Industry Committee on April 23rd, 2007

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

Thank you all for coming here today. I have so many questions for you, so I'm going to try to get right to it.

You mentioned the government's recent budget, and how the government offered tax incentives to generic and brand-name pharmaceuticals that donate medicines overseas. Can you tell us what sort of impact this change may have overall in terms of Canada's access-to-medicines regime, and particularly for CAMR and your company? Is it going to have any effect there?

[Gregg Alton]

I'd be glad to answer that question.

I think that philanthropy and donations of drugs and other assistance from the R and D industry or the generic industry is important and can meet some important needs in the countries. However, I do not believe that philanthropy is going to solve the problems of continents like Africa. I think the change is going to have to come from within the countries. I think there's going to be only so much the western world can do in terms of donations to those types of programs. I think it's a good step forward and it will have a positive impact, but it's not going to fundamentally change the situation in Africa, which is developing the health care infrastructure and the ability to pay for medicines, and the poverty and the impact that's having.

[Russell Williams]

It is an excellent step forward. We're trying to find out how to use it best. As you know, it's just been announced, so it hasn't been fully implemented. I think it speaks to the question that this has to be a comprehensive approach. Whether it's this law, whether it's philanthropy, other training programs, infrastructures, roads, education, if we're going to attack this--and this is what the AIDS activists have told me--we have to approach it globally. I think it's one more tool in our tool chest that we should exercise. We should be proud of it. We should use it, but there are many more things we could be doing.

[Jim Keon]

To respond quickly, the tax changes I think are great. I think for donations, philanthropy, it will increase the incentives for companies to do that. I would agree with Mr. Williams that we need a comprehensive approach. That's why we're saying changes to this legislation are necessary, because right now we're talking about patent medicines; we can't make those, even with tax advantages, unless this legislation works properly. This legislation had a two-year review--that's now. If we don't make changes now, no more review is scheduled, and I'm not sure when we'd ever make those changes.

[Colin Carrie, Conservative, Oshawa, ON]

I think we're all trying to figure out the best way to deliver what needs to be delivered to these countries and to try to figure out if the legislation is broken, or if there's something else that needs to be done. I'm quite interested in something that Mr. Alton said, that you supply products to countries that require it, but you're sourcing some of these drugs out of countries such as India. Why aren't you using Canadian companies? Is it a price thing? Did I get that right?

[Gregg Alton]

Let me explain this. We have a couple of different products. Our branded product is currently manufactured in the Caribbean and also here in Canada, so there is a Canadian drug that's actually meeting the needs of patients in Africa through Gilead's access program. The Indian generics would be true generic products that would then be in these 95 countries. Our branded products would be there as well. They would all be competing within the marketplace.

The rationale's not so much focused on price. We believe the prices of our products are as low as they can go. Believe me, if we could lower our manufacturing costs, we would, because that's good for our business, but we've really worked very hard to get it about as low as we can. In fact, most of that work's now being done in our facility in Edmonton on manufacturing efficiencies.

The reason we want to work with the Indian companies is that they have a very good ability to get drugs to patients in the countries, based not just on price, but also on their understanding of the health care systems and their understanding of who the people are and how to work within a very difficult environment; we, as a western company, are not well equipped to do that.

When you talk about CAMR and the fact that it hasn't been used to date, I think part of the reason is not that it's a failure, but that a lot of the programs in place are actually doing the types of things that Gilead is doing.

We're having a lot of talk in this room about the desire for CAMR to be used, or that it's a failure because nothing's been used, but the goal of access, the goal of CAMR, and the goal of the flexibilities built into TRIPS should really not be to break patents or to override patents, but to provide access. That should be the overall goal. The fact that it hasn't been used may actually be showing that some of the things actually happening out there are working, or are at least working as well as they can within a very difficult environment.

[Colin Carrie, Conservative, Oshawa, ON]

One of my concerns was just brought up; I believe Mr. Keon mentioned it.

You're looking at quality of a product, too. Countries like India don't have IP protection. With the way it appears to be going, I was just curious about whether this is going to force companies like the generic Canadians to set up shop in India in order to compete with other countries or with other companies that are already there. Are we saying we're going to be moving all our manufacturing offshore now? Is that a reasonable thing for me to...?

[Gregg Alton]

No, I do not think that manufacturing will move offshore from Canada. Gilead does a substantial amount of manufacturing in Canada because it's a great place to do business for manufacturing. We have high-quality manufacturing, great capabilities, and a very educated, skilled workforce here, so I think this will always be a good place to manufacture.

In India they've just been doing this for a long time. They haven't had patents, historically. They are now actually adopting the TRIPS requirement to enforce intellectual property, so I think it remains to be seen what impact that will have on the developing world for access to medicines.

As I mentioned in my testimony, I think that's an important role CAMR could play. If the availability of low-cost generics is cut off from India, that could be a good place for CAMR to provide a safeguard to ensure that patients still receive access to those medicines.

