Hello. My name is Don Gerson, and I've been involved in manufacturing vaccines for the last 25 or more years. I've produced, under my direction, over 3.5 billion doses of vaccine, some in Canada as head of manufacturing at Connaught Labs and some at other companies around the world.
The thing that I think it is important to understand, in addition to what Dr. Cameron just said, is that right now the HIV epidemic is still growing. It's growing rapidly: nine or 10 people are being infected daily in North America. The demographics are, I'm going to say, universal and ubiquitous. It's not distinguished between one place or another, one person or another. Everyone who gets HIV dies of it. We have not had many epidemics of that nature, possibly except for tuberculosis. This epidemic needs to be stopped or it will basically kill all of us. That's just reality.
I want to talk a little bit about the problem that this facility was intended to address. The important thing, I think, that is hard to understand, unless you've been there and done it—which I have for a very long time—is the exquisite nature of the facilities and the procedures that are required to make a vaccine that's going to be injected into a human being.
You put a small volume of liquid into the person, but you can't get it out again. You have to make it under extreme conditions of care. The facility has to meet not just the government requirements but the industry requirements and the practical requirements, to make sure there is nothing that should not be in it: not a particle that is half a micron in diameter, not some other virus or another living organism, not some chemical that shouldn't be there. This is a massive amount of work, and you can't just do it in a university lab. University labs are meant for discovery.
You can't just do it—I'm going to add one layer—in a GLP facility. That's good, but not good enough. So you have to have a facility where everything is not just clean but proven to be clean, where every chemical is not just a chemical but proven to be the chemical you intend it to be. This is tough stuff, and it's also very hard to expand the work from the laboratory into, first, the larger-scale production of making a few thousand doses for a clinical trial, and second, expanding that into a production of making millions or billions of doses of a vaccine for human consumption.
Particularly with HIV vaccines--I've worked on many, a dozen or so, at various different organizations, and I have seen a number fail because of the failure to follow good manufacturing practices. That was actually the origin of this. I've produced a very large report for the international AIDS vaccine initiative in about 2003, which went to the Gates Foundation, which said that they had been running all over the world looking for facilities of this nature and had had a very hard time finding those that met the requirements. They also said they have had a number of vaccines that have failed because of what somebody else might consider to be minor aspects of contamination or documentation failure but that make the outcome of the clinical trial useless.
The clinical trial comes after $100 million, $200 million, $300 million, or $400 million worth of work. In fact, for the final vaccine—the last vaccine that I produced in the United States was for smallpox after the 9/11 incident—we made a new process for the vaccine: totally new vaccine, 300 million doses, $800 million.
The previous vaccine was for childhood pneumonia. It took 10 years. I took it through the last five years, and it cost almost $1 billion to make the first dose of commercial vaccine. It made money back eventually, but this is tough stuff. You can lose the whole investment by having poor-quality clinical materials. That's what this facility was about.
The other topic I'd like to talk about is the following. One of the various comments made about why this was cancelled was that none of the facilities was economically sustainable. I take serious exception to that. First, while the Oliver Wyman report, which was just shown to you all, says there are lots of facilities, it also says on the first page that they didn't take quality into account, which ignores all of what I just told you.
Second, the concept that a clinical facility operating as a CMO, a contract manufacturing organization, could not make money and be self-sustaining is a conclusion that I think you could only come to if you haven't done it. I've done this many times. I set up the Alberta Research Council's biotechnology pilot plant, which was many millions of dollars in investment and which I ran at a profit in the eighties. I've done other such things time and time again, and so have other people. You can make a very good profit. In the last four years, just before returning to Canada, I set up a contract manufacturing company in Korea. We invested $250 million in a 50,000-litre facility for making monoclonal antibodies. We started cold. We started in a country that had essentially no such industry and we ran it at a profit. The $250 million investment is now a company worth $1.4 billion. It employs 300 or 400 people, and it's a going concern and will continue to be so. So whether it's large or small, this can be done.
The conclusion that this is not profitable either comes from someone who doesn't know how to do this or from someone who does not want it done because it's competition. That's part of the business world too. I think it's important to say, however, that the process by which the evaluation was done, the format that was used or the approach taken, was fine. There were no problems there. It was a little slow to my way of thinking, but maybe I'm not used to government. That's not where the flaw was in this. There's some decision-making process that has deprived Canada of an important facility that could have been a nucleus for economic development, that could have been a source for trial vaccines that could have used Canadian expertise in this field to develop the vaccine for HIV, which is critically important not only to Canada and to the use of huge investment in Canada in infectious diseases, but also to stop an epidemic that could kill every person on earth.
Thank you.