Bill C-378 (Historical)

An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions)

This enactment places certain restrictions on the export of drugs described in Schedules D and F of the Food and Drugs Act.

Health

[Carolyn Bennett, Liberal, St. Paul's, ON]

Mr. Speaker, last week, President Obama's budget signaled support to open up the cross-border medicine trade.

In the last session, the government refused to support my private member's bill, Bill C-378, to protect the Canadian pharmaceutical supply from being bulk exported south of the border.

What is the Minister of Health doing to protect Canada's drug supply to ensure that we do not become the U.S. discount drug store?

Food and Drugs Act

[The Deputy Speaker, NDP, Bill Blaikie]

The House will now proceed to the taking of the deferred recorded division on the motion at the second reading stage of Bill C-378, under private members' business.

The House resumed from November 27 consideration of the motion that Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions), be read the second time and referred to a committee.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Mr. Speaker, I am pleased to wrap up debate on Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions).

It is a bit surprising to hear my Conservative colleagues use words like “unlikely” and “not emergent” when the bill is about prevention and giving the minister the tools he needs in the event of a problem, particularly as we are in flu season right now.

Members will recall how two years ago, when one of the batches of American flu vaccines did not work, we ended up with all of our supplies here in Canada at risk. Particularly, our neighbouring states, the governors and the public health agencies there would have been able, without these tools, to wholesale import vaccines to their states.

I ask my colleagues here in the House to support Bill C-378. This bill is merely aimed at giving the Minister of Health an ability to control the cross-border trade in prescription drugs and vaccines. As has been said, this is only one small step in terms of being able to control some of the Internet and walking trade, in terms of individuals, that the former minister of health pointed out.

The bill would make it an offence under the Food and Drugs Act to export prescription drugs in prohibited circumstances. By amending the Food and Drugs Act, the legislation will protect Canadians.

Canada, as we have said many times, cannot be America's discount drug store. Canada needs to protect itself from the dramatic expansion of importation by the U.S. of drugs intended for our patients.

The prospect of the U.S. legalizing large-scale purchases from our domestic supply is real. The threat to Canada's drug supply increased on January 10, 2007, when the bipartisan group of U.S. senate and house members introduced the critical drug importation legislation. U.S. Senators Dorgan and Snowe, and Representatives Emerson and Emanuel indicated the new pharmaceutical market access and drug safety act had support from more than 30 groups, including AARP, Families USA and unfortunately, the support of most of the presidential candidates.

The group's news release added that the legislation would allow individuals to directly order medications from outside the U.S., including from Canadian pharmacies.

On January 10, U.S. Senator David Vitter, with the former minister of health, pointed out that his main objective was to undermine and destroy the drug pricing regime here in Canada. He reintroduced his comprehensive prescription drug reimportation legislation, the pharmaceutical market access act, which is similar to the legislation introduced in the house of representatives on the same day.

On October 31, 2007, the U.S. senate adopted Senator Vitter's drug reimportation amendment to the U.S. senate labour, health and human services and education department appropriations bill. In addition to foot traffic, Vitter's amendment would also allow mail order and Internet importation from Canada. The language was stripped from the conference report, but the conference report was vetoed. Next steps and timing remain uncertain.

In July of this year Senator Vitter introduced similar amendments to the homeland security appropriations bill that would allow personal importation for Canada. In December, conferees will meet to discuss the different house, with no amendment, and senate, with amendment proposals.

When I was in Washington, it was very clear they are not going to let this go away. These members of Congress and the senate are very keen to do the job of allowing cheap drugs from Canada.

These legislative proposals pose an imminent and serious threat to the security and integrity of Canada's drug supply and a genuine threat to the health of Canadians. Of equal importance, this legislation represents a threat to American patients by allowing relinquishment of necessary community based medication monitoring and management, and increasing risks from the potential of counterfeit drugs that the WHO is very worried about.

Allowing bulk prescription drug imports would not significantly reduce U.S. prescription prices for very long. A recent University of Texas study concluded, based on the worse case scenario, that Canada's stocks of prescription drugs would amount to a 38 day supply for the United States assuming all U.S. medications were Canadian sourced.

Once U.S. demand depletes, Canadian stock prices will almost certainly rise, narrowing or possibly even eliminating the difference between U.S. and Canadian prices. The issue of bulk exports--

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, as my colleague, the member for Selkirk—Interlake, pointed out, hopefully by now several U.S. drug importation bills have come and gone. Bills on drug importation do not have a great life expectancy.

We have been hearing about bulk importation of drugs from our neighbour south of the border for more than five years now. During that period, many such bills have been introduced, one after another, and none came close to being adopted. In fact, they all died. They died because they were poisoned by members of Congress. They died because they became unpopular. They died because they were not workable. Why? Because importing drugs manufactured for other markets is simply not the solution.

Again today we see concerned U.S. health care providers commenting in the media. They raise their voices because the harsh reality of pricey prescription drugs in the U.S. is the major reason why people do not take their medication as prescribed, even forcing some people to choose between their medicines and other necessities.

The solution they propose is to control and reduce drug prices by involving Congress and federal agencies. They are not proposing to import drugs from foreign markets. In fact, they are openly and bluntly opposing such action.

Some hon. members present here today remain of the position that the U.S. will imminently open its border to cheaper drugs from other markets. Frankly, I do not understand how they are arriving at such a conclusion.

There is no doubt that Canadians must continue to have access to the prescription drugs they require. The government is committed to the health and safety of Canadians, including protecting an adequate supply of prescription drugs. However, I fail to see how spending taxpayer money to create unneeded laws to address purely hypothetical scenarios would serve that end. Should the time when the government would need to take action, we would want a measured and balanced approach to protecting our drug supply.

Bill C-378 is underdeveloped. Its non-measured, broad-brush approach raises fundamental objections. These are substantive in terms of trade law obligations and procedural in terms of regulation-making processes.

By contrast, the leading U.S. bill to legalize drug imports appears to assiduously cover the waterfront, in terms of administrative details.

I know hon. members are aware that it is most unusual to seek to directly amend regulations in Parliament, as Bill C-378 would do. Such an approach would bypass the Canada Gazette, related consultations and other review processes for regulations.

However, more important, Bill C-378 would not provide any tools for implementation and, worse, would not provide any ministerial discretion to ensure that any government response would be proportionate to the risk.

The member for St. Paul's has been talking about the Tamiflu situation of 2005, when Internet pharmacies were promoting and selling this drug to patients outside of Canada. I am deeply confused as to why this past situation is being offered as one example for moving forward with Bill C-378. I am confused because C-378 would still allow Internet pharmacies to sell drugs to the U.S. It would allow for truckloads of drugs to cross the border, even should shortages occur in Canada.

In short, the bill would prohibit exports and then would exempt most of the exports it purports to prohibit.

It is clear that Bill C-378 would not meet its stated goal. We would find ourselves having to come back in the House to discuss yet another bill, one that would be measured, one that would be consistent, one that would be effective at protecting our drug supply, one that would be carefully crafted knowing the final form of a U.S. bill, not one based on uncertain and ever changing U.S. House and Senate proposals about drug importation.

Canadians have said that they were concerned about cross-border drug sales, but they would be even more concerned with having Bill C-378 as the government's response.

Supporting the bill is not about standing up for Canadians.

Again, I want to reiterate and underscore that the government is committed to effectively monitoring and assessing potential risks to our drug supply associated with cross-border drug sales.

However, it is important not to overstate those risks and it is premature to introduce or pursue new legislation to restrict drug exports when there is no existing threat to the Canadian drug supply.

Real obstacles to the adoption of an effective U.S. drug importation bill remain, particularly the known objections of President Bush and many republican legislators. However, even if the U.S. were to adopt the current leading drug importation bill, its provisions would not allow bulk imports to start until one year had passed, providing the necessary window for this government to develop a measured and relevant approach to protecting our drug supply.

The U.S. bill also contains an extensive oversight regime, including inspections of exporting facilities that would be expected to limit and/or slow the uptake of its enabling provisions. Cost recovery from exporters and importers would also have an impact on the potential cost savings to consumers.

However, what is important to understand is that the drug importation proposal is not at the forefront of discussions in the U.S. It is being used solely as a lever to bring U.S. drug manufacturers to the negotiation table to lower U.S. drug prices.

The real leading proposal is to allow the U.S. medicare program to negotiate drug prices directly with manufacturers, which it is currently prohibited from doing. We know and the U.S. Congress knows that the issue the U.S. health care system is facing is high drug prices.

In summation, we have been hearing for years about drug import proposals in the U.S., but none survived. What we see and what we hear today is a continuing debate about high drug prices in the U.S. and this is a situation that the U.S. will need to resolve within its borders.

Candidly, there is no reason for spending more of the valuable time of hon. members to discuss a risk that does not exist and, worse, to discuss a bill that would not even protect our drug supply, even if there were a risk.

The interest of the member for St. Paul's on this issue is very much appreciated and noted, but for the reasons outlined, the government cannot support Bill C-378.

