Evidence of meeting #61 for Health in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.
A recording is available from Parliament.
Noon
Conservative
The Chair Conservative Joy Smith
Thank you so much. We've gone quite a bit over.
We're now going into our five-minute Q and A round. We'll begin with Dr. Sellah.
Noon
NDP
Djaouida Sellah NDP Saint-Bruno—Saint-Hubert, QC
Thank you, Madam Chair.
I would first like to thank the witnesses for joining us today. They have provided us with very relevant and important information on innovation in health care.
Based on the presentations that we have heard this morning, my conclusion is that Canada has difficulty transforming basic research into applied research, which could allow Canadians to benefit from those innovations.
Dr. Menon, my understanding based on your remarks is that our technologies, which are paid for by Canadian taxpayers, are sent abroad because our corporate culture does not include venture capital. So, unfortunately, people abroad are the ones who will take advantage of Canadian innovation.
Could you tell me how the new research and development government cuts are going to further compromise a situation that is already deplorable, in my opinion?
Noon
Professor and Canada Research Chair, Robarts Research Institute, University of Western Ontario
Yes, thank you.
That is true.
I believe there are two reasons our technologies go abroad.
One reason, as I mentioned, is the lack of venture capital. The government does not provide much of that money, so I don't believe the particular cutbacks you are referring to will affect that. They will affect other things, of course.
Another reason is that government funding models in basic science, and this is a very dangerous model, which both the federal and provincial governments have, make us partner with industry very early in the development cycle. I work with Siemens, Varian, and General Electric on very basic discoveries in my lab. Of course, because they put in half the money, when this becomes a potential product, it goes outside of the country right away. This is a fundamental flaw in these partnership funding programs that both Ontario and the federal government have. If we do not support basic research wholly in the country, then of course, we have no right to it later on.
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NDP
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NDP
Djaouida Sellah NDP Saint-Bruno—Saint-Hubert, QC
I would like to ask a question about universities.
Earlier you mentioned that there is apparently a shortage of qualified people who make molecules. How could the government address this problem?
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Professor, Department of Medicine and Department of Chemistry, Dalhousie University, As an Individual
What I mentioned was that we have a shortage of medicinal chemists. A medicinal chemist is a chemist who makes molecules. All drugs are molecules, but not all molecules are drugs, and it takes people with a subset of interests to be able to identify those.
As mentioned, we actually do have a shortage of medicinal chemists, people who want to make drug molecules in this country. I don't know if that's in NSERC's mandate or CIHR's mandate, but I wish that it was in someone's mandate for them to identify medicinal chemists as a relative area and to encourage the nurturing and training of people in that particular area.
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Conservative
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Conservative
Mark Strahl Conservative Chilliwack—Fraser Canyon, BC
Thank you, Madam Chair.
Dr. Weaver, you certainly know how to intimidate me, anyway, by putting a couple of algorithms on the first page of your brief. I do want to ask about it, though.
You mention that Canada had a drug discovery deficit of 10 drugs over 20 years. Were there any countries that exceeded their drug discovery? Were there some that were ahead of where they should have been, and what are those examples and why do you think that is?
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Professor, Department of Medicine and Department of Chemistry, Dalhousie University, As an Individual
The countries that exceeded were the United States, Japan, Germany, and Switzerland. They were the main ones that exceeded. These are countries which have a strong industrial pharmaceutical sector that can take discoveries and convert them to products. So, yes, there were a number of countries that substantially exceeded their predictions.
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Conservative
Mark Strahl Conservative Chilliwack—Fraser Canyon, BC
We've heard a little bit about the U.S. model, comparing Canada and our grants and contributions from government. Can you comment on the programs of Japan, Germany, and Switzerland and whether they fund seed research and go further up the chain than we do? Those are questions I'd like answered.
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Professor, Department of Medicine and Department of Chemistry, Dalhousie University, As an Individual
I'll answer it in two ways. First of all, they have particular programs in place that fund medicinal chemistry, which actually fund drug discovery. It's not tacked on to some other particular funding agency.
As already mentioned, for example, in the United States they have SBIR, so they have particular programs that are probably better at encouraging this sort of translation.
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Conservative
Mark Strahl Conservative Chilliwack—Fraser Canyon, BC
This is a health committee, so we're kind of crossing over into the financial sector and venture capital, but that was a theme that was very important.
Is there anything that you think the federal government should be doing to encourage venture capitalists, or is it, as you said, just an attitudinal shift? How do we encourage venture capitalists to take more risks, as has been said, through government policy, or is there government policy that's actually discouraging venture capitalists?
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Professor, Department of Medicine and Department of Chemistry, Dalhousie University, As an Individual
Certainly we need more capital from venture capitalists, and we need them to be willing to take risks, and to be more knowledgeable in assessing the material that is presented to them.
How best to go about that, I'm not really sure. What tends to motivate venture capitalists is making money in the long term. Unfortunately, the long term is the problem. Most venture capitalists whom I interact with also fund information technology, so they're used to seeing return on their investment in about 18 months. They find the biotech space to be horrible because we say, “We're only four years in, but we're getting there.”
If there were some way that they could be shielded from their losses and encouraged to be patient venture capitalists, that would be good.
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Conservative
Mark Strahl Conservative Chilliwack—Fraser Canyon, BC
Finally, you mentioned that when you brought the drug you were working with to the third stage—
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Professor, Department of Medicine and Department of Chemistry, Dalhousie University, As an Individual
Yes, that's the phase three human trial.
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Conservative
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Professor, Department of Medicine and Department of Chemistry, Dalhousie University, As an Individual
Yes, we did. We did an IPO. This was in 1995. We did an IPO, and we traded on the TSX and the NASDAQ. Right now, as an exit strategy for biotechs, no one is doing an IPO anymore. You just hope to be bought up by a bigger company.
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Conservative
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NDP
Dany Morin NDP Chicoutimi—Le Fjord, QC
Thank you very much for your testimony.
One thing struck me in all of your presentations. There is in fact a lack of coordination in the long chain from research, through development, to the final product, and all the way to both medical and economic benefits for Canadians.
I keep thinking to myself that Canada is in a very tight economic situation with budget cuts. The easy solution, but not necessarily the appropriate one, would be for the Government of Canada to invest more and give more money to our researchers and our institutions.
My question has two parts. First of all, are there low-cost or zero-cost initiatives that we could implement in Canada, instead of investing new amounts in various areas of research and development? As I mentioned, given the deficit, the goal is not to make the government spend more, but to find more efficient ways to support research in Canada.
Furthermore, if you insist on talking about financial support, could you perhaps tell us about the spinoffs or benefits? In fact, I still think that, when you invest in research and development, the benefits will come later. If you have the information, could you provide us with figures or data on the potential spinoffs derived from the investments made by the Government of Canada in research and development?
My question is for anyone knowledgeable on the matter.
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Conservative
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Executive Director, Canadian Light Source
I can give a short answer. As my colleagues said, we are not asking for more money. When we said that IRAP should be changed, that means you need better specialists for the evaluation of ideas. Also, when it comes to CIHR, we are not asking for more money, but for more focused strategies. That doesn't mean distributing money equally. It means making a priority area, for example, high field MRI, and bringing that interdisciplinary group of researchers together. That would help. That means not more money, but changing the structure of how money is spent. That would help as a first answer.