Health Committee on May 23rd, 2013

[Dr. Albert Friesen]

I can address the MPIC or the single payer. The single payer is the same organization that's paying now, the Department of Health, which is supported by the federal government. So they have provincial and federal support. That's the single payer. I think in that way you can regulate, but as for a multi-provider system, there is some of that already, but I don't hear it widely referred to as such. That's why I very quickly in my presentation said that you have companies providing diagnostics and so on. They're commercial companies.

In the case of the Manitoba Public Insurance Company, MPIC, it's the lowest-cost, most efficient insurance provider in North America, because you have competition in providing services, and it's controlled and regulated by Manitoba Public Insurance. I think that model could work in the health care system to provide competition. One of the problems in the hospitals is that the hospital organizations are not structured to incentivize efficiencies. We have doctors who do their thing, etc., so by introducing a multi-provider.... Now, there are multi-hospitals. Suppose they were competitive; hospitals would very quickly find a way of providing an incentive organization to reduce cost.

[The Chair, Conservative, Joy Smith]

You have less than a minute left for the second question.

Does anybody want to address Dr. Sellah's second question?

[Dr. D. Lorne Tyrrell]

I'll just say that access to data is always held up by the privacy issue. Some provinces go to the privacy issue as a barrier to access to data, I think, and other provinces have found ways around this. I think we should be working across the country to make access to data so we can improve the system across the country. It's a very important part of health research. Saving costs is getting best practices across the country, and access to data is very important for that.

[The Chair, Conservative, Joy Smith]

Dr. Brindle, would you like to make a comment?

[Dr. Ian D. Brindle]

Yes, just a very quick point.

I agree with Dr. Tyrrell. I think there's a certain balkanization of health care records, which does make it very difficult. The e-health scandal in Ontario is an example of that, which I think is a problem that the provincial government is struggling with. If you need an example of how that's not working very well, that's certainly one of those cases.

[The Chair, Conservative, Joy Smith]

Thank you very much, Dr. Sellah.

We'll now go to Mr. Lobb.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thank you, Madam Chair.

I want to thank everybody for taking the time to come today. I know you're all very busy and this likely represented a day or so out of your work day. Thanks again for taking the time.

Dr. Hudson, I've followed your progress here for a number of years. One of the reasons I think it's important you're here is that you're doing this in real time, so you can share with the committee some of the ups and downs. You're outline was good, but it doesn't really tell us what you've been able to achieve. Maybe you could tell our committee some of the different places you've been able to get a patent or a trademark, how you went about it, and how you learned how to do it, because it's not easy.

[Dr. Craig Hudson]

A fair answer to your question is that it's not easy, and I didn't know how to do it. I really didn't know. I was lucky to get a good patent agent early on.

I think there's an important distinction between the trademarks and the patents: the patents are going to expire, whereas the trademark is forever. That's one of the advantages of having a Canadian product, where you put the mark on it and you just keep driving that trademark. When I'm selling into Germany or Denmark or Sweden or Norway, or wherever I sell the product, the label always looks the same. That really comes from the aspirin story, where aspirin never had a patent. It was acetylated salicylic acid. But what they drove home was the notion of a patent.

I think that's one of the advantages of a natural health market—people tend to trust a brand. But in the pharmaceutical market, though they'll sometimes trust a brand, they're more apt to move over to a generic drug when it's offered to them. One of the advantages of staying within that more narrow natural health market is that I'm building a brand that will last beyond my patents. Even though I'm not that old, my patent will expire in about eight years, and then that's $1.5 million gone. So I need to continue evergreening the patents, but also developing a strong brand. That's something I had to learn the hard way. Again, I was fortunate to have a very good patent agent who took me through that process early on.

[Ben Lobb, Conservative, Huron—Bruce, ON]

One of the other things I want to touch on, which I think is important as well, is the entrepreneurial spirit that's required. What is also unique in your story is that you didn't develop this in your parents' garage when you were 19. You had your practice established, had your family, and you were still able to do it. So you're able to juggle many things at one time.

How do you do that? What are the lessons learned for other professionals who have a good idea, but because of their busy schedules, never step forward to develop it?

[Dr. Craig Hudson]

That's an important point. I think it was Dr. Friesen's point as well. You have to have that entrepreneurial spirit well developed by the time you walk into your medical practice. Really, all medical doctors are entrepreneurs to one degree or another. If Dr. Friesen's model comes in, we'll be a lot more entrepreneurial and competitive.

That sort of thing has to be learned, and either you do it well or you do it poorly. If you don't know how to do it, it will be a disaster. There are so many examples of doctors investing in housing, apartments, or other things they know nothing about. They have extra cash and they throw it away. Still, if we focus on the medical school training, incorporating the idea of a natural health product not being the poorer cousin to a pharmaceutical one, I think we have an opportunity, a venue, by which people can take things to the market.

The reason I worked so hard clinically was that I had to. Basically, I had to keep paying the bills at home. I couldn't tell Mrs. Hudson I was going to take a year or two off to do this. It was more out of necessity than anything else. But I really enjoyed the clinical practice and I enjoy the entrepreneurial stuff as well.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I don't want to presuppose what's in our report, but you talked about the approval process, about doing everything possible to make sure it's a good, efficient regime. At the front end, we're trying to innovate and develop new ideas, and all of a sudden these ideas start to mature. But when it's time to go through the regulatory process, that's where the bottleneck is. You may have spent all the money at the front end, without fixing the issues. I hope that's a component in our report. We want to make sure, for people such yourself, that when you've taken the product all the way through, you aren't waiting for 10 years to have it approved.