[Ujjal Dosanjh, Liberal, Vancouver South, BC]

Mr. Speaker, I am delighted to rise in support of Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions).

This is a very important issue. I wrestled with it in my previous incarnation as the minister of health and introduced similar legislation. However, we did not have time to deal with it successfully.

Canada has a regime that has been developed to protect, at reasonable prices, the supply of drugs for the needs of Canadians. The instrument we have used for that is the Patented Medicine Prices Review Board. I believe the review board has stood us in good stead over the last number of years and has kept the supply of patented drugs available to Canadians at reasonable prices.

Because the prices are reasonable and because the politicians in the U.S. refuse to use similar kinds of devices to control the prices in the U.S., they are busy trying to devise plans in many states and, in fact nationally to try to legalize and legislate the wholesale imports of drugs from Canada. If they are successful in continuing to take bulk exports of drugs from Canada, I am afraid it may endanger the very supply of drugs at reasonable prices for Canadians. In that sense, this legislation is very important for all Canadians.

I want to commend the member, my colleague, for bringing the legislation forward in the House. When we dealt with this last, the sale of drugs at reasonable prices from Canada into the United States had gone into hundreds of millions of dollars and had increased.

I know those sales have gone down as the dollar has gone up. However, Canada faces a very real threat from legislators in the United States. They are attempting, in different ways, to deal with this issue and allow the continued importation of these drugs from Canada into the United States.

There are other aspects to this matter that bear scrutiny. For instance, we have a number of doctors who are engaged in prescribing medication to clients or “patients of their's” without examining the patients, or speaking with them, or physically touching the patients in examining them. That has been held to be unethical for some doctors by doctors' bodies across the country.

It is the same with the pharmacists. Pharmacists then fill those prescriptions, dozens and hundreds every day, knowing that they are signed by the same doctor or same number of doctors across the country. We believe some of those practices are unethical.

Some disciplinary bodies have been crying out for reform by and assistance from the federal government so they do not have to deal with the issues. They do not have the resources to investigate those kinds of unethical practices, and there are many, and then successfully discipline their members who may be involved in these questionable practices.

The way to deal with this issue is for the government to support the legislation so we can then prevent this danger becoming real, if does become real.

Many attempts have been made to make bulk imports into the U.S. legitimate, and we are familiar with those. Many of the U.S. presidential candidates have proposed and dozens of U.S. jurisdictions at state and local levels continue to introduce measures designed to help local citizens, government employees, retirees and others to buy Canadian prescription drugs.

Any of these measures could trigger the unanticipated shortages in Canadian supplies. Some of these programs include: developing websites that recommend Canadian Internet pharmacies for local citizens, employees and retirees and their families to purchase from; certification of Canadian based pharmacies as “qualified” for use by drug benefit program members or by local citizens; and the review of city/state drug benefit programs with a view to hiring Canadian firms to supply those programs with prescription drugs.

On October 31, the U.S. Senate adopted U.S. Senator David Vitter's drug reimportation amendment to the U.S. Senate labour, health and human services and education department appropriations bill. As he stated, “This provision prevents HHS officials from blocking hard working Americans from bringing back prescribed medication from Canada and will help bring more affordable prescription drugs to residents”.

In fact, in the House of Representatives, the agriculture appropriations bill was amended to include language that prevented the FDA from enforcing importation laws on prescription drugs from anywhere, including Canada. This legislation may be stuck in the appropriations process for other reasons and may roll into next year, but the language remains a serious concern as do the consequences that flow from this language.

These bills in the Congress followed legislation passed and signed by the President on October 4, 2006. The bill effectively created an open border for individual Americans to fill their prescription drug needs from Canada's national supply. A key provision of the new legislation prohibits the U.S. customs services from intercepting personal use quantities of prescription drugs at the border through foot traffic.

There are many other examples of what the U.S. governmental bodies, including state legislatures, have been trying to do, and that is to undermine the Canadian supply of drugs available to Canadians at reasonable prices.

It is open to the U.S. legislators and politicians to do exactly what we have done wisely for Canadians. We have protected the supply of drugs for Canadians at reasonable rates by using devices such as the Patented Medicine Prices Review Board. It is open to the U.S. to do the same. Why the Americans are not doing that beats me. I fail to understand why they are not taking the steps within their power to deal with controlling and regulating patented drug prices in their own country.

When I visited the United States of America as minister of health, David Vitter told me that he was interested in dismantling the regime we had in place for controlling and regulating the prices at reasonable rates for drugs for Canadians. That is the real intent behind the fact that they do not want to do anything within the U.S., but they want to undermine our supply and our devices that we use to control our prices at reasonable rates for Canadians.

Therefore, I suggest we support this bill, which would protect the supply of drugs for Canadians at reasonable rates.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, I appreciate this opportunity to speak to Bill C-378.

I would like to bring to hon. members' attention the key specific facts to consider with respect to Bill C-378, especially with events that are occurring in the U.S. Congress. In doing so, I wish to draw attention to the U.S. political environment and provide further insight on why U.S. developments are unlikely to affect our drug supply.

I believe that one of the reasons this bill was introduced was to address concerns over potential American legislation to allow the importation of drugs into the U.S.A. from Canada. There are concerns that such legislation would cause drug shortages here in Canada. However, it is premature and overly pessimistic to draw such conclusions at this time. This bill is the wrong response to a problem that does not currently, and may never, exist. I believe that any concern with potential impacts on the Canadian drug supply need to be balanced with a calm assessment of the situation.

I do not have to remind hon. members that 2008 is a major election year in the U.S. While the race for the White House receives the majority of the media attention, most members of Congress are also facing re-election.

As we are all no doubt aware, American legislators sponsor a number of bills in Congress to increase their profile before election time. Understandably, this activity increases closer to the election date. While we can expect to see more U.S. legislative activity in the coming months, this is unlikely to lead to an increased likelihood of bills being passed.

Most bills introduced in Congress do not make it into law. They die at committee level or are amended so many times that they become too unpopular to pass. Even if they are passed by one chamber of Congress, they could be defeated by the other chamber. Also, a bill passed by Congress will not be effective unless the executive branch appropriately directs the U.S. public service on how it should be interpreted.

There is no doubt that high prescription drug prices are a major political issue in the United States. Some proponents of the leading proposal to legalize imports have been open in stating that this is as much a pressure tactic to reduce U.S. domestic drug prices as about importation.

One way they are seeking to reduce domestic drug prices is by pressing for federal negotiation with manufacturers over the prices paid by the federal department of health and human services for those drugs covered by medicare.

Existing U.S. law prohibits medicare price negotiations. But a bill to require the U.S. government to negotiate medicare drug prices was passed in the House of Representatives with significant bipartisan support. While the Senate finance committee voted in favour of this bill, there was not enough support for this version to get passed in the full Senate.

For leading congressional Democrats as well as a number of Republicans, seeking the ability to negotiate prices for medicare drugs is a much higher priority than legalizing drug imports. Democrats and Republicans supporting medicare price negotiations could modify their bill or attach its language to another bill in order to further its progress through Congress.

The leading drug import bill before Congress, the Dorgan-Snowe bill, is stalled at the Senate committee level. The bill's sponsors have tried to go around the Senate committee by proposing amendments that would piggyback their drug importation bill onto another bill meant to overhaul the U.S. Food and Drug Administration. The Food and Drug Administration bill was passed by the Senate with the drug importation provisions. However, the Senate added a poison pill amendment, giving the U.S. administration the power to prevent drug imports until they certify that they are safe, and that such importation could lead to drug savings.

Therefore, it is unknown at this time if the Dorgan-Snowe bill would have any effect even if it became law. We are a long way from a bill legalizing bulk imports being approved by the White House without such a poison pill being included.

Finally, even if the Dorgan-Snowe bill were enacted, and the U.S. administration certified drug safety and cost savings, it would take 12 months before any bulk imports could occur. As such, there would be at least a year for this government to prepare for any concern with the potential impact of bulk exports. But given the current U.S. administration's strong reluctance to take action that would facilitate drug imports from other markets, it is highly unlikely that the Dorgan-Snowe provisions will ever, and I repeat ever, come into effect.

In the unlikely event that those provisions were brought into force, it should be noted that they would provide for imports from a number of countries, not just Canada. As such, the impact of any import legalization would be distributed over many countries. Eligible countries for drug imports would include many of the European Union countries, as well as Australia, Japan, New Zealand and Switzerland.

Again, drug imports from other countries such as Canada are neither a realistic nor a sustainable solution. U.S. federal legislators realize this and are using such legislation for their own political gain.

Regardless of the U.S. situation, Bill C-378 would not prohibit drug exports to the U.S. by foot traffic or Internet pharmacies, nor by drug manufacturers. If the member for St. Paul's is so concerned with the Canadian drug supply, I fail to see why she would want to allow such practices to continue by specifically exempting them from this bill.

