Pei, for taking the time to talk with us today. These are chaotic times for all of us and particularly those working in the life sciences.

Mathieu: Listeners, just a reminder that a podcast is no substitute for legal advice ― it goes without saying. If you’d like more information on this topic or any other legal issues related to the pandemic, please check out our website.

Peggy: Until next time, stay safe and stay well.

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