[The Chair, Conservative, Joy Smith]

Thank you very much for the very good questions, Mr. Lobb, and for the good answers.

We'll now go to Dr. Morin.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Thank you, Madam Chair.

My question is for Dr. Hudson.

Earlier, you talked about ordinary Canadians—such as farmers or other ordinary citizens—who want to encourage Canada's innovative start-up companies. It's important to help them. I agree that interested and capable entrepreneurs should be encouraged. People do need to have certain skills to become entrepreneurs and go into business. Those companies need Canadians' support. I am a proud Canadian, and I like buying Canadian products.

I was thinking of the people who invest in your company or in other similar innovative businesses. Do you think it would be a good idea for the government to create a tax credit to encourage people to invest in funds that help innovative Canadian companies?

[Dr. Craig Hudson]

Yes, that was where I was going with that. That is how I would view it, that people take the risk and then they get some sort of government protection, if I can put it that way, or some tax advantage for doing it. But they have to significantly risk their money. Unfortunately, there are all these different strategies by which people risk their money but they don't really risk it. So they—

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

I will let Mr. Tyrrell answer, but I just want to make a quick comment.

The good news is that this program did exist, but the government decided to pull it this year. Labour-sponsored funds were investing in Quebec businesses. I am referring to initiatives like the QFL Solidarity Fund, which invested in Quebec companies such as Dermolab Pharma, an R & D lab; GLyPharma Therapeutic, an R & D company for medication in oncology supportive care; and Milestone Pharmaceuticals Inc., a pharmaceutical company specializing in cardiovascular diseases.

So those labour-sponsored funds were investing in Canadian or Quebec companies, and the investors who wanted to encourage those companies and buy Canadian products received a 15% tax credit. Yet, the government decided to eliminate that tax credit.

Do you think that the government should not only reverse its decision, but also expand that measure and perhaps even encourage other Canadian funds that may be even more specialized in the area of innovative start-up companies?

[The Chair, Conservative, Joy Smith]

I think you had a comment, Dr. Tyrrell, and then we'll continue with Dr. Morin's question.

[Dr. D. Lorne Tyrrell]

I have a very quick comment.

Mining is a risky business, oil and gas is a risky business, and when they got started, there were flow-through tax credits to help encourage people to put money into those. That's how they really got their start in Canada.

Biotech is a long-term, risky business as well. It has never enjoyed the same type of support from venture capitalists, and venture capitalists have never gotten the same types of breaks as those investing in mining and oil and gas.

[Dr. Albert Friesen]

I would very strongly support the idea of tax incentives for investors, but it's a bit more complicated than that. In these labour-sponsored funds in Manitoba, Quebec, and other provinces, they gave tax credits to the private sector. Now some of the private sector investors didn't know what they were investing in, and so they misunderstood the risk factor. There was a communication gap. One has to prepare the tax incentive programs very quickly.

There have been tax incentive programs since the 1970s in Canada, but the rules have changed because of abuse and so on. Recently, the SR and ED program, which is a tax incentive program, was reduced. It's been a very important part of incentives for the private sector to invest, and I think it should continue, but rules and regulations have to reviewed from time to time so there's not an abuse.

[The Chair, Conservative, Joy Smith]

Thank you very much, Dr. Morin.

I have a couple of instructions and information I have to give to the committee. We're finished our list, so I will bring this to a close. We want to particularly thank you for coming today and giving this information to us. It's extremely valuable, and your expertise means a lot to every member on the committee.

As far as the committee is concerned, I would like to remind you that you will get the report on technological innovation the afternoon of Monday, the 27th. On the 28th, we have agreed not to have a formal committee meeting with witnesses, because I would suggest that this time needs to be spent going over that report. On Thursday, we will come back, examine that report, and make our comments on it, as well as deal with the motion, if you so choose, that Ms. Davis brought today.

With that, Ms. Davis.

[Libby Davies, NDP, Vancouver East, BC]

I just have a question on the process. When you say we won't meet formally on Tuesday, are you suggesting that we're meeting informally or that we're just meeting in our own groups?

[The Chair, Conservative, Joy Smith]

As we talked about previously, the committee had agreed that it would be nice to have that time for each of the members from all sides of the House to be able to sit down together with their people and examine the report. You will have it on Monday afternoon, so you will have opportunity to read it Monday afternoon and evening. I don't know how many pages it is.

I want to tell you about this report. It's completely confidential and will not be sent out via e-mail. It will be sent to members only. It will be sent as numbered documents in hard copy only. You need to know that.

[Libby Davies, NDP, Vancouver East, BC]

I have a follow-up question.

Thank you for clarifying that. That's what I understood for Tuesday. I just wanted to make sure.

At the Thursday meeting, rather than jumping into page 1 and starting to go through what we all anticipate will be a very big report, I do believe that it would be very helpful if we spent that Tuesday meeting—in camera of course—just hearing the analysts give us an overview. That way we could have a more general discussion about how they organized it and how it flows. I think it would be a mistake for us to jump in at page 1 and ask if we agreed with it or recommendation 1, or whatever. I think we need to have a general discussion with the analysts, because it is going to be so big.

[The Chair, Conservative, Joy Smith]

Of course, that will be what we will do before we go into the report.

[Libby Davies, NDP, Vancouver East, BC]

Yes, because there might be some overall changes besides individual recommendations. There might be some shifts. I don't know; I don't want to prejudge it.

[The Chair, Conservative, Joy Smith]

No. That's perfectly fine, Ms. Davies. Don't get alarmed. I think we'll be okay that way.

Are you all agreed with that? Good.

I would like to thank you again for coming, and we look forward to bringing you the report when it's finished and tabled.

The meeting is adjourned.