As I have indicated, it is important to put the situation south of the border in perspective. That said, it is also appropriate and prudent for the government to continue to monitor the situation with respect to cross-border drug sales and to be prepared to act in a measured fashion if and when such action is indicated. However, we have not arrived at that point, and we are unlikely to get there anytime soon.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I rise to speak to Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions).

Canadians are very aware of the quality of our health system as well as our free access to most of its features, and that is in very stark contrast to the market-driven system in the United States.

As we know, there has been a surge of interest from Americans, particularly seniors, who, because of their fixed incomes, find drug pricing in Canada particularly inviting. Bus loads of seniors come to Hamilton to visit and have prescriptions filled.

I am all for being good neighbours and helping our American cousins to the south as much as we can. In fact, in many ways, their needs are much higher than those of most Canadians, particularly when it comes to health care in general and prescription costs in particular.

On the population side, Hamilton, at approximately 500,000, is not huge, but we are friendly, so I want to stress this point. The purpose of the bill is not to shut the border to our American cousins. In fact, American tourists who pick up a prescription or two are not a drain on our druggist's ability to provide prescription services to our hometown clients.

Primarily because of pharmaceutical sales on the Internet and the visits by these bus loads of American tourists picking up prescriptions, combined with the warnings of an anticipated flu pandemic, Canadians are asking about our supply. Where would they stand if a significant part of our drug output was sent south and then there was a shortage in Canada?

We know that earlier this year the United States moved to introduce the pharmaceutical market access and drug safety act. It appears its motivation was the fact that the American government wanted even greater access to the importation of cheaper pharmaceuticals. As I have already related, that door has been open to bulk purchases, and the American act appears to be intended to codify the open door policy by making it official.

This means the door has now been opened further to allow Canadian firms, those that wish to do so, to increase their bulk drug sales to the U.S. On the surface, that may be wise. The increase in employment would be wise in most people's opinion, but is that really a good thing?

On the surface, it appears so, but consider for a moment the impact on Canadians if we were hit by a flu pandemic, by SARS, or another unexpected outbreak and all our stock had been sold to the United States. That goes to the heart of the intent of the bill.

The production of pharmaceuticals is a precise and painstaking process that requires time. It is not as simple as perhaps it might be for one of Hamilton's manufacturing plants to simply add a shift to meet new demand. Pharmaceutical products are often more than not made from scarce biological sources or it cannot be turned out for mass production on a scale to match the needs of 30 million Canadians and 300 million Americans.

One area I have yet to touch on is product safety and border inspections. It is my understanding that of the products crossing our borders now, our security folks are only able to check about 1%. In a time of counterfeit drugs, combined with a freer movement of goods being promoted by both sides of the border, that is a recipe for a very serious concern. We all see the results of ineffective monitoring of the toys imported from China on a near daily basis. Imagine the risks posed here with the transport of pharmaceuticals.

Members may recall the speed with which SARS moved into the Toronto hospital system and elsewhere. We were not only unprepared, but we were shocked by its rapid advance and ravaging effects. It is one thing to struggle against a new and unknown invader like SARS, but it is quite another to allow the much needed protection for Canadians to become a simple commodity to be traded away gratuitously.

In many ways, the pharmaceutical industry survives on its own ability to forecast and predict need. A good example is our yearly flu vaccine. Companies are able to meet the demand because the flu season is a predictable event. Companies for the most part though cannot stockpile medications due to the short life expectancy of many of the ingredients.

In short, we must find and maintain that balance between keeping Canadians protected and having the ability to still export to some degree.

I have spent a large part of my time tonight speaking about the American wants and needs, so I would like to speak briefly to Canadian needs. Just like our American neighbours, many low income or fixed income Canadians are living under a financial strain these days. We refer to the prosperity gap regularly in this House.

Across my riding of Hamilton East—Stoney Creek we hear of far too many people who, when faced with a costly prescription not covered by a plan, simply turn and walk away when they are told the amount by the pharmacist. They just cannot handle it.

In fact, I was in the Rosedale pharmacy in my riding a couple of weeks ago, picking up a prescription of my own. I could not help but overhear a young man talking to the clerk as he dropped off his prescription. He was bent over in pain. He said he was having terrible pain, a problem with his back. It was so bad that he just did not know how to handle it. He had an ear infection as well.

He asked the young woman what the price of the prescribed drugs would be. When he was told it was $28 for the antibiotic and much more for the muscle relaxant and the sleep inducing drugs he needed so badly, even though he was in serious pain he said, “Fill the antibiotic only, that's all the money I got”. Like anybody in the House, I offered to help him that one time, but typical of a hard-working person of Hamilton, he said, “No thanks”, and he shuffled over and sat down while he waited for his antibiotic.

As legislators, it is not only time that we looked at such matters as prescription drug exports, but we must invest in a national universal drug plan to work hand in hand with our health care system to ensure that people like that young man in Hamilton receive the medications they so desperately need. No one should suffer needlessly when the rest of us, through the government, are ready and able to bear part of the load with them.

In closing, I would say that Bill C-378 moves us a long way to finding and maintaining that balance between supply on one side and demand on the other. I want to commend the member for putting forward this important bill. I believe that as responsible legislators we will do the right thing for Canada and will vote to protect the vital supply of pharmaceuticals.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Mr. Speaker, at the outset, I would like to say that I agree with my colleagues from Québec and Brossard—La Prairie, who spoke earlier about the bill introduced by the member for St. Paul's, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions).

As my colleagues explained earlier, even though such a threat is not yet a reality, this bill is designed to minimize the possibility of Canada's supply of prescription drugs being exhausted by imposing severe restrictions on exportation. Under the NAFTA framework, partners to the agreement can limit certain exports to avoid a shortage in order to ensure public safety. In other words, the bill before us today would enable us to apply that framework.

The bill would amend the Food and Drugs Act to give the Minister of Health the power to prohibit bulk exports of prescription drugs. Specifically, Bill C-378 would make it possible to ban the export of prescription drugs listed in schedules to the Food and Drug Regulations.

The bill also specifies the kinds of fines offenders would be facing and it provides for a number of exceptions. For example, a drug described in one of the special schedules of the Food and Drug Regulations could still be exported from Canada if, for instance, it was not intended for human consumption or not manufactured or sold for consumption in Canada, under certain conditions of course.

I should point out that this bill targets primarily the western provinces, which have laxer practices. Quebec already has in place mechanisms prohibiting the cross-border trade in prescription drugs, as far as individual prescriptions are concerned. Supply problems and higher prices as a result of laxer practices in some provinces could, however, also affect Quebec.

Nevertheless, I want to make it clear that the role of the federal government in this case should be limited to regulating drug imports and exports. Under no circumstances is the federal government authorized to interfere in doctor-patient, pharmacist-patient or doctor-pharmacist relationships.

If the possibility of a drug shortage is being considered today, it is because of the significant price difference between drugs sold in Canada and those sold in the United States.

It is important to add some qualifications. As the member for Québec commented back in June and the member for Brossard—La Prairie reiterated in early November, the rate of exchange is no longer favouring the Americans, making it less attractive for them to buy on this side of the border. This will be especially true if the dollar remains strong or continues to increase in value, and consequently the threat of a drug shortage should lessen.

Still, even if the rise in value of the Canadian dollar has narrowed the price differential between Canadian and American products, the fact remains that having appropriate checks and balances in place in Quebec and Canada will ensure lower prices on this side of the border. American patients might therefore still be tempted to buy in Canada.

The fact is that, in the United States, pharmaceutical laboratories are allowed to price their products freely, while in Canada, the Patented Medicine Prices Review Board ensures that prices are not excessive.

Similarly, in Quebec, the Conseil du médicament, an organization directly under the Quebec department of health and social services, is tasked with making recommendations on establishing and changing the price of prescription drugs.

Drug manufacturers must submit a request to the board in order to increase the price of a drug. The board will assess the request, which must meet certain criteria. The drug must have been registered on the list of drugs for at least two years and the manufacturer must offer its best price from across Canada. It must also have a distribution agreement with the Quebec department of health and social services. Furthermore, the amount of the increase requested must not exceed a certain maximum rate.

If these conditions are met, the Conseil du médicament recommends that the Quebec department of health and social services accept the price increase.

Thus, as I was saying earlier, the existence in Canada and Quebec of independent methods for price setting is still responsible for a considerable gap between American prices and Canadian prices. This translates into a very large cross-border drug trade between Canada and the United States, a trade that is now facilitated by the Internet.

It is therefore no surprise that, according to the Ordre des pharmaciens du Québec, the on-line pharmaceutical market has reached over $1 billion a year in Canada.

Since Quebec and the provinces are responsible for regulating medical and pharmaceutical practices through their colleges of physicians and societies of pharmacists, the rules that apply to this trade are not the same everywhere.

Online sales of drugs are especially brisk in the western provinces, which have less stringent rules.

In Quebec, the code of ethics of physicians stipulates that in order to write a prescription for a patient, a doctor must evaluate the patient to establish a diagnosis and formulate a treatment plan. The doctor must also provide information to the patient and obtain consent. Under the Pharmacy Act, a pharmacist can sell drugs only to patients who have prescriptions written by an authorized person.

