Evidence of meeting #37 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was generic.
A recording is available from Parliament.
12:20 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
Ms. Goebel, you explained to us that your vaccine was invented with the support of the Canadian government. How much support?
12:20 p.m.
E. coli Project Manager, Bioniche Life Sciences Inc.
It was $7.6 million through the Industrial Technologies Office. I don't have the number for the SR and ED program.
12:20 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
After that, once your vaccine was on the market, you seemed to say that the government was hesitant about the idea of promoting it to the cattle industry. Did I understand you correctly?
12:20 p.m.
E. coli Project Manager, Bioniche Life Sciences Inc.
The cattle industry is one that is suffering right now. It's not that the government doesn't want to promote it, but that the cattlemen need assistance.
12:20 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
So what exactly are you asking of the government, then? I understood that the government was not doing enough to get the cattle industry to adopt your vaccine. Now you're telling me something else. So I didn't understand you correctly the first time.
What do you expect of the government, as far as your vaccine for the cattle industry is concerned?
12:20 p.m.
E. coli Project Manager, Bioniche Life Sciences Inc.
The ask before government is for $50 million over three years to help commercialize this, allowing cattlemen to adopt the use of the vaccine.
12:20 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
Is it because it's too expensive at this time?
12:20 p.m.
E. coli Project Manager, Bioniche Life Sciences Inc.
It's a cost they're having trouble incurring right now.
12:20 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
And the cattle industry could not, on its own, buy it, use it, and promote it?
12:20 p.m.
E. coli Project Manager, Bioniche Life Sciences Inc.
The cattle industry is a commodity-based system. There are certain segments within the system that are identity preserved. These are branded beef operations—Laura's Lean Beef, Top Meadow Farms, artisan beef. They are integrated systems that are able to take the cost and pass it on to the consumer. But that's not the case for most cattlemen.
12:20 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
We've heard some troubling testimony here today about the drug patent regulations. The government is proposing to change them with almost no consultation and within a short timeframe. This would extend patents in a way that overrules a Supreme Court decision that called this evergreening process draconian and one that would result in hundreds of millions in drug costs for our health care system. To challenge this, the generics will have to go to court, incurring even more cost for the health care system.
Mr. Livingston, did the brand name pharmaceutical companies request this change from the health or industry ministries? If so, what was the rationale?
12:25 p.m.
Vice-President, Federal Government Affairs and Federal Provincial Territorial Relations, Canada's Research-Based Pharmaceutical Companies (Rx, & D)
The proposed amendments by the government simply reaffirm existing government policy. They are aimed at clarifying the intent expressed in 2006, which was to ensure that patents protected under the regulations would continue to enjoy protection until the expiry of the original protection. That was stated during the consultation back in 2006. The amendments do not change the rules of evergreening. They simply clarify the intent of the government that was going forward and not actually going backward.
The proposed amendments are further to the government commitment in the 2007 Speech from the Throne to improve the IP protection regime in Canada. So this is not a surprise. That was part of the speech and an ongoing process. It's simply to correct the situation that occurred in recent years. It's not changing the 2006 situation.
12:25 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Did your organization or individual pharmaceutical companies have the benefit of consultation with the ministers in the development of this regulatory change—or clarification or correction?
12:25 p.m.
Vice-President, Federal Government Affairs and Federal Provincial Territorial Relations, Canada's Research-Based Pharmaceutical Companies (Rx, & D)
We are responding to the Canada Gazette part I, consultation. This was the first time we saw the amendments.
12:25 p.m.
Vice-President, Federal Government Affairs and Federal Provincial Territorial Relations, Canada's Research-Based Pharmaceutical Companies (Rx, & D)
The throne speech was pretty straightforward about the intent of the government to clarify this. We signalled the government that the way regulations were done was not clear and that corrections were needed. We did this as part of regular communications we have on all sorts of issues with the government. We did not specifically request any wording in the regulations; we simply invited the government to respect the commitment in the Speech from the Throne.
As I said, the amendments are simply to clarify the original intent of the government back in 2006.
