International Trade committee  If you compare us internationally, we fall way below Europe in terms of public drug coverage. We're at just under 40%. Most European countries are around 70% to 75% public drug coverage.

International Trade committee  It's going to vary in every country, but I don't think much of it is actually. The good thing about NICE in the U.K. is that the National Health Service there, for example, does provide universal coverage for everybody who's covered by the NHS.

International Trade committee  It's a hodgepodge basically, and it's not very good coverage.

International Trade committee  Well I was implying that, I think, in what I said about the plain-packaging legislation. I think that was a very unfortunate back-down on the part of the Canadian government. For all these years since then we've not had really effective plain-packaging legislation. Australia, as you probably know, in 2011—

International Trade committee  What I was saying was that the government should maintain policy flexibility to put in place any evidence-based approach that will deter smoking. Plain packaging is one of a number of different approaches. I would support all of them if they were shown to work.

International Trade committee  The cost item is a major one. As I said in my presentation, just on pharmaceuticals, we're now spending at total of $27.7 billion and they are now the second largest component of our total health spending. That amount has gone up quite dramatically over the last 25 years. Cost is certainly going to be a major concern for governments looking at a national pharmacare program.

International Trade committee  Well, there's a long history here. Going back to 1969, we passed legislation providing compulsory licensing for Canadians, and that system applied until basically 1987. During that period, the role of drug costs in our total health care budget was effectively controlled and indeed went down.

International Trade committee  There are several provisions, but the one that I think is most troubling, I guess from an ethical point of view, is the extension of data exclusivity. This basically means that a generic company doesn't have access to the information, the clinical trials, on which a drug that's coming off patent was originally patented for....

International Trade committee  Yes, just under half.

International Trade committee  I don't have the numbers right in front of me, but it's the largest component, as I recall. Basic scientific research is a relatively small component. Developing marketing and also doing some clinical trials are the other major elements, so we're not getting much scientific research.

International Trade committee  Well, a commitment to nothing beyond TRIPS.

International Trade committee  One of the issues that is apparently being discussed and potentially could arise under the new TPP is the possibility that there could be restrictions on the formularies that, in our case, the provinces have. As you know, in the U.S., under Medicare Part D, they're not allowed to use their bulk purchasing to actually negotiate lower prices with the drug industry.

International Trade committee  I'll be quick as I can. Thank you. Canada’s balance of payments in pharmaceuticals has also deteriorated. In 1987 under compulsory licensing, we had a trade deficit of $334 million. In 2012 our trade deficit had ballooned to $7.6 billion. Once our Patent Act changes were locked in by NAFTA and TRIPS, the multinational drug corporations had little reason and no obligation to locate production, employment, and research and development in Canada.

International Trade committee  Okay. This is the last point I'd like to make. In terms of investor rights, the TPP does go beyond NAFTA, and there are some very important issues here that we need to address, particularly, for example, the Eli Lilly challenge to Canada's court decision regarding its patents. The TPP proposes essentially to fold in IPRs within the definition of intellectual property, which is far beyond what we have in NAFTA and would expose us to further trade challenges.

International Trade committee  Good afternoon. Let me begin by thanking the committee for giving me the opportunity to express my views today on the proposed Trans-Pacific Partnership trade agreement. This initiative has important public policy and public health implications, which I believe do merit extensive examination.