The prescribing and sale of a drug therefore bind both doctor and pharmacist. Both are legally responsible for this professional act, and they risk prosecution if they fail to live up to the standards of their professions.

As my hon. colleague from Brossard—La Prairie pointed out in this speech on November 2, physicians have unfortunately been struck off the roll of the Collège des médecins du Québec in the past for violating the rules of professional conduct to which they are subject by illegally prescribing drugs to Americans via Internet. Needless to say that never having met these patients hardly qualified as complying with the rules set out in their code of professional conduct.

It is important to note that, according to a number of analysts, the expansion of the virtual drug market in the United States will eventually influence drug prices in Canada. These experts say that, to make up for the loss of income from selling at a lower cost to Americans from Canada, the pharmaceutical industry might increase its prices on the Canadian market.

Even if the Conseil du médicament is responsible for administering the price regulation process in Quebec, as I indicated earlier, and the Patented Medicine Prices Review Board plays a similar role in Canada, the pharmaceutical industry's threats are not to be taken lightly.

Companies like Pfizer, Wyeth, AstraZeneca, GlaxoSmithKline and Eli-Lilly have already taken tough action, reducing their exports to Canada, for fear of losing a significant income by allowing their products to cross the border again at a lower price.

I should also mention that increased pharmaceutical sales on the Internet could result in a shortage of pharmacists.

The House resumed from November 2 consideration of the motion that Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions), be read the second time and referred to a committee.

[The Acting Speaker, Conservative, Royal Galipeau]

It is with regret that I interrupt the hon. member but the time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

When Bill C-378 comes back for study, there will be seven minutes left to the hon. member for Fleetwood—Port Kells.

It being 2:30 p.m., the House stands adjourned until Tuesday, November 13, 2007 at 10 a.m., pursuant to Standing Orders 28(2) and 24(1).

(The House adjourned at 2:30 p.m.)

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Mr. Speaker, I am pleased to rise today on behalf of the constituents of Fleetwood—Port Kells to participate in the debate on Bill C-378.

The bill has been proposed as a response to developments in the United States. I think it is important that we understand the U.S. situation before deciding how to address it.

This proposed U.S. legislation to legalize drug imports is motivated by shortcomings in the American health care system. These deficiencies have left a sizeable number of Americans exposed to unmanageable prescription drug costs.

As Canadians, we value social supports and health care that seeks to be inclusive of all Canadians. So, while we are not unsympathetic to the issue of Americans without drug insurance, I think we can agree that importation of Canadian sourced drugs is simply not an adequate solution.

I would like to talk about the important role that prescription drugs play in our health care system.

There can be no denying that drugs have brought tremendous health care advances that benefit all Canadians. However, in addition to protecting an adequate supply for Canadians, we must also be vigilant in ensuring that costs remain manageable.

In recent years, drug costs have accounted for an increasingly large portion of expenditures in the Canadian health care system, with expenditures growing faster than any other component of health care. Drugs are now the second largest expenditure in our health care system.

According to the Canadian Institute for Health Information, total expenditures on prescribed and non-prescribed drugs in Canada is estimated to have exceeded $35 billion in 2006. This includes public and private insurance, as well as out of pocket expenditures. Spending on prescribed drugs in 2006 was estimated at more than $21 billion. This represents almost 84% of total drug expenditure and is nearly 20% more than in 1985. Spending on all drugs in 2006 amounted to an estimated 17% of total health expenditures in Canada, outstripping what we spend on doctors.

That said, Canadian patented prescription drug prices are in line with other major industrialized countries, except--

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, this bill is about one simple thing. It is about meeting the needs of Canadians who want to feel secure that their prescription drugs and vaccines are there for Canadians. Let me re-emphasize that. This bill talks about security of supply of drugs and vaccines for Canadians.

I will not get into a lot of the technical details of the bill. The member of Parliament for St. Paul's went to great lengths to explain some of the technical details of the bill, but I want to talk about it in layman's terms.

I congratulate the member for St. Paul's for bringing forward this bill. Previously she was a minister of public health and therefore she understands the needs of Canadians on the ground. She is a medical doctor and therefore she knows first hand how important it is that Canadians are able to get not just drugs, but the most recent drugs, the most effective drugs in terms of meeting Canadians' needs. This bill is about meeting Canadians' needs.

Bill C-378 is about Canada not becoming America's drugstore. By amending the Food and Drugs Act, this legislation would protect Canadians.

The bill would amend the Food and Drugs Act to prohibit the export of drugs set out in schedules D and F to the Food and Drugs Act regulations, which are vaccines and prescription drugs, except as permitted under the regulations.

The bill would make it an offence under the Food and Drugs Act to export prescription drugs in prohibited circumstances. The exporter would be liable, on summary conviction, to a fine of up to $50,000 or imprisonment for a term not exceeding six months, and on conviction by indictment, to a fine of up to $250,000 or imprisonment for a term not exceeding three years.

Simply put, this bill would push the Canadian government to stand up for Canadians. It is something the Conservative government very seldom does.

We heard in the House today that it is not standing up for a Canadian citizen who is facing execution in the United States. The excuse is that a democratic decision was made in the United States. Canadians have always stood up for human rights. That is why we are respected around the world. How can the government go to China and talk about human rights any more when it is allowing a Canadian citizen to be executed in the United States?

That may be a little different story from this particular drug and vaccine issue, but it is all about standing up for Canadians, and the Conservative government is failing to do it. In terms of opposing this bill, it is clearly not standing up for Canadians.

This bill would push the government to stand up for Canadians, rather than just allow the export of drugs that would enhance American health and ignore the need for Canadians to be absolutely sure that the necessary drugs are available for Canadians. The government is opposing that.

I was shocked when I listened to the Parliamentary Secretary for Health. He went on at great length to say that the White House is opposed to the importation of drugs and therefore, we really do not need to deal with it.

I know the Conservatives love George Bush and love to hug him, but if they would just look a little beyond him to the candidates for the next presidency, they would see that most of the candidates support the importation of Canadian drugs into the United States because the drugs are cheaper.

We can understand why those presidential candidates are doing that. It is because the American health care system does not work. Over 40 million people do not have access to health care. It would be a great cover for the Americans to import cheap Canadian drugs, even if it shorted Canadians in terms of their supply, to kind of cover up the failures of their own health care system.

There is no question that the new government would stand by idly and risk the drug supply for Canadians. This bill is basically challenging the government, the companion of George Bush, to actually stand up for Canadians for a change and protect their supply of drugs and vaccines.

I have to ask this question. How often do we need to have Canadians subsidizing the United States?

The United States is our great friend. I spend a fair amount of time down there and the U.S. is our greatest trading partner. However, I think every Canadian is bothered when they learn that we are exporting oil and gas to the United States, a great Canadian resource, and what it is being used for in the United States. It is a cheaper supply. It is subsidizing its industrial plants so they can compete against Canadian industrial plants with cheap Canadian energy.

Why do we always need to be more supportive of the United States economy than our own? Now the government is going to put Canadians at risk by not being proactive and supporting Bill C-378.

Some will argue, as they always do because they like to use the trade agreements as a great crutch, that this will violate the trade rules. I say to the Government of Canada that if the trade rules do not make sense for Canadians then they need to be challenged. If this bill means there needs be a challenge to the trade rules, then let us challenge the trade rules. That would only make sense because then we would be standing up for Canadians.

The parliamentary secretary raised a number of points. He basically said that there was no imminent drug shortage and that the United States Congress has not adopted legislation to legalize the bulk importation of drugs. That is true for the moment but why can we not be proactive?

The fact of the matter is that the government should be proactive by banning bulk exports to the United States rather than waiting until after shortages of prescription drugs and medications occur.

As a coalition of Canadian pharmacists, distributors and patients said in a letter to the health minister on January 12:

We believe it is incumbent on the Government of Canada to respond proactively to this threat, with actions driven by a commitment to prevent harm and protect the public interest.

Why will the Government of Canada not listen to Canadians, to pharmacists, to distributors and to patients and be proactive? These people are concerned. Instead, the parliamentary secretary takes his advice from the White House. That is unacceptable.

He also talked about the Internet pharmacy sales having decreased significantly in the past two years. We really cannot be sure of that. It is difficult to determine the extent of Internet sales to the United States because many of them are being made offshore.

The bottom line is this. This bill is all about protecting the security of the drug and vaccine supply and medications for Canadians. The Canadian government should be proactive in terms of supporting this bill, even if it means it needs to stand up to the United States in terms of its agenda and its wishes. The government should stand up for Canadians, be proactive and support this bill to ensure that protection is there.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Mr. Speaker, I would like to thank the member for St. Paul's for her speech. I understand that the purpose of the bill she introduced today is to make it possible to prohibit the export or sale of prescription drugs and medications set out in a schedule to the Food and Drugs Regulations. There are currently no drugs listed in the schedule.