India has similar legislation in place as well, so my guess is that a lot of those countries in the developing world will go to India, even under a compulsory licence regime.

[Colin Carrie, Conservative, Oshawa, ON]

This question is for the Canadian Generic Pharmaceutical Association. If all the red tape disappeared from the Canadian legislation, would you be able to provide medications from Canada to the less developed countries, and if you could, how?

[Jack Kay]

We have been in discussion with MSF. MSF have come to Apotex and asked us to produce a quantity of this triple combination therapy, which we have produced. We can supply it. The price at which we're prepared to supply it is competitive with products that would come out of India. The only reason we have not supplied it to MSF, who have assured us they will get the products to the patients who need it to save lives, is we cannot stickhandle our way through the current legislation.

[The Chair, Conservative, James Rajotte]

Go ahead, Mr. Williams; please be brief.

[Russell Williams]

In terms of the current legislation, we're looking at four basic bits of information: which country's asking for it, who's using it, the quantity--very straightforward questions--and if that's a 30-day process. If that doesn't work, the generics could move forward. Our role is very small in this. The generics could move forward and seek a compulsory licence, as Mr. McCool said. They have not done that yet, so to say that the law doesn't work when it hasn't even been used I think is rather premature. That's why we're also so active in other areas.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Masse is next.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, gentlemen, for coming here today to present on a very important issue. It's the reputation of this country, I believe, on the line here.

I'll start with Mr. Williams and Mr. McCool.

You repeatedly said you need more time for this legislation. The fact of the matter is that this legislation came about after 550 days of review. It took that long, over a year and a half, to actually get a piece of legislation, which since that time hasn't produced anything.

Right now, if it's still, in your view, premature, how much more time is needed and what needs to change, specifically, for this legislation to be successful? I'd like to know, because the body count is rising. I think we're actually participating in a wilful genocide of people, because we actually have systems in place and we use excuse after excuse after excuse.

What is the timeframe, would you say, before there has to be a full-blown investigation and people held to account if we still don't get a pill to someone else? Is it one year, two years, three years, four years? What is it?

[Russell Williams]

First and foremost, I think we should be doing everything in our power to work on this important issue, I agree with you. I've tried to list some of the things we were doing long before the bill turned to debate. So I don't think there's any argument there.

I would love to see the bill tested. If we're talking about a product that potentially could do the kinds of things you're talking about, let's take it through the process. We're talking 30 days. Then let's take it to compulsory licensing, and let's move forward in that process, as Mr. McCool said.

So let's move forward and let's test the bill before we say it's not working.

[Terry McCool]

I would just add that you need a country to order the product. That's what you need. From everything we've seen to date, either a country is not willing to be identified or it's not willing to participate.

[Jack Kay]

So if a country doesn't want to be identified, let them die.

[The Chair, Conservative, James Rajotte]

One at a time, please.

[Terry McCool]

I just want to say, you had 146 countries sign the declaration at the WTO. They all agreed to that process. It's very simple. All they have to do is say they need a supply, and then they can come to the Canadian generics to get it if they want. Right now, their needs are being satisfied by either the Indian generics or the brand-name industry through their philanthropy or selling drugs at no cost.

[Brian Masse, NDP, Windsor West, ON]

Have any of your organizations approached a developing country and said, “Let's work on doing this specific legislation”? Tell me how many times you've approached different countries, how far you've brought that case along, and where is it in terms of.... Specifically, what resources have you spent on going to different countries on that list? Because I'm a bit concerned about saying, “Developing countries, it's your fault. It's your fault that you can't figure out how to actually make this bill over in Canada work.” I don't accept that as a position for this country.

So I'd like to know when you've actually gone to a country, what that country is, what you've done work on, and when you're going to actually bring forth a case where you'll actually let a generic produce a drug at a cheaper cost.

[Terry McCool]

We're not in the business of HIV/AIDS drugs, but we're in the business of multi-drug-resistant tuberculosis, which is often fatal to people who have AIDS. We have negotiated with the South African government. We have negotiated with the Indian government. We have negotiated with the Chinese government. We've also negotiated with Russia.

What we've done is we've created, through technology transfer, the ability of all four of those countries to produce two very old compounds that have been off patent for years, but nobody wanted to invest in developing them. We've provided the technology, the tech transfer, the training, and $150 million in funding to increase the supply of these drugs in the third world. That's what we've done.

[Brian Masse, NDP, Windsor West, ON]

Why aren't we using this legislation then?

[Terry McCool]

There are no patents on those drugs. We don't have to go through the Canadian legislation.

[Brian Masse, NDP, Windsor West, ON]

This is the whole point, though. This system was set up so that actually could change. That's the whole point of this legislation, that there was actually supposed to be a place for developing countries and NGOs to get together to actually access those medicines. But I asked specifically, in terms of using this particular piece of legislation, what you have done to approach another country to say let's use this bill and make it work.

[Russell Williams]

Let me just quickly, and then Mr. Alton can respond.