Health Canada is planning to dramatically overhaul the regulation of natural health products to address mounting concerns over the proliferation of misleading and unproven claims on product labels.

Currently, natural health products are regulated in a manner similar to drugs – manufacturers must apply to Health Canada for a licence to sell and products are assigned a unique number that must appear on product labels to signal the department's approval. But unlike drugs makers, natural health product manufacturers are not required to provide robust evidence that a product works before it's allowed on the market.

Under the proposed new system Health Canada would bring natural health products, over-the-counter drugs and cosmetics under one set of rules and regulate them based on the potential health risks they pose.

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The new regime would classify many vitamin, mineral and homeopathic products and cosmetics as "low risk," meaning they would not be licensed by Health Canada. Manufacturers would still have to meet Health Canada's quality standards, but they would be prohibited from making disease treatment or prevention claims on product labels. Any other claims on product labels would have to be accompanied by a disclaimer stating the information has not been verified by Health Canada.

Products deemed "moderate" or "higher" risk – such as over-the-counter painkillers, allergy medications and products that contain new medicinal ingredients – would be reviewed by Health Canada and could only make health claims if enough scientific evidence is presented to prove the statements.

"Health Canada, as a science-based regulator, wants to make sure that Canadians can trust that a standard has been met when we authorize a claim," the department said in the consultation document.

It's a major departure from the current system and, if adopted, would mean consumers purchasing homeopathic cough remedies or other herbal remedies would be able to discern whether they have been proven to work.

"The buyer has to be aware these products do not have the same basis of evidence prescription drugs do," said Michael Kruse, executive director of Bad Science Watch, an advocacy group that supports evidence-based medicine.

Timothy Caulfield, a Canada research chair in health law and policy at the University of Alberta, said the move toward a science-based regulatory system would be a welcome change from the current environment.

"If someone is marketing something, they're going to have to back that up with evidence," he said.

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Mr. Caulfield said he anticipates a substantial backlash from the makers of some natural health products.

Health Canada said it may adopt new powers to issue mandatory recalls of natural health products and cosmetics that are found to be unsafe. Currently, the department doesn't have that authority. The consultation document says natural health and cosmetic companies may also face stiffer fines if they break the law. Currently, the maximum fine for those products is $5,000. For non-prescription drugs, it's $5-million.

The department also indicated it may impose user fees on companies that want to sell natural health products and cosmetics. Currently, non-prescription drug manufacturers must pay a fee to Health Canada to have their product reviewed for approval. Those fees don't apply to cosmetics or natural health products, "even though companies benefit from the regulatory activities Health Canada conducts" on them, according to the consultation document.

The consultation period closes Oct. 24.