The bill has two specific goals. The first is to establish the principle that exporting any drug listed in the schedule should be prohibited if such activity could compromise the supply of that drug in Canada. The bill's second goal is to make it illegal to export prescription drugs. Bill C-378 is a kind of insurance policy against bulk exportation of prescription drugs in case of shortages in Canada.

To better understand the issue, we need to look at the pricing mechanisms for prescription drugs. In the United States, the power to set prices for prescription drugs is in the hands of pharmaceutical corporations. They can price their products as they see fit. Under pressure from American lobbyists, the Bush administration allows the pharmaceutical industry complete freedom to set its prices.

In Canada, except in Quebec, the Patented Medicine Prices Review Board, the PMPRB, which was established in 1987 in accordance with the Patent Act, sets maximum prices for medicines. The PMPRB is responsible for protecting the interests of Canadian consumers by ensuring that prices charged by manufacturers for patented medicines are not excessive.

Quebec has its own drug review process, the Conseil du médicament. The drug policy includes measures to ensure that Quebec is paying fair and reasonable prices for drugs.

It would be interesting to find out why the price difference is so big that Americans want to buy their medicines in Canada. Because prices in Canada are fixed by independent agencies, prices for identical products are often 30% to 60% lower here than in the United States.

It was pointed out earlier that the price of prescription drugs exported to and paid for by Americans fluctuates according to the value of the Canadian dollar. As the Canadian dollar rises, Canadian drugs become less profitable and attractive to Americans. Today the Canadian dollar was trading at $1.07 U.S., or 7% higher than its U.S. counterpart.

So how can we ensure the security of supply for Canada? Cross-border sales of pharmaceuticals to the United States have become an important source of trade for Canada. Since the Americans can take advantage of lower prices here than at home, they try to stock up in Canada. The potential is considerable, given that 37 million people aged 55 and older want to buy their pharmaceuticals here.

According to the Ordre des pharmaciens du Québec, the on-line pharmaceutical market has reached over $1 billion a year in Canada. Although all Canadian pharmacies must obey Canadian laws, the legislation is not airtight everywhere. While on one hand, the federal government has the authority to legislate exports, on the other hand, the provinces and territories are responsible for regulating medical and pharmaceutical practices through, in Quebec, the Collège des médecins and the Ordre des pharmaciens.

Thus, trade is particularly lucrative in Manitoba, where the laws surrounding the sale of pharmaceuticals are more flexible. According to estimates by a company called Secor, in 2003, nearly 20% of pharmacists in that province worked mainly to sell to Americans. That was the infamous peak year that was mentioned earlier. Also according to the same source, the majority of pharmacists in Canada who sell to the United States happen to be in Manitoba.

The Canadian Pharmacists Association warned of the following:

Canada needs to protect itself from having our drug supply drained, which will occur if the US passes this legislation. The cross border drug trade does not appear to be on the agenda of the current [Conservative] government. We believe that acting only after US bills are passed and Canadians are experiencing drug shortages is not an adequate response on the part of the Canadian government. The government will have to act sooner or later – and sooner is preferred. An important first step would be to pass Bill 378.

In Canada, neither international trade obligations nor domestic law prohibit such exports. However, Quebec and the provinces must follow rules with respect to these export transactions. Someone can speak about Ontario, but I will limit myself to the situation in Quebec.

As in so many other areas, Quebec is way ahead in terms of monitoring sales of prescription drugs and has taken steps to prevent the online sale of prescription drugs to Americans.

Under the Pharmacy Act, a pharmacist can sell drugs only to patients who have prescriptions written by a person authorized under Quebec legislation or the legislation of a Canadian province that authorizes that person to prescribe that drug if that person practises in Quebec.

The Quebec Code of ethics of physicians stipulates that in order to write a prescription for a patient, a doctor must evaluate the patient, establish a diagnosis, formulate a treatment plan, provide information to the patient and obtain consent. Some Quebec doctors have already been struck from the Collège des médecins du Québec for illegally selling drugs on the Internet to Americans they never met. I have with me a newspaper article that mentions the name of four such doctors who were fined between $5,000 and $25,000, in addition to being banned from practising for six months for signing prescriptions for U.S. patients without meeting them. I was quite surprised to see the name of a doctor from my riding on that list of four doctors. They operated on the Internet at myprescription.com, which means that Internet pharmacies are right next door.

Physicians practising in Quebec are not allowed to countersign a prescription from another physician without complying with the requirements that apply to the prescription. A Quebec physician who countersigns a prescription from an American physician therefore risks being sued, not only in Quebec, but also in the United States.

In terms of online business, Quebec already has the necessary tools to protect pharmacies' supply and ensure that patients receive the appropriate medication for their condition and information on how to use it properly.

In conclusion, the Bloc Québécois supports Bill C-378 in principle. The bill answers concerns about the possible reduction in inventories of drugs meant for Canadians. Although there is no shortage at present, we need to look at preventive measures before such a situation occurs. By setting strict criteria to regulate bulk drug exports, Bill C-378 would prevent an unfortunate situation from arising.

The bill should reassure the pharmaceutical industry and prevent it from raising drug prices, as American companies were tempted to do in retaliation.

The bill does not place a total ban on drug exports. It provides for a mechanism based on known criteria that can be produced in evidence.

[Carolyn Bennett, Liberal, St. Paul's, ON]

moved that Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to have the opportunity this afternoon to discuss with my colleagues from all parties Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions), although I wish that I did not have to do this bill again. It would have been very simple for the government to deal with this during the prorogation and actually make this bill unnecessary, but it still refused to act.

My bill is aimed at controlling the cross-border trade in prescription drugs and vaccines. The bill would amend the Food and Drugs Act to prohibit the export of drugs set out in schedules D and F to the Food and Drug Regulations, vaccines and prescription drugs, except as permitted under the regulations.

The bill would make it an offence under the Food and Drugs Act to export prescription drugs in prohibited circumstances. By amending the Food and Drugs Act, the legislation will protect Canadians.

My bill is constructed to protect the Canadian pharmaceutical supply from being bulk-exported south of the border. There is such a large price differential between American and Canadian pharmaceutical prices that there is great pressure on the U.S. at this time to import cheaper drugs from Canada.

With over 35 million members, AARP is the leading non-profit, non-partisan membership organization for people aged 50 and over in the United States. It wields an enormous amount of power and is at this time launching a very major communication initiative.

However, during my meeting with the organization in Washington in the spring, it was clear that its real intention was not to import pills from Canada but to import prices from Canada and to make Americans very angry that they were paying too much for brand name prescription drugs.

Let me put it plainly: Canada cannot become America's discount drug store. Canada needs to protect itself from the dramatic expansion of importation by the U.S. of drugs intended for our patients.

The prospect of the U.S. legalizing large-scale purchases from our domestic supply is real. In fact, every Democratic Party presidential candidate is in favour of importation legislation.

The threat to Canada's drug supply increased on January 10 of this year after some U.S. politicians stepped up their efforts to facilitate bulk imports of prescription drugs from Canada with the introduction of the pharmaceutical market access and drug safety act of 2007.

The legislation was introduced by Senators Dorgan and Snowe and Representatives Emanuel and Emerson, who are co-sponsoring the companion house legislation. The legislation, which has the backing of key U.S. Democrats and Republicans, would allow individuals to directly order medications from outside the U.S. It would allow U.S. licensed pharmacists and wholesalers to import FDA-approved medications from a number of countries, including Canada.

In May, senators both approved the measure and then voted to require U.S. health authorities to certify drug imports were safe. Since the U.S. federal drug administration already had made it clear that it would not provide certification, the bill was dead on arrival.

However, on Wednesday, the U.S. Senate adopted U.S. Senator David Vitter's drug reimportation amendment to the U.S. Senate labor, health and human services and education department appropriations bill. In addition to foot traffic, Vitter's amendments would also allow mail order and Internet importation for Canada.

Several steps remain in the U.S. Congress before such a bill is signed into law, but influential lawmakers are on the march on this issue. It is like a voodoo from a video game: it just will not be killed.

In addition, the House budget office has recently completed a budgetary impact analysis demonstrating the savings that would follow the adoption of importation legislation. The announcements will give additional incentives to pass legislation in the context of the budget negotiations.

Any of these measures pose an imminent and serious threat to the security and integrity of Canada's drug supply and a genuine threat to the health of Canadians. It may have been good short term politics, but it is terrible long term policy.

American seniors are rightfully outraged by the high prices of pharmaceuticals in their country, but outsourcing price controls is not a responsible approach. In Canada, we have addressed price control with the Patented Medicine Prices Review Board, which regulates drug prices to ensure that the prices of patent-protected brand name drugs are not excessive.

Canada has regulated drug prices for the past 15 years. The United States does not have a similar control mechanism and the problem is exacerbated by U.S. drug companies spending millions of dollars every year to defend their higher prices.

Every year U.S. drug companies spend hundreds of millions of dollars on political influence, including lobbying, campaign donations, and extensive ad campaigns to defend their high prices and fight against price control. The American drug industry employs over 600 lobbyists in Washington alone, more than one for every member of Congress. This system drives U.S. prices even higher.

