Cost recovery is the practice of establishing and collecting service fees. Health Canada charges fees to recover part or all the costs incurred to deliver its programs. Some examples of cost recovered programs include drugs, medical devices, and cannabis. With the establishment of the Natural Health Product Regulations in 2004, natural health products have not been subject to cost recovery. The implications of cost recovery to members could be drastic — Canadian brands could deal with significant profit losses. As a result, retailers would also see higher costs, ultimately resulting in higher prices.
CHFA’s position is that implementing cost recovery should be appropriately planned, consulted upon and communicated. These steps will help ensure awareness of what components (products, site, and/or right to sell) are captured. Any cost recovery efforts should be phased over multiple years. Costs should be appropriate to the nature of the NHP sector, mostly comprised of small/mid-sized companies. Cost recovery must also include measurable service standards.
CHFA will continue to work with aligned organizations, members and Ottawa to delay or eliminate cost recovery until a proper plan or proposal is presented.