12:25 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
So you didn't help to write the regulations, but you contacted the government about them. You took a cue from the 2007 throne speech.
12:25 p.m.
Vice-President, Federal Government Affairs and Federal Provincial Territorial Relations, Canada's Research-Based Pharmaceutical Companies (Rx, & D)
We pointed out to the government that the regulations as written in 2006 were not clear and that the government needed to clarify its intent and apply its existing policy. We believed the government should make sure that the policy decision agreed upon in 2006 would be part of this, and that everyone should respect the law.
12:25 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Mr. Keon, do you agree that this regulatory initiative, though it runs counter to a Supreme Court decision, simply clarifies or corrects regulatory policy as opposed to changing it?
12:25 p.m.
President, Canadian Generic Pharmaceutical Association
No, it's a fundamental change. In fact, the Supreme Court looked at the patented medicines regulations, which are a function of the Patent Act.
The Patent Act has a clause called “early working”. It says that a company can use a patent to develop a product for research and regulatory submission purposes. The regulations flow from that and allow brand name companies to block a generic.
The Supreme Court said that the extraordinary power given to a patent owner in pharmaceuticals should be used only when the patents are clearly relevant to the submission. The government agreed with that. In 2006, it said that it was never their intention that these irrelevant patents would be used to block a competitor, and the government made the change.
We are surprised at this change, and we had no input, no warning. We tried to talk to Health Canada and Industry Canada but were never told, prior to seeing it in the Canada Gazette, that such a change was being considered.
12:25 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you.
Thank you, Ms. Nash.
We'll go to Mr. McTeague, finally.
12:25 p.m.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
I'm very disturbed that the Conservative government would have taken the position of actually not even informing the industry affected after so many years of hard-fought battles to correct this problem. Even the President of the United States, when reviewing this back in 2002, referred to it as absurd and beyond reality that the patenting of even...I think he referred to it as the pill bottle in which a drug was found was used strategically to keep generics off-line.
If it were the other way around, if a regulation were being proposed that would affect the brand names, would we not expect the kind of response we're seeing here today? I am flabbergasted that we would allow this to happen.
Mr. Carrie, you take back to your minister the need for further consultation and for really looking at this hard and long, because I think, frankly, that it's going to damage a lot of the provincial formularies that are anticipating these changes. And of course, it is a question of equity.
I want to ask something that is specific to this committee, and that is about the level of R and D. We can talk about the percentages, but I want to know what truly is research and development.
I'm wondering, Mr. Livingston, Mr. Laberge, and Mr. Keon, what you consider R and D. Do you consider advertising to be R and D? The Income Tax Act actually says that it is. Do you consider marketing to be R and D? The Income Tax Act says in fact that it is. Mr. Livingston and Mr. Laberge, are we giving a false impression of what in fact is a declining amount of R and D being done by your industry?
12:30 p.m.
Vice-Chair, Federal Affairs Committee, Canada's Research-Based Pharmaceutical Companies (Rx & D)
The R and D we are reporting is that which qualifies under the PMPRB, and it's written into, I believe, the Patent Act. It was the SR and ED definition as at 1987. It's been a while since I've looked at the detail. The SR and ED definition is that it has to be a cost directly or indirectly related to scientific uncertainty. In other words, quite often what CRA has used as that point of scientific uncertainty is the granting of market authorization, the NOC. As to costs involved up to that point, as I mentioned, the majority of those costs occur in the clinical development phase. You have the various phases—one, two, and three. There are the costs, direct and indirect, of that as well as the costs if you're partnering, as we often do, with university and research institutes.
Our experience has been that CRA has been quite restrictive. There are a number of areas in which we feel they have not been reasonable in allowing those costs. Certainly to my understanding, there is nowhere in there that says you can include advertising costs. I don't think there's any way that would fit that definition, but that's a definition we comply with.
I don't know what definition was used to come up with Jim's number. I'd welcome it being submitted to PMPRB so it could be included and evaluated as well. Let's include all of it, then.