Another important difference between the Canadian and American systems is the regulation of advertising.

Prescription drug advertising is one of the most controversial practices in the American pharmaceutical industry. During the first nine months of 2002, American pharmaceutical companies spent over $6 billion promoting their products to physicians and consumers. This kind of advertising drives prices up and is prohibited in nearly all other western countries.

In Canada, the therapeutic products directorate strictly regulates prescription drug advertising.

I would also like to discuss how drug importation legislation represents a threat to American patients by allowing relinquishment of necessary community-based medication monitoring and management at increasing risk for potential counterfeit drugs.

The incidence of counterfeit drugs is small, but is growing in developed nations. The recent tragic death of a British Columbia resident, determined by a coroner to have been caused by counterfeit medicine in her possession, serves as a reminder that North America is not immune from this global phenomenon.

The counterfeiting of medicines is an issue that threatens the quality and integrity of Canada's drug supply, a problem that will be greatly exacerbated if U.S. drug importation legislation is passed into law without a clear and effective Canadian prohibition on bulk drug exportation.

I was pleased to see the public safety committee's report, entitled “Counterfeit Goods in Canada--A Threat to Public Safety”, which included this recommendation:

--that the Government of Canada institute a campaign to raise awareness of counterfeit and pirated goods to make the public aware of the economic and social costs associated with this scourge, and emphasize the public health and safety hazards they represent. The campaign should also raise Canadians' awareness of the involvement of organized crime in the counterfeiting and piracy of goods.

Internationally, the WHO is very concerned about counterfeit drugs. The WHO has struck the international medical products anti-counterfeiting task force, tasked with increasing international collaboration to combat counterfeiting.

I would also like to point out that allowing bulk prescription drug imports would not significantly reduce U.S. prescription prices for very long.

Even a recent University of Texas study concluded, based on the worst case scenario, that Canada's stocks of prescription drugs would amount to about a 38-day supply for the United States, assuming all U.S. medications were Canadian sourced. Once U.S. demand depletes Canadian stocks, prices will almost certainly rise, narrowing or even possibly eliminating the difference between U.S. and Canadian pharmaceutical prices.

Some may argue that Canadians should just increase manufacturing of pharmaceuticals to meet the U.S. demand.

Canada's innovation-focused pharmaceutical industry develops, manufactures and distributes drugs designed to meet the needs of Canadian patients and the Canadian market. It bases its production on the size of the population and the incidence of the illness or condition to be treated.

Manufacturers produce sufficient prescription drugs to meet the expected national demand. Consequently, if one country imports its prescription drugs from another, it diminishes the exporting country's stock of drugs to meet the needs of patients in that country.

Labelling regulations also differ from country to country. As a result, prescription drugs produced for the American or South American markets cannot just be sent to Canada to meet an unexpected need.

Given the complexity of calculating annual estimates of the needs of Canadian patients, not to mention the management by drug companies of their inventory to respond to patients' needs, it is unrealistic to think that products manufactured for Canada could meet American demand.

Cross-border trade is not only detrimental from a public policy perspective, it is almost virtually impossible to do. I would like to underline again that Canada cannot meet the prescription drug needs of approximately 280 million Americans without putting our own supply at risk.

Take, for example, the events during the fall of 2005, when in November Roche Canada took the unprecedented step of suspending sales of Tamiflu to the Canadian market. There were reports that Internet pharmacies were busily filling foreign prescriptions at a significant profit. One B.C. pharmacy alone was reported filling 400 orders a day from the U.S. That is a significant number, when according to the Canadian Pharmacists Association only 4,000 Canadians received that drug that September. Another Internet pharmacy in Montreal issued news releases promoting to U.S. customers its Tamiflu stocks.

The Canadian Pharmacists Association reacted to the Tamiflu incident by saying that the government should have acted to protect the country's supply of the drug. Again, when supply gets siphoned off to the U.S., it is Canadians who come up short.

This situation is a perfect example of the types of scenarios Canadian patients will face if Canadian governments continue to allow drugs to be diverted to the U.S.

This is not an issue unique to North America. In April of this year the European Union passed resolution 31 stating:

Is concerned about the intention of the US Congress to authorise parallel imports of medicines from the EU Member States, that may create obstacles to the EU patients' supply and favour counterfeiting of medicines; asks the EU, therefore, to raise this issue at the forthcoming Summit;

I would also like to take the opportunity to commend my colleague, the member for Vancouver South, who in 2005, when he was health minister, anticipated this problem and put forward legislation, Bill C-28, in order to reach consensus in the House. Unfortunately, an election was called before the bill went forward.

Current Canadian policy is to use only reactive measures and seek to manage shortages once they have already occurred. This is not enough and it may well be too late.

The issue of bulk exports to other countries of medicines and vaccines destined to Canadians should be an issue of concern to all of us. It is of particular interest to the Canadian Pharmacists Association and the Ontario Pharmacists Association.

I believe the passage of Bill C-378 is essential to protect the supply and integrity of prescription drugs here in Canada and will send a strong message to our American colleagues of the futility of their shortsighted legislative initiative.

I urge all colleagues to support my private member's bill, Bill C-378, or to call upon the government to make it unnecessary.

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, today we are examining Bill C-378, which seeks to control the cross-border trade of prescription drugs and vaccines.

Bill C-378 could be an answer to concerns about reductions in inventories of drugs designated for Canadians. It also seeks to restrict bulk exports of drugs. Although there is no shortage at present, this bill would establish preventive measures to avoid such a situation. Regulating drug exports would prevent an unfortunate situation from arising.

Bill C-378 seeks to restrict drug exports within the framework of NAFTA. According to this agreement, it is possible to limit exports to prevent a shortage. In the event of a shortage, the federal government could prohibit bulk exports of drugs in order to retain a sufficient inventory in Canada to safeguard public safety. Hence, the bill would give effect to these provisions.

Earlier I was saying that this bill could allay concerns about the possibility of reductions in drug inventories. However, the Bloc Québécois does have to raise one question. Although there seems to be a consensus on this issue, there are nevertheless some points to consider that are of particular interest to me. First, is there a risk of meddling in Quebec's jurisdiction if more powers are given to the federal minister? Second, does the Minister of Health not already have the authority to act in the event of an emergency? Third, it is not really clear that the United States would allow bulk importing given the power of the pharmaceutical lobby and President Bush's opposition to such a measure. Fourth, along the same lines, could the government act quickly if the United States decided to allow bulk importing? One might think that, under NAFTA and the WTO, there are already measures to protect against bulk purchasing of drugs, for example.

All these questions are apparently on the table and the introduction of this bill is certainly interesting. Nonetheless, as far as passing this bill is concerned, we are not there yet. In my opinion, we need more time since this evening's debate is the first one this House has held on this situation. We know that some sectors, including the Canadian Pharmacists Association, are worried about prescription drug inventories, which could be seriously jeopardized if such a situation prevailed. Apparently, if every American decided to buy drugs in Canada, after 38 days of making their purchases here, there would be no drug supplies left for Quebeckers and Canadians.

This is certainly a compelling matter and it requires us to look at this problem, which is currently not as much of an issue as it once was. We should perhaps qualify the dangerous situation we could find ourselves in. Why did the Americans want to buy their drugs here in Canada? Because the exchange rate was really good for the Americans. Since the value of the Canadian dollar has gone up, the Americans' appetite to buy in Canada is probably not as real today. That is my first observation.

The second observation is that there was a time when a lot of prescription drugs were being bought here in Canada. What is happening now is that the U.S. government implemented the medical insurance system called Medicare. This has slowed the Americans zeal to buy in Canada. Many people who were in a more vulnerable situation for purchasing drugs no longer do so here. The situation may not be as problematic as it was a year ago.

The volume of purchases has also declined. People came here to buy prescription drugs and they bought them through Internet pharmacies, which were a serious problem for some pharmacies that lost their pharmacists. Working for Internet pharmacies appealed to a lot of pharmacists. Small pharmacies began to lose their professional resources to lucrative positions with Internet pharmacies.

The situation in Quebec is perhaps a little different. I am not saying that nobody in the pharmaceutical industry is concerned, but in Quebec, we have set up some protection, and we know that Ontario has done the same. Western provinces are the ones trying to come to terms with Internet pharmacies. The provinces could just adopt legislation, but it is not up to me to tell other provinces what to do. I would rather talk about what Quebec has done to protect itself from various possible situations.

As in many other areas, Quebec is way ahead in terms of the sale and monitoring of prescription drugs. It has measures to prevent the online sale of prescriptions drugs to American clients. Under Quebec's Pharmacy Act, a pharmacist can sell prescription drugs only to patients whose prescriptions were written by a person authorized under Quebec law or the laws of another Canadian province to prescribe the drug if that person practices in Quebec. That makes it harder to do.

