Industry Committee on May 8th, 2008

[Rob Livingston]

The actual industry figure is about $1.2 billion. The $120 million was my company, Merck Frosst.

[Raymond Simard, Liberal, Saint Boniface, MB]

Your company. So $1.2 billion.

Are you having a difficult time having access to top-quality researchers? Is that an issue here?

[Rob Livingston]

In certain areas. I know our particular company is finding it tougher to get MDs, especially with expertise around clinical development. I guess that's understandable, because I think we've all experienced shortages in family physicians. There's a big shortage, a big demand for those. We often need that expertise in our clinical trial and some of our other development processes. That's one particular area our company finds.

In terms of the industry overall, I don't know what data we have on that.

[Normand Laberge]

In a recent survey of our members, we asked about the biggest hurdles in that regard, and access to proper researchers was not deemed to be a major problem. Canada is doing very well in that regard, and recent government investments in education and basic research as well are helping.

So Canada is performing pretty well in that regard. Yes, we could be first instead of being in the average. It is the other hurdles that are hurting the most in bringing down the ratio of investment. Even though we are maintaining the average of 10%, it is low recently because of those new hurdles, which were not in existence 19 years ago but were put in place recently. The research base is not a major issue right now.

[Raymond Simard, Liberal, Saint Boniface, MB]

That's interesting, given that most of our witnesses here indicated that it was an issue. I'm glad to hear that your industry is not going through that.

Here is one quick question to Ms. Gowman. You were talking about industry and university research not being aligned. Can you explain that to us? We seem to be hearing lately that they are working together quite collaboratively.

[Linda Gowman]

What I said was that they weren't aligned to timelines, and sometimes not also to intellectual property needs and the need to retain confidentiality about some things that are strategic business advantages. We find sometimes with universities that keeping projects on track in a timely fashion, not having them be interrupted by whatever the academic schedule is, is a bit of a challenge. Sometimes research that is done in industry is deemed to be somehow second-class, for whatever reason, even though I'm biased to think that it's not.

So I think we have a bit of a cultural mindset there, but that universities are coming around to the idea that working with industry sooner rather than later in research forums—we're not talking about pharmaceuticals here, but about research that's closer to manufacturing—is an efficient thing to do and actually a good thing to do.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Simard.

We'll go to Mr. Stanton, please.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

I'm going to split my time with Mr. Van Kesteren so that we can get some other questions in.

Mr. Keon, I note you've asserted rather strongly that there's been no consultation on this latest bulletin that was posted in the Gazette. But in fact, the process that is going forward here is really just a reaffirmation of existing policy as it relates to the pre-2006 regime that the government had. As a matter of fact, I note a copy of a letter in which the Quebec Minister of Economic Development indicates, in the translation, his support for this government's latest efforts in guaranteeing the integral respect for the modifications industry ministers had supported as late as October 2006.

There seems to be a disconnect here. You're saying there's really no consultation, but in fact this is a process that was already in place. Here you have a provincial minister who is agreeing and supporting the government's position in keeping this intact. How would you speak to that disconnect?

[Jim Keon]

I'm not aware of the letter, but I know the Quebec Minister of Industry has been very supportive of both the brand and generic industries. There are strong generic and brand industries in Quebec; I think that's one point to mention.

The decision of the Supreme Court reaffirmed that irrelevant patents should not go on a patent list. That was completely consistent with the government changes.

What the government is doing now, again surprising us—investments have been made in products with expectations that the law had been clarified—is undoing the Supreme Court decision, saying, for patents prior to the changes we made in 2006, we're going to let those irrelevant patents come back on to a patent list at Health Canada that automatically will block a generic. It's a very major change, and we were completely surprised.

[Bruce Stanton, Conservative, Simcoe North, ON]

I want to get to my colleague here, but you also have some transition proposals in place to make sure those generic proposals are still in place with Health Canada, don't you?

[Jim Keon]

I'm not sure I understand your question. This change was a complete surprise to us. It's going to allow patents that had previously been determined to be irrelevant to our products to go back on the list and delay us from coming on to the market. It's bad for our industry. We made investments based on the law, and it's not good for provincial programs or other insurers who have to pay for this.

[Bruce Stanton, Conservative, Simcoe North, ON]

In fairness to my colleague, we'll move on. Thank you, sir.

[The Chair, Conservative, James Rajotte]

Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

To continue on, I wonder if we're digressing. I don't mean to make light of the seriousness of this situation, but this study is to improve our R and D in this country and to enable companies to be able to do that more and more. I'm wondering if this battle might be fought another day.

I do want to make one comment. When I look at the gold nuggets that are up for grabs--Lipitor, Viagra, and Novasc--are these developed in the States? Is that possible?

Maybe I should ask the pharmaceuticals. Were these drugs developed in the States?

[Normand Laberge]

I can't answer that question. It's related to specific companies, and I don't have the information.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Is it a fair assertion that maybe the majority of new drugs are developed in the United States?

[Rob Livingston]

I don't think so. I think they're a global effort.

Again, going back to our experience, does one jurisdiction have the lead in the development? Yes. Is Canada in a position to get that lead? Yes. I've identified about half a dozen where we have been.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

My next question would be with respect to the generics in other countries, specifically the United States. Will they be able to copy these drugs?

[Jim Keon]

Yes.

[An hon. member]

What are the rules?

[Jim Keon]

There are rules in the United States regarding patents, and to some extent they're different from those in Canada. But clearly the generics will be genericizing these products as well.

The one point I would make is that because of the laws that Canada had 20 years ago, it's thought that Canada is a generic-friendly legislative environment. In fact in the United States, as I mentioned, 67% of all prescriptions are now filled with generics. It's only 50% in Canada.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Can we get some information on that? That's a key to this question too.

But I want to move on to another issue. I haven't had much of a chance to talk.

[The Chair, Conservative, James Rajotte]

Last question, Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

You developed this new product that combats E. coli. Is there anything new on the table? This is a great idea. I think you're making a great recommendation. It makes good sense. Have you got something new? Are you possibly working on E. coli with poultry?

[Susan Goebel]

As with any product, you start going to the market with phase one, but there is usually a development plan behind the scenes that talks about the second and third generations.