Furthermore, the Code of Ethics of Physicians states that in order to give a prescription to a patient, a physician in Quebec must have assessed the patient. If an American wants to buy prescription drugs online or in person, he must see a Quebec physician. A Quebec physician must assess the patient, make a diagnosis, develop a treatment plan, provide information and obtain consent.

I am rather concerned about that. It is all well and fine to buy drugs on the Internet or through other means, but one must also consider the quality of the product. Responsibility for a product can hardly be ensured when there is no medical prescription and the patient was never seen by a doctor. Many Americans should think about that too, because we cannot tell who is responsible for product quality and for providing the right treatment to the right patient.

In Quebec, efforts have been made to oversee a process with potentially serious consequences, since it is often difficult to undo things where people's health is concerned.

Already, the Collège des médecins du Québec has struck physicians off the roll for having illegally sold drugs on the Internet to Americans they had never even met. That is not a common occurrence, but it has happened. Nor are practising physicians in Quebec allowed to countersign a prescription from another physician without complying with the same requirements as for the prescription. A Quebec physician who countersigns a prescription from an American physician risks being sued, not only in Quebec, but also in the United States. Clearly, Quebec has tried to provide the best framework possible for all these transactions which could have a harmful effect on the health of individuals.

In terms of online business, Quebec already has the necessary tools to protect pharmacies' supply and ensure that patients receive the appropriate medication for their condition and information on how to use it. Some control is needed, and this bill might motivate the provinces to take action to increase protection and improve control. Physicians who did not comply with this procedure would risk prosecution. Harsh penalties have been applied, and some operations have even been shut down. Some practitioners were required to restrict their professional activities for 18 months and even pay fines for illegally running a business that was not approved.

This bill requires that we take a serious look at the situation. Hon. members will see from our questions how the Bloc Québécois receives Bill C-378 for the benefit of the public.

[Steven Fletcher, Conservative, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, I am pleased to speak to this private member's bill. This is a very serious issue and the government takes the issue of security of supply of prescription drugs and the protection of the health of Canadians very seriously.

When, in late October, the member for St. Paul's introduced the bill, she mentioned concerns about the effect of the then recent and potentially future U.S. initiatives aimed at facilitating cross-border drug sales to the United States. These two initiatives were restricted to individual purchases rather than wholesale or bulk shipments.

As I will outline further, we have not seen any impact from these initiatives. In fact, total sales to the United States have declined.

The member referred specifically to a U.S. measure to allow Americans visiting Canada to return with up to a 90 day supply of prescription drugs for their own use. In other words, this provision affected personal physical imports only, so-called foot traffic.

Although the measure became law on October 4, 2006, it essentially endorsed the then current U.S. administration practice regarding personal imports.

Members should know that the value of foot traffic purchases of prescription drugs in Canada has remained constant in recent years.

There was another U.S. development last fall, also in October, but not specifically referred to by the member at that time.

The U.S. Customs and Border Protection Agency ended its approximately one year practice of selectively seizing individual prescription drug purchases sent by mail from Internet pharmacies in Canada. While such personal mail order imports continue to contravene U.S. law, they have been tolerated, enabling the Internet pharmacy business in the first place.

As with the measures for foot traffic, we have not noticed any increase in sales associated with this U.S. Customs decision. In fact, the latest information from Health Canada shows that Internet pharmacy sales to the U.S. dropped by an additional 20% in the last quarter of 2006, resulting in total 2006 annual sales of $211 million.

The overall sales have dropped by 75% from their peak of $850 million in 2004. Why the decline? Several factors are at play. These include: the introduction of the U.S. medicare act part D, which, for the first time, provides drug benefit coverage for millions of previously uninsured or underinsured seniors; actions by manufacturers to restrict the supply of drugs sold to Canadian pharmacies involved in cross-border drug sales; the higher Canadian dollar; and, U.S. residents pursuing imports from other countries have also contributed.

When Bill C-378 was introduced last October, the government's assessment of the situation was that the U.S. initiatives with respect to foot traffic and mail order seizures did not pose a threat to the Canadian drug supply. This assessment has been proven valid. In the case of foot traffic, that is because sales predate Internet commerce and have existed for about 20 years. They have never posed a concern with respect to Canada's drug supply and the volume of such sales has been stable in recent years at an estimated $500 million.

The halting by U.S. customs of selective seizures of drug imports did not really change anything either as such personal imports have already been tolerated for a number of years anyway.

The most recent statistics bear this out. Foot traffic remains stable and Internet pharmacy sales dropped by 50% in 2006 and likely have dropped significantly more due to the sharp appreciation of the Canadian dollar since the more recent statistics.

Over the past several years, officials with Health Canada and the Department of Foreign Affairs and International Trade have continuously monitored the value of cross-border drug sales to the United States and related developments in that country, including the U.S. measures in October. Let me assure the House that they will continue to do so.

In the meantime, the Americans face ongoing challenges posed by the world's highest priced prescription drugs, explaining their continued preoccupation with finding way to make drugs more affordable. That is why the idea of importing lower priced drugs from Canada and other countries continues to be a political issue in the United States.

Federal legislators and state and municipal governments continue to see imports as part of the solution. Individual Americans, especially those without drug coverage, are also looking to other countries for relief from high drug prices.

At the federal level, in previous sittings of the U.S. Congress, a number of bills have been proposed to legalize drug imports, including bulk imports, from Canada. These legislative proposals were not able to gain a lot of support or traction, primarily due to the Republican majority in Congress and opposition by the U.S. administration. This was the case despite the fact that some bills were sponsored by Republicans.

However, I should point out that while some individual Republicans have supported and even sponsored drug import legislation, the official Republican Party position remains steadfast in opposing drug imports and in accepting high U.S. prices.

As the members in this place know, the U.S. legislative environment has been affected somewhat by the Democratic win in both houses of Congress last November. In this context, it is important to note that legalizing drug importations from Canada and other countries has reportedly been among the legislative priorities for some leading Democrats.

As I just noted, some Republicans have supported drug importation. In January of this year, a bipartisan group of U.S. Congress and Senate lawmakers introduced a bill that would allow importation from other countries. The pharmaceutical market access and drug safety act of 2007 would legalize both bulk or wholesale, as well as individual retail imports, including transactions via Internet pharmacies.

A democratically controlled Congress does suggest a greater potential for U.S. legalization of bulk imports. However, the overall view of Congress is that the prospects of enactment of legislation giving a clear green light to drug imports is dim at best.

To illustrate the point, let us look at developments in the last few months. In the U.S., opposition to the legalization of drug imports remains strong in many quarters. The enactment of legislation to legalize drug imports, without provisions for major impediments to such imports, is unlikely. This is especially the case given the Bush administration's opposition to drug importation.

There is potential for legislative horse-trading after such a controversial bill is introduced in the U.S. Congress. The U.S. Senators “endorsed” drug importation in early May, but included a provision--and this is very important--to disallow such imports unless the Secretary of Health and Human Services first certifies that they “pose no additional risk to the public's health and safety”, and that they will significantly reduce costs to consumers.

Proponents of importation have labelled this amendment as a poison pill, and with good reason. All observers agree, including the bill's lead sponsor, Senator Dorgan, that it has effectively neutralized the bill's drug importation provisions. This is because the actualization of those provisions would now require U.S. administration support but the president, by virtue of his past opposition to drug importation, is not expected to offer that support.

Even if the provisions were to be put into force, the administrative burden included in the bill, which is 140 pages long, is so onerous that its implementation would be significantly slowed. Its extensive administration and oversight regime includes requirements for inspections of exporting facilities and multiple procedural requirements of both exporters and importers. This suggests that there would be very slow uptake in the provisions.

I could go on but the bottom line--

[Dave Batters, Conservative, Palliser, SK]

Mr. Speaker, I listened to the member for St. Paul's with great interest.

First of all I would like to take this opportunity to commend her on this effort. I know she has put a lot of work into this private member's bill.

I was shocked to hear in her remarks just how quickly the Canadian drug supply could be depleted if we were to continue to allow bulk exports of pharmaceuticals to the United States. In particular, if the situation were to change in the United States and the Americans were to allow for bulk importation, our drug supply that we need for Canadian seniors and youth, people from coast to coast to coast, could be depleted in as little as 38 days by our huge neighbour, the elephant living to the south of us, the United States.

Bill C-378 is trying to be proactive and take measures to stop our supply from being depleted before it ever happens, to protect the Canadian drug supply.

If the government is not proactive and reacts, if legislation changes in the United States and allows for bulk importation, what tools does the government have at its disposal to react? How quickly could the government act and make those changes? We realize we would not have much time. We would have 38 days until our entire supply was depleted. What tools does the government have and how quickly could the government respond in a crisis situation like that?

[Carolyn Bennett, Liberal, St. Paul's, ON]

moved that Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to have the opportunity tonight to discuss with my colleagues from all parties Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions).

My bill is aimed at controlling the cross-border trade in prescription drugs and vaccines. The bill would amend the Food and Drugs Act to prohibit the export of drugs set out in schedules D and F to the Food and Drug Regulations, Vaccines and Prescription Drugs, except as permitted under the regulations.

The bill would make it an offence under the Food and Drugs Act to export prescription drugs in prohibited circumstances. By amending the Food and Drugs Act, the legislation will protect Canadians.

My bill is constructed to protect the Canadian pharmaceutical supply from being bulk exported south of the border. There is such a large price differential between American and Canadian pharmaceutical prices that there is great pressure on the U.S. at this time to import cheaper drugs from Canada.

With over 35 million members, AARP is the leading non-profit, non-partisan membership organization for people age 50 and over in the United States. It wields an enormous amount of power and is at this time launching a very major communication initiative.

However, during my meeting with the organization in Washington during the break week, it was clear that its real intention was not to import pills from Canada, but to import prices from Canada and to make Americans very angry that they were paying too much for brand name prescription drugs.

Let me put it plainly. Canada cannot become America's discount drug store. Canada needs to protect itself from dramatic expansion of importation by the U.S. of drugs intended for our patients. The prospect of the U.S. legalizing large scale purchases from our domestic supply is real.

The threat to Canada's drug supply increased on January 10, after some U.S. politicians stepped up their efforts to facilitate bulk imports of prescription drugs from Canada with the introduction of the pharmaceutical market access and drug safety act of 2007. The legislation was introduced by Senators Dorgan and Snowe and Representatives Emanuel and Emerson, who are co-sponsoring the companion house legislation.

The legislation, which has the backing of key U.S. Democrats and Republicans, would allow individuals to directly order medications from outside the U.S. It would also allow U.S. licensed pharmacists and wholesalers to import FDA approved medications from a number of countries, including Canada.

In May senators both approved the measure and then voted to require U.S. health authorities to certify drug imports were safe. Since the U.S. federal drug administration has already made it clear that it will not provide certification, the bill was dead on arrival. The House of Representatives is set to debate a similar measure soon, but few expect things to change.

However, Representative Emerson has stated that she is committed to finding a way to make this legislation happen. Because it is unlikely the legislation will get through the house and energy committee, we believe she is looking to attach drug importation to another bill. Furthermore, dozens of U.S. jurisdictions at state and local levels continue to introduce measures designed to help local citizens, government employees, retirees and others buy Canadian drugs.

Any of these measures pose an imminent and serious threat to the security and integrity of Canada's drug supply, and a genuine threat to the health of Canadians. It may have been good short-term politics, but it is terrible long term policy.

American seniors are rightfully outraged by the high prices of pharmaceuticals in their country, but outsourcing price controls is not a responsible approach.

In Canada we have addressed price control with the Patented Medicine Prices Review Board, which regulates drug prices to ensure that the prices of patent protected brand name drugs are not excessive. Canada has regulated drug prices for the past 15 years.

The United States does not have a similar control mechanism, and the problem is exacerbated by U.S. drug companies spending millions of dollars every year to defend their higher prices. Every year, U.S. drug companies spend hundreds of millions of dollars on political influence, including lobbying, campaign donations and extensive ad campaigns to defend their high prices and fight against price control. The American drug industry employs over 600 lobbyists in Washington alone, more than one for every member of congress. This system drives U.S. prices even higher.

Another important difference between the Canadian and American system is the regulation of advertising.

Prescription drug advertising is one of the most controversial practices in the American pharmaceutical industry. During the first nine months of 2002, American pharmaceutical companies spent over $16 billion promoting their products to physicians and consumers. This kind of advertising drives prices up and is prohibited in nearly all other western countries.

In Canada, the Therapeutic Products Directorate strictly regulates prescription drug advertising.

I would also like to discuss how drug importation legislation represents a threat to American patients by allowing relinquishment of necessary community based medication monitoring and management at increasing risk from potential counterfeit drugs.

The incidence of counterfeit medicines is small but is growing in developed nations. The recent tragic death of a British Columbia resident, determined by a coroner to have been caused by counterfeit medicines in her possession, serves as a reminder that North America is not immune from the global phenomenon.

The counterfeiting of medicines is an issue that threatens the quality and integrity of Canada's drug supply, a problem that will be greatly exacerbated if U.S. drug importation legislation is passed into law without a clear and effective Canadian prohibition on bulk drug exportation.

I was pleased to see the public safety committee's report entitled “Counterfeit Goods in Canada — A Threat to Public Safety” which included this recommendation:

--the Government of Canada institute a campaign to raise awareness of counterfeit and pirated goods to make the public aware of the economic and social costs associated with this scourge, and emphasize the public health and safety hazards they represent. The campaign should also raise Canadians' awareness of the involvement of organized crime in the counterfeiting and piracy of goods.

Internationally the WHO is very concerned about counterfeit drugs. The WHO has struck the International Medical Products Anti-Counterfeiting Taskforce, tasked with increasing international collaboration to combat counterfeiting.

I would also like to point out that allowing bulk prescription drug imports would not significantly reduce U.S. prescription prices for very long. Even a recent University of Texas study concluded that based on the worst case scenario, Canada's stocks of prescription drugs would amount to about a 38 day supply for the United States, assuming all U.S. medications were Canadian sourced. Once U.S. demand depletes Canadian stocks, prices will almost certainly rise, narrowing or even possibly eliminating the difference between U.S. and Canadian pharmaceutical prices.

Some may argue that Canada should just increase manufacturing of pharmaceuticals to meet U.S. demand.

However, Canada's innovation-focused pharmaceutical industry develops, manufactures and distributes drugs designed to meet the needs of Canadian patients and the Canadian market. It bases its production on the size of the population and the incidence of the illness or condition to be treated.

Manufacturers produce sufficient prescription drugs to meet the expected national demand. Consequently, if one country imports its prescription drugs from another, it diminishes the exporting country's stock of drugs to meet the expected needs of patients in that country.

Labelling regulations also differ from country to country. As a result, prescription drugs produced for the American or South American markets cannot just be sent to Canada to meet an unexpected need.

Given the complexity of calculating annual estimates of the needs of Canadian patients, together with the detailed methods used by drug companies to manage their inventory and respond to patients' needs, it is unrealistic to think that products manufactured for Canada could meet American demand.

Cross-border trade is not only detrimental from a public policy perspective, it is also virtually impossible to do.

I would like to underline again that Canada cannot meet the prescription drug needs of approximately 280 million Americans without putting our own supply at risk.

Take for example the events of the fall of 2005. In November 2005 when Roche Canada took the unprecedented step of suspending sales of Tamiflu to the Canadian market, there were reports that Internet pharmacies were busily filling foreign prescriptions at a significant profit. One B.C. pharmacy alone was reportedly filling 400 orders a day from the U.S. That is a significant number when according to the Canadian Pharmacists Association only 4,000 Canadians received the drug that September. Another Internet pharmacy in Montreal issued news releases promoting to U.S. customers its Tamiflu stocks.

The Canadian Pharmacists Association reacted to the Tamiflu incident by saying that the government should have acted to protect the country's supply of the drug. Again, when supply gets siphoned off to the U.S., it is Canadians who come up short.

This situation is a perfect example of the types of scenarios Canadian patients will face if Canadian governments continue to allow drugs to be diverted to the U.S.

This is not an issue unique to North America. In April of this year the European Union passed resolution 31 stating:

Is concerned about the intention of the US Congress to authorise parallel imports of medicines from the EU Member States, that may create obstacles to the EU patients' supply and favour counterfeiting of medicines; asks the EU, therefore, to raise this issue at the forthcoming Summit--

I would also like to take the opportunity to commend my colleague, the member for Vancouver South who in 2005 when he was health minister anticipated this problem and put forward legislation, Bill C-28 to consensus in the House. Unfortunately, an election was called before the bill went forward.

Current Canadian policy is to use only reactive measures and seek to manage shortages once they have already occurred. This is not enough and it may well be too late.

The issue of bulk exports to other countries of medicines and vaccines destined to Canadians should be an issue of concern to all of us. It is of particular interest to the Canadian Pharmacists Association and the Ontario Pharmacists Association.

I believe the passage of Bill C-378 is essential to protect the supply and integrity of prescription drugs here in Canada and will send a strong message to our American colleagues of the futility of their short-sighted legislative initiative.

I urge all colleagues to support my private member's bill, Bill C-378.

[Carolyn Bennett, Liberal, St. Paul's, ON]

moved for leave to introduce Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions).

Mr. Speaker, I am pleased today to introduce the bill, an act to amend the Food and Drugs Act and the Food and Drug Regulations. In view of the recent law enacted by the U.S. Congress after October 4, President Bush has opened the border to prescription drugs which has caused the U.S. customs service to stop seizing these purchases entering America from Canada.

We believe this is a first step to the full legalization of prescription drug imports from Canada that could come by the end of this year. We need to protect ourselves from this dramatic expansion of importation. We need to ensure that we avoid becoming America's drug store and yet we believe that since coming to office the new Conservative government has taken no action and, in fact, the health minister has said that he is not worried and that he will only respond when drug shortages occur.

(Motions deemed adopted, bill read the first time and printed)